One person's loss is another's gain, or a company's in this case. After all, AMD seems to be having a field day with its older 5nm CPUs, which entail crazy-high yields by the way, as both Qualcomm and MediaTek vacate some of TSMC's 4nm and 5nm lines on shrinking smartphone demand.
AMD reaps the benefits as the broader smartphone industry enters a deep freeze, forcing Qualcomm and MediaTek to abandon some of their reserved capacity at TSMC
By now, it's public knowledge that the global mobile industry is contending with a chronic DRAM shortage as most of the associated fabrication capacity has been allocated towards producing the more lucrative High Bandwidth Memory (HBM) for AI-related workloads.
What's more, as we reported recently, these memory-led pricing pressures are hitting the entry-level and mid-tier smartphone segments particularly hard, especially given their limited pricing-related maneuverability. Consider the fact that DRAM costs now make up a whopping 35 percent of the Bill of Materials (BOM) of a given entry-level handset, while NAND costs add another 19 percent. Together, these two components now constitute a whopping 54 percent of a given budget smartphone's total cost.
It is hardly a surprise, therefore, that both MediaTek and Qualcomm appear to have slashed their production cadence for 4nm and 5nm chips at TSMC, as demand for low- and mid-tier smartphones enters a deep freeze. As such, this production curtailment equates to around 20,000 to 30,000 wafers, which corresponds to a volume of between 15 million and 20 million mobile chips.
This brings us to the core of today's topic. As MediaTek and Qualcomm vacated some of the 4nm and 5nm lines at TSMC, AMD appears to have moved in, and quite aggressively at that.
In fact, AMD's Lisa Su confirmed these aberrant dynamics at this week's earnings call, where she declared at one point that AMD's growth in Q1 was "much more unit-driven," going on to note:
"We are shipping more CPUs, you know, across not just the high-end, you know, Turin family, but we're actually shipping a lot of Genoas, sort of the Zen core family as well."
So there you have it: the semiconductor industry's very own butterfly effect, where the collapsing demand for smartphones really does appear to have worked wonders for AMD.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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