TSMC Likely to Cut 7nm Prices by 5-10% Starting Next Year

Taiwan's TSMC, the world's largest foundry (semiconductor contract manufacturer), is reportedly planning to reduce the price of its 7-nanometer (nm; 1 nm is one billionth of a meter) products by 5-10% starting next year.

On the 1st, Taiwanese media including Liberty Times, citing anonymous sources, reported that TSMC is considering a price reduction for the manufacturing process with the lowest utilization rate among its mature processes. Currently, TSMC's 7-nanometer process utilization rate is said to be only about 60%.

However, the source explained that this price reduction for mature processes is not a direct foundry price cut but a discount limited to photomasks used in the semiconductor lithography process.

The proportion of 7-nanometer products in TSMC's third-quarter sales this year was 17%, showing a significant decline compared to 23% in the second quarter and 26% in the same period last year.

Earlier, TSMC CEO Wei Zhejia also stated at the third-quarter earnings briefing that the decline in the utilization rate of 7-nanometer production facilities exceeded expectations. It is analyzed that the sharp drop in shipments in the mobile phone market and delays in product launches by major customers affected the facility utilization rate.

He explained, "The current situation of the 7-nanometer process is similar to the 22-nanometer and 28-nanometer processes in 2018-2019," and said that TSMC is striving to increase the utilization rate of the 7-nanometer fab through special manufacturing processes in preparation for a recovery in demand for home appliances and other products.

Meanwhile, Taiwan Economic Daily reported that some semiconductor fabless companies have started negotiations with TSMC for next year's price reductions, and that TSMC has proposed a 2% price cut for some mature processes.

This content was produced with the assistance of AI translation services.