A recent Digitimes report claims that due to decelerating demand for smartphones and the chips that power it, TSMC (Taiwan Semiconductor Mannufacturing Company) has slashed prices of their 20nm and 28nm chips by up to 10%. This has been done in order to boost process utilization rates of their 20nm and 28nm chips which saw utilization rates as low as 60% and 70% in Q2. Because fabs are extremely costly to maintain even when not being used, sub-80% utilization rates are unsustainable for the contract chipmaker. TSMC is expecting the price cuts to improve utilization back up to over 80%.
Speaking of TSMC’s 28nm process, both Nvidia and AMD contract with TSMC for their GPUs and a price cut on manufacturing is surely to benefit their bottom line. Unfortunately it’s unlikely that this savings will be passed onto consumers, but it’s always worth hoping for.