Array
(
    [content] => 
    [params] => Array
        (
            [0] => /forum/index.php?threads/tsmc-cowos-order-cut-rumors-resurface.21873/
        )

    [addOns] => Array
        (
            [DL6/MLTP] => 13
            [Hampel/TimeZoneDebug] => 1000070
            [SV/ChangePostDate] => 2010200
            [SemiWiki/Newsletter] => 1000010
            [SemiWiki/WPMenu] => 1000010
            [SemiWiki/XPressExtend] => 1000010
            [ThemeHouse/XLink] => 1000970
            [ThemeHouse/XPress] => 1010570
            [XF] => 2021770
            [XFI] => 1050270
        )

    [wordpress] => /var/www/html
)

TSMC CoWoS Order Cut Rumors Resurface

XYang2023

Well-known member
Original article in Tradition Chinese:

Machine translation:

Recently, rumors circulated that NVIDIA had reduced its orders for TSMC's CoWoS (Chip-on-Wafer-on-Substrate) technology. However, related supply chain sources previously denied the claims, stating they had "heard nothing about it." Now, Nomura Securities has issued a fresh report naming NVIDIA as a key player in the slowdown of demand for several products. According to the report, NVIDIA is set to slash CoWoS-S orders at TSMC (2330) and UMC (2303) by as much as 80%, which is expected to reduce TSMC's revenue by 1% to 2%.

Nomura's semiconductor industry analyst, Ming-Tsung Cheng, pointed out that the discontinuation of NVIDIA's Hopper platform chips, limited demand for the new GB200A chips, and sluggish demand for GB300A are the primary reasons for the significant reduction in CoWoS-S orders for 2025. The projected annual decrease of 50,000 CoWoS-S units is anticipated to cut TSMC's revenue by 1% to 2%.

However, Cheng emphasized that despite the substantial reduction in CoWoS-S orders, AI demand is expected to drive TSMC's revenue growth this year. AI-related revenue contributions are projected to exceed 20% of the company's total revenue. As a result, Cheng maintained a "Buy" rating for TSMC, with a target price of NT$1,400.

Regarding revenue forecasts for the current quarter, Cheng predicts a 6% quarter-on-quarter decline but a 24% year-on-year increase. The quarterly decline is primarily attributed to seasonal factors. However, the impact of seasonality is mitigated by increased production capacity for AI GPUs and ASICs, as well as the launch of Apple's latest budget iPhone SE 4.

The annual growth forecast of 24% is slightly lower than Bloomberg's 27% projection. This difference is attributed to TSMC's stronger-than-expected revenue performance in Q4 of last year, coupled with potential negative impacts from new U.S. AI export regulations. These regulations may restrict GPU procurement in certain countries and could lead to a decline in CoWoS-S orders.

Outside of AI-related products, while the pace of economic recovery remains slow, the supply chain has adopted a cautious approach, limiting downward adjustments in non-AI demand.
 
I'm sure CC Wei will tell us more tomorrow on the investor call. One thing I will tell you is that the majority of the design starts I see are multi-die, certainly over 50% and right now that means CoWos. I will be at the Chiplet Summit here in Silicon Valley next week. Should hear more then.
 
Relevant news:


 
Last edited:
C.C just basically called BS on this rumour. Never made any sense regardless
The CoWoS demands are so extreme that the rumor can't possibly be true.

We can see the intense demand reflected in TSMC's rapid decision-making: Last May, TSMC discovered relics at the ChiaYi site intended for advanced packaging, which required them to pause work to preserve these artifacts. In less than three months, they announced a backup plan to spend over US$500 million to purchase and remodel another Innolux's factory for advanced packaging. By October, the preservation of the relics at the ChiaYi site was completed, allowing them to stay on schedule.
 
Q1 and 2025 expectations:

Source:

Machine translation:
[TSMC Investor Conference to Take Place] Foreign Investors Focus on Trump’s New Tariffs, CoWoS Capacity, and New Competitor Rapidus


Leading semiconductor foundry TSMC will hold a physical/online investor conference this Thursday (1/16), with its profit outlook playing a critical role in shaping the trajectory of Taiwan's stock market. Foreign investors are expected to focus on key issues, including the impact of new tariffs imposed by the Trump administration, expansion of CoWoS capacity, changes in Intel's outsourcing orders, and the emergence of Japan-based competitor Rapidus.


According to media reports, TSMC Chairman and CEO C.C. Wei met with NVIDIA CEO Jensen Huang at TSMC's Hsinchu headquarters Thursday morning. Senior executives from both companies attended the meeting, which concluded at 11 a.m. Wei is scheduled to attend the investor conference later in the afternoon at the Mandarin Oriental Hotel in Taipei.


Ahead of the conference, various foreign investment firms have issued reports, with most maintaining a "Buy" rating for TSMC. Morgan Stanley noted that while AI demand growth is a long-term trend, from a cyclical perspective, the first quarter of 2025 may start slowly for TSMC. By the second half of the year, once inventories are fully depleted and PC and smartphone upgrade cycles resume, customers are expected to restock semiconductor orders. The overall semiconductor industry is projected to return to positive growth, allowing TSMC to maintain a 26% compound annual growth rate.


Morgan Stanley’s report also indicated that, based on supply chain investigations, customers like AMD and Broadcom have released part of their CoWoS-S capacity, which NVIDIA plans to take over and convert to CoWoS-L for producing the GB300A chips. If overall demand for TSMC's CoWoS capacity remains unchanged, GB300A chip production could see a slight increase in the second half of the year.


For Q4 2024, Morgan Stanley estimates TSMC’s gross margin will reach 59.3%, with EPS at NT$14.8 and full-year EPS at NT$45.6.


Regarding Q1 2025 revenue, Morgan Stanley noted that TSMC has raised its wafer foundry prices by an average of 3–4% this year and secured additional 3nm Lunar Lake processor outsourcing orders from Intel. However, limited sales growth for the iPhone 16 series may result in a slight sequential revenue decline of 5% for Q1 2025. With TSMC’s overseas fabs in the U.S. and Japan ramping up production, gross margins are expected to be diluted by 2 percentage points, lowering Q1 gross margin to approximately 57%.


For TSMC’s full-year 2025 revenue growth, Morgan Stanley projects the company’s annual U.S. dollar revenue growth rate will be below 20%, with cloud-based AI revenue contributing around 25%. Goldman Sachs forecasts a 25.8% annual increase in U.S. dollar revenue, driven by strong growth in AI and HPC applications. HSBC predicts a 25% revenue growth rate for 2025, while Citigroup estimates 20–25% growth, highlighting NVIDIA as likely to surpass Apple as TSMC’s largest customer, contributing about 20% of total revenue.
 
Back
Top