Nvidia cuts orders to TSMC, less RTX 4000 than expected?

Nvidia cuts orders to TSMC, less RTX 4000 than expected?

Nvidia cuts orders to TSMC

Inflation and the drop in demand for electronic devices, now less necessary both due to the return to work in the office and partly due to the decline in crypto, are forcing companies to cut production in the face of a consequent lower number of sales expected in the near future. As reported by DigiTimes, houses like Nvidia, AMD and Apple intend to revise downward the percentages of their production orders with TSMC.

While AMD would be considering reducing the production of its chips that use 7nm nodes and 6nm, Nvidia is currently dealing with a situation where the GPU market is very saturated, resulting in a likely lower demand that could impact the new generation of RTX 4000 video cards. Although the second-hand market is now practically clogged with video cards used for mining, now no longer profitable, the Californian house is still full of models of the RTX 30 series for sale, which is why it would be willing to further lower prices.

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The current situation has caused a major market downturn for both Nvidia and AMD, which they now find themselves recording the lowest selling price for their shares, which both fell by 50% in just six months. Inflation is also the reason why Intel has decided to cut the selling price of its Alder Lake CPUs to PC manufacturers.

Nvidia might want to cut 5nm TSMC orders for RTX 4000 series as demand cools

In brief: Nvidia, AMD, and Apple are all reportedly cutting their wafer orders from TSMC as people put less priority on buying the latest electronic goods in light of rising global inflation. In the case of team green, it is also dealing with an excess of RTX 3000-series stock and more ex-mining cards hitting the market, making its upcoming RTX 4000 series a less-enticing prospect.

According to a report by DigiTimes, translated by RetiredEngineer, three of TSMC's major customers—Apple, Nvidia, and AMD—are looking to revise their orders.

The reassessment comes as we leave behind the pandemic era that saw a boom in consumer electronic sales as people worked and played at home. The world is also dealing with an economic downturn caused by rising inflation and the Russia/Ukraine war. Global PC sales have already slowed, and fewer people are rushing to buy the latest smartphones and TVs.

Some highlights of the report include a claim that iPhone 14 mass production has already started, but the initial shipment target of 90 million has been cut by 10%; the A16 SoC in the iPhone 14 will reportedly stick with TSMC's 5nm process node.

AMD, meanwhile, is said to have reduced its 7/6nm wafers orders by around 20,000 in total for the fourth quarter and Q1 2023. It is noted, however, that orders for 5nm wafers for its PC and server hardware have not been affected.

Nvidia has already made pre-payments to secure 5nm capacity from TSMC. The company is expected to return to the Taiwanese giant for its RTX 4000 series after defecting to Samsung for consumer Ampere—it already uses TSMC for its 5nm Hopper data-center architecture. But with a glut of current-gen cards that it's trying to get rid of, miners selling their GPUs as crypto crashes, and rising inflation, Nvidia is facing lower demand and wants to cut 5nm orders.

It seems TSMC is unsympathetic to Nvidia's plight and is offering no concessions. The best it can do is delay shipments by one quarter or to Q1 2023, which would mean Nvidia finding replacement customers for TSMC's vacated production capacity.

h/t: VideoCardz