TSMC is faced with new challenges, foundry orders or flows to the mainland. "The US-China trade conflict is not good for the chip industry. China assembles many end products, so its trade disputes may affect us." Chairman of Taiwan Semiconductor Manufacturing Co., Ltd. Zhang Zhongmou accepts UK finance The Times said in an exclusive interview.
His worries are not unreasonable. If the United States raises tariff barriers, the entire semiconductor supply chain will be greatly affected. We must know that the final assembly of TSMC's products is mainly concentrated in the mainland.
However, the greater risk for TSMC is not that the end product manufacturing will be subject to short-term interference, but that TSMC's chip manufacturing orders may flow to alternatives in China.
Qualcomm, Broadcom, and Nvidia almost monopolized the field of chip design. TSMC is the main supplier of these companies. Once the design industry has new options, it may no longer just place orders for TSMC.
China has begun independent innovation in science and technology, including its own manufacturing of the most advanced semiconductors. It is understood that the national IC investment fund company supported by the Chinese government will announce the investment of RMB 300 billion for the Chinese chip industry.
China has the strength to come from behind in the field of chip design. There are currently 20 fabs under development in China, and the government will provide incentives. TSMC is also holding this momentum and has set up a fab in Nanjing, China.
In the early 2000s, TSMC got rid of rivals such as UMC and IBM and recently tried to shake off Samsung. But a long list of cash-rich and hungry Chinese competitors is the real challenge for TSMC, and it is also a challenge that Zhang Zhongmou never encountered in the past.
Is it really possible for a Chinese fab to eat these orders?
In terms of high-end product foundry, China is far behind TSMC. Take SMIC as an example. Although SMIC's 28nm revenue is estimated to account for about 10% of its revenue in the fourth quarter of 2017, it is mostly biased toward mid-to-low-order 28nm polysilicon nitride oxide (Ploy/SiON) technology. The 28nm HKMG (high-k insulation + metal gate) process yield has been less than expected. However, TSMC and other manufacturers have been working hard on 28nm HKMG for many years, and will enter the 7nm this year, 5nm and 3nm are also planning, this is a very difficult gap.
In addition, Samsung also began to force wafer foundry this year. At the beginning of April, Samsung completed the research and development of the new 7nm process, which is half a year earlier than expected. It also laid the foundation for Samsung and TSMC to grab orders for the Qualcomm Snapdragon 855 OEM.
The technological dispute between Samsung and TSMC became more fierce at the 16/14nm node. The two sides did not give up each other and invested huge amounts of money to advance the new process. At present, both 10nm processes are successfully commercialized. Samsung's investment in 7nm is more advanced. It was originally planned to be completed in the second half of this year but it was completed half a year earlier. It will fully shift to 5nm process R&D.
Let's take a look at a slightly backward process. Many experts believe that due to the rise of the Internet, the 28nm node will exist for a long time. The TSMC Nanjing plant has accelerated the process, and 16nm is also accelerating the import, and this we have not yet shadow.
Another competitor UMC also strengthened its competitiveness. Its 12-inch plant in Xiamen has begun to introduce 28 nanometers. Samsung also announced recently that it will focus on current mature 8-inch wafer foundry technology to provide customized foundry services for SMEs.
For Chinese foundries, there is still a long way to go.
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