TSMC Faces Order Cutback from Four Major Clients 遭四大客戶砍單 台積電月產恐銳減1.5萬片

The latest research report from J.P. Morgan points out that TSMC has seen its major clients adjust downward their chip orders and therefore had to shut down four "EUL" machines, decreasing monthly production by 15,000 chips. Today, TSMC share price opened low and stayed low, with intraday share price down to NT$475, dropping NT$14.

Liao En-ping, Professional Associate, Securities Investment Department, President Futures Co.: “For the past 10 years at or around Mid-Autumn Festival, there has been a 70 percent chance of TAIEX dropping.”

The Taiwan Stock may flip and take a downward trend around Mid-Autumn Festival. Securities analysts note that it's mainly due to the major investors adjusting their "short-term chips" before the long weekend. Nevertheless, observing long-term trends, consumer electronics demands are dropping, and mature-processed electronics stocks are facing a "de-inventory" storm; thus the hot season in the latter half of this year may not be hot anymore. Meanwhile, this "de-inventory" fire has burned to "advance-process" TSMC. TSMC's share price opened low and stayed low on Sept. 7, with the lowest intraday price down to NT$475, dropping NT$14.

Liao En-ping, Professional Associate, Securities Investment Dept., President Futures Co.: “We knew in the last few weeks that TSMC's capacity utilization for 6-nano and 7-nano chips has dropped to nearly 90 percent. And this time with 5-nano, it will likely drop to 92-93 percent.”

J.P. Morgan announced in its latest report that TSMC, confronted with slashed orders from four advanced process clients, including Mediatek, AMD, Qualcomm, and Nvidia, had to unprecedentedly shut down four Extreme Ultraviolet Lithography machines, with monthly production decreasing by 15,000 chips and earnings next year down by 10 percent.

Liu Pei-cheng, Director, Taiwan Industry Economics Services: “Consumer electronics, even smartphones are slowly being affected, including servers and cloud computation. The U.S. government may restrict relevant AI accelerator chips, thus exporting to China may affect clients' subsequent orders. ”

With TSMC leading the drop, Taiwan Stock opened low and stayed low in the morning. It reached 14,410 intraday, dropping 267 points, wavering between long and short shocks. Overshadowed by electronics stocks' "de-inventory" effect, foreign investments continued to oversell. However, the new iPhone will enter the market on Sept. 8 at 1:00 a.m. Taiwan time. Whether this will inject some rebound strength into Taiwan's electronics supply chain depends on whether the new phone's highlight features will be favored by the global consumer market.