Recently, a mainland Chinese chip company said that TSMC is willing to release more production capacity for it. At the same time, TSMC’s June results showed that revenue once again achieved year-on-year growth, but there was a month-on-month decline. This comparison may be able to see Why does TSMC show favor to mainland Chinese chip companies?
TSMC’s overtures to mainland Chinese chip companies have already begun in the first quarter of this year. Its performance in the first quarter of this year shows that Chinese chip companies contributed 11% of its revenue, compared with only 6% last year. A substantial increase of more than 80%.
TSMC has shown goodwill to mainland chip companies because it has received nearly 70% of its revenue from U.S. chips in the past two years, but it has also had to make concessions to U.S. chips. The U.S. asked it to hand over confidential data, but it had to do so. The U.S. It was asked to set up a factory in the United States and did so, but the United States ultimately did not give it a share of the US$52 billion in subsidies as expected.
In contrast, while the United States required , Samsung, and TSMC to build factories in the United States, the United States' own chip manufacturing company Intel did not set up its most advanced Intel 4 factory in the United States, but built it in Ireland. Intel 4 factory, this shows that Intel believes that the costs of labor, energy, land, etc. in the United States are too high, making it difficult to make a profit from building new manufacturing plants in the United States.
Due to the poor profit prospects of setting up a chip manufacturing plant in the United States, and the delay in allocating the US$52 billion in subsidies to TSMC in the United States, TSMC founder Chang Chung-mou has repeatedly said this year that it is difficult to obtain funding for setting up a chip manufacturing plant in the United States. Li pointed out that the United States is no longer suitable to promote the chip manufacturing industry.
Since the beginning of this year, there have been signs of oversupply in the global chip market, and American chips have been the first to bear the brunt. First, American radio frequency chip companies Qorvo, Skyworks, etc. have inventories of more than 6 months. Recently, the world's largest American analog chip company has also reported high inventory levels. And had to drastically reduce the price by 90% to sell it.
The U.S. chip glut first occurred because of the measures it took since 2019, forcing China to vigorously promote chip self-sufficiency. After several years of development, China's chip self-sufficiency rate increased to 36% in 2021. The chips imported in the first four months of this year A decrease of 24 billion. China is the world's largest chip importer, and the chips it purchases account for up to 60% of the global chip market; the United States is the world's largest chip exporter, accounting for nearly 50% of the global chip market. The sharp decline in China's imported chips has led to the decline of U.S. chips. of excess.
With the surplus of U.S. chips, the revenue brought by U.S. chips, which contribute nearly 70% of TSMC’s revenue, has naturally declined. This should be the main reason for the month-on-month decline in TSMC’s revenue in June this year. At this time, China The importance of chips to TSMC has been further highlighted.
Data from 2021 shows that 19 of the 20 fastest growing chip companies in the world are chip companies from mainland China. Mainland China chip companies have become an important force in the sudden rise of the global chip industry. TSMC has experienced a month-on-month decline in revenue. Under such circumstances, the rapidly growing chip companies in mainland China have naturally attracted the attention of TSMC.
In addition, TSMC releases more production capacity to mainland Chinese chip companies, and also considers using mainland Chinese chip companies to check and balance American chips. After all, it is not a good thing for any chip manufacturing company to rely too much on a single customer.
In this way, it is not difficult to understand that TSMC has frequently shown goodwill to mainland China chip companies this year. As the global chip industry enters a downward stage, mainland China chip companies that continue to steadily promote chip self-sufficiency are expected to bring more revenue to TSMC. At the same time, mainland China's chips are also more open and will not have many requirements for TSMC like American chips, making them a more friendly customer of TSMC.
