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Apple and Qualcomm’s Reduced Demand for 3nm Chips in 2024: A Bleak Outlook for Smartphone Chipsets

September 28, 2023

The future prospects of the smartphone chipset market appear dim, as per analyst Ming-Chi Kuo. In their latest report, Apple is reportedly cutting its orders for 3nm chips, and Qualcomm is following suit with reduced production. This downturn has repercussions even for Dutch company ASML, which is now expected to decrease its EUV equipment shipments for 2024 by approximately 20-30%.

Kuo’s insights indicate that the prevailing market consensus suggested a potential bottoming out of the semiconductor business in the second half of this year. However, this downturn might persist until Q2 2024.

ASML, formerly known as Advanced Semiconductor Materials Lithography, is a crucial equipment supplier for chipset foundries worldwide. Kuo identified three primary reasons behind ASML’s lowered shipment forecast:

  1. Apple’s Declining Demand: Apple is grappling with reduced demand for MacBook and iPad devices, primarily driven by the decline in the work-from-home trend. Despite introducing new Apple chips and mini LED screens, consumers are not rushing to upgrade, resulting in a 30% decrease in laptops shipped (a total of 17 million for the fiscal year) and a 22% drop in shipped iPads (48 million).
  2. Qualcomm’s 3nm Chip Demand: Demand for Qualcomm’s 3nm chips has waned, partly due

to Huawei’s decision to cease sourcing chips from the San Diego company, irrespective of the presence of 5G modems. Furthermore, the increasing adoption of Samsung’s Exynos 2400 chips is denting Qualcomm’s overall forecast.

  1. Lower Interest in Samsung and Intel Processes: Demand for Samsung’s 3GAP+ and Intel’s 20A processes is not meeting initial expectations. Additionally, Samsung, Micron, and SK Hynix are not anticipated to launch significant memory advancements until 2025-2027.

This dual blow to Apple and Qualcomm, coupled with challenges in the broader semiconductor landscape, paints a bleak picture for the smartphone chipset market in the foreseeable future.

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