US companies rely on TSMC
The global chip industry production capacity demand has changed tremendously. At the most tense moment of chip shortage, it is not that easy for customers to buy sufficient chips, and it is difficult to find a chip.
and chip shortage also caused chip manufacturers to increase prices. The most prominent thing is that TSMC first canceled the 3% OEM discount, and then increased the price of various processes by 10% to 20%. If a price increase is still acceptable for customers, TSMC plans to continue a new round of price increases in 2023.
Among them, the price of 8-inch wafers increased by 6%, and the price of 12-inch wafers increased by about 5%. TSMC's price increase behavior is actually not difficult to predict, because of the rising prices of supply chain materials and inflation issues, TSMC can only offset additional capital expenditures by price increases and stabilize its business revenue structure.
But after TSMC raises the price, customers may not feel good. Originally, OEM prices are not cheap, and if prices continue to rise, the consumer market may not accept them.
So at the beginning, Apple rejected TSMC's price increase requirement and did not accept TSMC's OEM quotation in 2023. The outside world believes that Apple has great confidence. On the one hand, it is TSMC's largest customer, and on the other hand, Apple is the main source of TSMC's high-end chip orders, so Apple has the confidence to bargain with TSMC.
However, things have reversed. Taiwanese media reported that Apple has compromised and is willing to accept TSMC's price increase in 2023 to pay the additional costs incurred by TSMC's foundry chips in the next year.
Even big customers like Apple have compromised, and other American companies probably have no room for bargaining. After all, the core technology is in the hands of TSMC. Although , Samsung can keep up with TSMC's process technology, the yield problem is hard to describe.
looks around the world, only TSMC meets the chip foundry requirements of US companies for pursuing top performance. Therefore, it is reasonable to accept price increases.
Not only that, Apple also reported another news, a research report said that Apple is preparing to use TSMC's foundry chips for Mac computer .
TSMC plans to mass-produce 2nm chips by 2025, and Apple is now planning to design chips. This also shows that Apple's chip design plans in the next few years will be manufactured by TSMC. This is true for 3nm, and the same is true for 2nm, and even the more advanced 1.4nm in the future.
Apple reported two news, first of all, it compromised TSMC's price increase requirements in 2023, and secondly, it will use TSMC's 2nm process in 2025. Both of these news points to one point, that is, US companies at this stage are still inseparable from TSMC.
Although Samsung is also a global chip foundry giant and the United States is also vigorously supporting the development of Intel , TSMC is still the industry leader before reaching its chip foundry strength comparable to TSMC.
What are the trump cards of TSMC?
TSMC's chip foundry strength is world-leading. If it is just like this, TSMC is not enough to stand at this position. Moreover, TSMC did not agree to Apple's request to increase prices at the beginning, which shows that TSMC has sufficient bargaining power and would not be like this if it does not have a strong enough trump card. So what trump cards does TSMC have?
From the perspective of chip production capacity, TSMC has 80 EUV lithography machines worldwide, accounting for half of the total EUV lithography machine production capacity of ASML. These EUV lithography machines can expose a large number of 8-inch and 12-inch wafers, and can create hundreds of billions of chips each year.
Customers often consider whether there is enough production capacity. Production capacity represents competitiveness, so manufacturers with sufficient production capacity can often obtain more order support.
Secondly, in terms of core technology, TSMC has applied for more than 75,000 patents, and has mastered a large number of core patents in high-end chip manufacturing processes. More than 52,000 pieces were approved.
core technology represents hard-core technology strength and is also a standard for measuring the foundry level of chip manufacturers. The more patents TSMC has, the more technological advantages it has.For American companies that pursue high-end chip foundry, they cannot find a better choice except TSMC.
There is also the industry chain integration capability. TSMC has more than 500 world-class semiconductor suppliers, including lithography machines, , etching machines, photoresist and other equipment, and the materials are the best in the world. If it is a second-rate manufacturer, it may only be able to cooperate with suppliers of average level, and the products produced will be somewhat different from those of top manufacturers.
Overall, TSMC's trump card is very strong, which may be the confidence that TSMC can insist on price increases. However, TSMC cannot be taken lightly. The competitors have been developing and improving, and the United States’ thinking about TSMC is difficult to guess. There are still many areas that need to be worked hard and progress towards the future, so it depends on TSMC’s performance.
written at the end
TSMC has been leading the chip foundry industry for decades, and has been standing at the top of the industry's pyramid through accumulated technology. It is undeniable that TSMC is strong, but TSMC uses other people's technology and will inevitably be restricted and cannot successfully produce OEM for specific customers. I hope TSMC can recognize the reality, strengthen the proportion of independent research and development technologies, and choose the right path.
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