The iPhone sales in Mainland China have slightly increased due to price discounts, leading us to revise our estimation from 52~57M to 53~58M in 1Q23. However, we remain conservative for the iPhone production forecast in 2Q23 as we haven’t seen a strong demand recovery. We preliminary expect the iPhone 15 series production in Y2023 may be in the range of 85~90M, with 40% low-end and 60% high-end models in the product mix.
TSMC is expected to continue transferring foundry capacities from 4/5nm to 3nm in Tainan Fab 18 due to slower wafer demand for the former and increased migration to the latter. In anticipation of strong wafer demand in the coming years, particularly from major clients like Apple, Qualcomm, MediaTek, and AMD, TSMC's 3nm capacities are projected to reach 50-60K/m in Y2023 and 90-100K/m in Y2024.
After Chinese New Year, we observed the sales momentum may not sustain on a long-term basis. Thus, we revised down the iPhone production shipment forecast to 52~57M in 1Q23. We believe the current iPhone’s retail price cut in February within Mainland China may also be one of the indications that the demand may be declining, and thus we hold a conservative view in 2Q23.
Our research indicates that TSMC's N3 UT (utilization rate) is likely to increase in the first quarter of 2023 and remain fully utilized in the second quarter. However, N4/5 UT may experience a decline in the first quarter followed by a gradual recovery in the second quarter. Meanwhile, N6/7 UT is expected to decrease to the mid-60s due to weakened demand and inventory issues.
After the China’s reopening, we observed that demand for iPhone in January may be stronger-than-expected thanks to the Chinese New Year. We therefore slightly revise up our iPhone production forecast to 61~66M in 1Q23. Compared to iPhone 13 Pro series’ End-of-Life (EOL) plan in Sep’22, iPhone 14 Pro series might face their EOLs in Jun’23, which is comparatively shorter. Thus, we estimate the iPhone production shipments in 2Q23 to be a 15~20% YoY decline.
According to our research, we briefly updated TSMC Arizona Fab21 Schedule as below, 1) P1 tool move-in has been delayed to May’23 due to prolonged clearances and import process of wafer equipment tools. 2) P2 has been under construction and expected topping and tools move-in in 3Q24.
Although China authorities announced to ease the COVID restrictions in the early December, we still reiterate our Y2022 iPhone production forecast of 240~245M since we have already contemplated the operation recovery in Foxconn Zhengzhou.
We observed TSMC may revise down 4/5nm capacity expansion from prior an additional 30~35K/m to 5-10k/m only due to the weakened demand. In addition, Fab18A may convert 10-15% 5nm capacity to 3nm (N3E) and slow down tool installation in P7.
We revised down the total iPhone production forecast to 240~245M in Y2022 for two reasons. 1) Two iPhone 14 high-end models affected by Zhengzhou Foxconn pandemic. 2) Lukewarm demand for two iPhone 14 low-end models.
TSMC N3 UT may slowly step up in 1Q23. However, N4/5 UT may decrease to low 80s due to adjustment from Qualcomm and Nvidia. As for N6/7, the UT may drop to low 70s in 1Q23 due to demand and inventory problem of AMD and Nvidia.
We revised down the total iPhone production forecast in Y2022 from 260~265M to 255~260M to reflect the sluggish demand for iPhone 14 Plus after the model being shipped.
We believe TSMC N4/N5 UT rate may maintain above 100% (down 4~6% from peak UT rate). Apple and Qualcomm’s flagship AP may support N4/N5 to become the most fully utilized among TSMC’s leading nodes; GPU and crypto applications may be downward adjusted due to respective market weakening.
Stay up-to-date with our latest insights and analysis from our team of experts in the tech industries.
Subscribe to industry Insights email alerts
Subscribed to industry Insights email alerts, contact us to access our full insights.
如若您確定要退訂電子報，請您於下方輸入 E-mail 信箱地址。送出後系統會發出退訂確認信，請您點擊信中連結完成退訂，謝謝！