[News] TSMC Reportedly Received Urgent Orders from Chinese Clients, as They Offered to Pay up to 40% Extra

---

---

After TSMC released its Q3 guidance at the earnings call last week, eyeing for at least a 7.5% revenue growth, it is now said that the foundry giant has got another major boost for the following quarters. According to a report from Technews, citing Chinese media outlet ijiwei, the company is said to receive an increase in orders for Super Hot Run (SHR) from Chinese clients, and they are willing to pay up to 40% extra.

Sources cited by the reports indicated these rush orders may come from Chinese tech heavyweights, including Bitmain, Alibaba’s T-Head, and Sanechips, which are urgently stockpiling chips due to escalating tensions between the U.S. and China.

In fact, according to information from TSMC’s previous earnings conference, sales generated from orders by TSMC’s Chinese clients in the second quarter of 2024 increased from 9% of total wafer revenue in the previous quarter to 16%.

The reports stated that Chinese chip manufacturers are accelerating their pace for placing orders in response to the uncertainties arising from the upcoming U.S. presidential election and its impact on U.S.-China relations. This move is expected to provide support for TSMC’s revenue and gross margins afterwards, which may help its performance in the third quarter and the full year to exceed forecasts.

TSMC raised its projected revenue growth for 2024 to over 25% last week, thanks to the robust demand for high-end smartphones and artificial intelligence (AI) devices, which is expected to boost the use of advanced 3nm and 5nm chips.

Previous reports have indicated that TSMC is facing overwhelming demand for its 3nm technology, with major clients like Apple and NVIDIA eagerly booking for more capacity, while orders are expected to be filled through 2026. Now it seems that the demand from China has also been heating up.

Reportedly, TSMC is planning to raise its 3nm prices by over 5%, and advanced packaging prices are anticipated to increase by approximately 10% to 20% next year.

To meet this robust demand, TSMC plans to increase monthly production capacity to 130,000 wafers for its 3nm process and 160,000 to 170,000 wafers for its 4/5nm processes.

Read more

• [News] TSMC Projects 7.5% Q3 Revenue Growth, Adjusts Full-Year CAPEX Range
• [News] Chinese Firms Stockpile Chips Amid Geopolitics; TSMC Sees Rush Orders

(Photo credit: TSMC)