TSMC is expected to see 5nm and 4nm chip sales generate an additional NT$100 billion in 2023, despite a roughly flat revenue growth this year, according to industry sources.
TSMC saw 5/4nm chip sales generate a total of NT$587.6 billion in 2022. Revenue from the process nodes may be close to NT$700 billion this year, the sources said.
The 5nm process family from TSMC, comprised of 4nm processes, has passed its learning curve and is already a golden hen for the pure-play foundry, the sources indicated. The foundry's 5nm process platform wafer pricing is US$5,000 higher than those for its 7nm process family, and the revenue proportion for 5/4nm is already larger than that for 7/6nm.
TSMC's wafer prices for 5/4nm are estimated at around US$15,000, the sources noted. The process family has recently seen a significant increase in orders, such as Nvidia's A100 and H100 AI GPUs, as well as their China-bound downgraded versions, the sources said.
TSMC will see 3nm chip sales start generating revenue substantially in the second half of 2023, when the foundry moves N3E - an enhanced version of N3 - to volume production. Sales generated from 3nm process technology are expected to account for about 5% of TSMC's total wafer revenue at the end of 2023, with the proportion increasing further into 2024, the sources indicated.
Still, TSMC's 5nm process family will continue to bear a significant load in order for the foundry to maintain its yearly gross profit margin of 53%, the sources said.
In addition, a recovery in TSMC's 16/12nm and 28/22nm process utilization rates will be another positive contributor to the company's ability to regain revenue in the second half of this year, according to the sources. Each of the process platforms accounts for about 10% of the foundry's total wafer revenue.
TSMC is expected to see Fab 14B capacity utilization rebound to over 80% starting the third quarter, said the sources. Fab 14B offers mainly 16/12nm process nodes, and has experienced significant adjustments in customer orders.
At TSMC's Fab 15A, where 28nm chips are mainly produced, capacity utilization will return to 100% in the second half of this year from 85-90% in the second quarter, the sources indicated.
Utilization rates for TSMC's 7/6nm process manufacturing at Fab 15B have fallen below 40%, the sources said. The process nodes will see a gradual recovery in capacity utilization in the second half of this year.
