Industry sources told DigiTimes that the capacity utilization rate of TSMC's 28nm processes has fallen to 70 percent due to a slowdown in orders for high-end mobile chips. The anonymous sources explained that disappointing sales of high-end smartphones prompted chip firms to cut back on wafer starts to prevent a buildup of excess inventory.
TSMC saw its utilization rate of 28nm processes drop below 80% earlier in the third quarter, the sources indicated. As the foundry managed to persuade its 28nm chip customers to maintain a certain level of orders, the process utilization rate was able to bounce back and approach 90% for the quarter, the sources said.
However, with demand for high-end smartphones staying weaker-than-expected, TSMC's 28nm chip customers have moved to decelerate their pace of orders recently. Consequently, TSMC's utilization rates for its 28nm processes have slipped rapidly over the past few weeks, the sources noted.
The cutback of orders from TSMC's key mobile chip clients will reflect on the foundry's output performance in the first quarter of 2014, the sources observed.