Up to 80%, which is quite small.
At the quarterly reporting conference held in mid-October, TSMC management said that the demand for components for smartphones and laptops has decreased, and therefore it makes no sense to purchase equipment for the production of 7nm and 5nm products in the same quantities. As a result, it was decided to cut capital expenditures this year by 10%, or $4 billion in absolute terms. As DigiTimes now notes, TSMC’s equipment utilization rate will drop to 80% in the first half of next year.
Image Source: DigiTimes
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The higher the degree of utilization of production lines, the faster the capital costs pay off. In addition, if the conveyor load falls, then the unit cost of production may increase, since a number of fixed costs do not disappear anywhere, but they have to be compensated by selling a smaller amount of products. As with the quarterly event, DigiTimes reports a decline in 7nm, 6nm, 5nm, and 4nm production at TSMC in the next half year.