When GlobalFoundries canceled its 7nm ramp this year, it did so because it claimed it hadn’t found enough customers to justify the investment. The overall impact on AMD, GF’s major customer, was apparently negligible — plans were already in the works to bring Epyc and Ryzen up on 7nm. But GlobalFoundries major justification for canceling 7nm was that there simply weren’t enough customers to go around. At the time, we asked whether we might see companies like AMD being squeezed into smaller ramps than they might like due to these issues. Now, it looks like TSMC may have the opposite problem.
A report from DigiTimes claims that TSMC will only be operating at 80-90 percent of its 7nm capacity in 2019. Supposedly Apple, HiSilicon, and Qualcomm have all cut their orders for the first half of the year. It’s not entirely clear why this would be the case. The total smartphone market grew 1.4 percent in Q3 2018 — not much, to be sure, but hardly a catastrophic downturn. That small growth, Samsung’s market share fell sharply, from 22.3 percent to 18.9 percent, while Huawei grew from 9.5 percent to 13.4 percent. HiSilicon is a Huawei subsidiary and uses TSMC for its manufacturing. Qualcomm is rumored to be using TSMC for 7nm, though it’s not clear if they’re single-sourcing with the Taiwanese foundry or using both Samsung and TSMC.
Given that we don’t know if any of TSMC’s other foundry customers are squeezed for volume, we don’t really know if this report will impact their product timelines. In theory, having limited production volume could delay a launch by forcing a manufacturer to wait longer to build a supply of inventory, so larger allocation could be helpful. The best-case scenario is that the PC-centric companies that are or might be planning 7nm launches could bring those launches forward to take advantage of the capacity increase. That’s a complex thing to plan, however, and so we wouldn’t jump to that conclusion.
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