Analysts believe the reduction was caused by a cutback in Qualcomm SoC orders. Samsung’s decision to use in-house 14nm parts for its flagship phones is obviously a factor, too.
Capex cut
TSMC also announced that it would reduce its capital expenditure this year by as much as $1 billion. However, the company said this is good news, because 16nm migration is going faster than expected.
TSMC previously made it clear that it expects foundry growth to slow down this year, due to the macroeconomic situation.
However, the foundry still expects a recovery in the latter half of the year. The company expected 12% revenue growth this year, but now it has revised its forecast to “about 10%.”
TSMC’s 28nm blues
While the company claims its 16nm node is on track, and coming in under budget, the short term problem for TSMC is actually its legacy 28nm node. The company reportedly lost quite a few orders to SMIC and UMC, including orders from industry heavyweights like Qualcomm and MediaTek.
We discussed why 28nm will remain a relevant node for several quarters to come in a recent feature. It will be used for low- to mid-range parts for at least another year.
As for the 20nm node, Apple is still going strong and new Snapdragon 810 design wins are being announced on a weekly basis (Xiaomi, ZTE, LG and more). However, losing Samsung’s flagships is still a big deal and is bound to impact both Qualcomm and TSMC.
