November 17th news, according to relevant media reports, benefiting from the demand for 5G smartphones and high-performance computing, TSMC's four major customers Apple, Qualcomm, Nvidia and MediaTek have recently increased their orders for 7nm/5nm.
TSMC is continuing to increase production capacity in response to strong demand for 5nm process and tight production capacity. The monthly production capacity has accelerated from the previous 80,000 pieces to 100,000 pieces, and the climbing speed of mass production yield has jumped significantly from 7nm. However, as customers continue to expand their production targets, some orders have been queued until the second half of 2021 due to the continued supply and demand imbalance.
TSMC's 5nm process chip just started mass production this year and has begun to prepare for the 3nm process. On October 5, media reported that TSMC won another order for Intel 3nm, and it is highly likely that it will be a GPU, which is the next generation of Intel graphics cards.
It is reported that the 3nm process technology is currently being promoted as planned, and it is planned to start risk trial production in 2021 and put into production on a large scale in the second half of 2022.
US stocks closed on November 16, TSMC rose 6%, and its stock price broke through the $100 integer mark for the first time during the session. TSMC's market value exceeded US$500 billion, and it has risen by more than 70% year-on-year.
Judging from the ranking of listed companies with the highest market value in the world, TSMC is currently ranked 9th in the world's market value, and its market value is quickly approaching Berkshire Hathaway, which ranks 8th.
TSMC's most important businesses are smartphones and high-performance computing, accounting for 46% and 37% respectively in 20Q3. The future prospects of these two businesses are very clear.
In terms of high-performance computing, AMD continues to grab the market from Intel, and Apple has also begun to launch its own Mac chips, which has continuously benefited TSMC; in terms of 5G, with Qualcomm and MediaTek's announcement of "beautiful" Q3 results, the trend of 5G is already unstoppable.
TSMC's latest October revenue data showed that revenue reached NT$119.303 billion equivalent to US$4.2 billion, a year-on-year increase of 12.1%, which is TSMC's revenue for 18 consecutive months since June 2019!
TSMC's financial report shows that its revenue in the third quarter of this year was NT$356.426 billion, a year-on-year increase of 21.6% and a month-on-month increase of 14.7%; in US dollars, the third quarter revenue was NT$12.14 billion, a year-on-year increase of 29.2% and a month-on-month increase of 16.9%. In response, TSMC raised its annual growth forecast to 30%, compared with 20%. It said that demand from 5G smartphones is very strong.
From the perspective of stock price, TSMC's stock price has risen nearly 20 times since 2009, with an annual compound return of more than 30%. Compared with many chip star stocks such as AMD, Nvidia, and ASML, TSMC's stock price has not increased the highest, but it is very stable. From 2009 to the present, from the annual line, among the trends in the past 11 years, only TSMC closed down 4.31% in 2018, while the S&P 500 fell 6.24% during the same period.
Tianfeng Securities analyzed that judging from the performance of the two major wafer foundry giants in the third quarter, downstream demand drives IC designers and chip manufacturers in the middle and upstream, and the continued growth of applications such as 5G will continue to drive the development of the industrial chain in the future. As TSMC's stock price hits a record high, the valuations of A-share related suppliers are expected to increase accordingly under the industry's prosperity cycle.
CICC Liu Shuangfeng said that the industrial chain stocking and local supporting facilities are driven by the overall stability of the semiconductor industry, the downstream demand is strong, and the OEM/packaging and testing capacity is tight. The performance of related companies in the third quarter is improving, and it is still expected to maintain in the fourth quarter.
Why is TSMC so popular? Although TSMC lost Huawei, a high-quality customer due to the modification and restrictions of US chip rules, the overall situation of TSMC has not been affected. This year, TSMC's 5nm chip has been almost fully occupied by Apple.
In addition, as the world's largest semiconductor company, it is in an absolute leading position in computer chips. However, because the chip process has been delayed several times, it has not overcome the difficulties of 7nm chips until now. Therefore, in addition to continuing to develop its own products, Intel also handed over some orders to TSMC for foundry. Therefore, TSMC does not lack business at all, and many manufacturers must reserve production capacity in advance. When the scarcity is expensive, TSMC has even increased the foundry price of some chips.
Recently, TSMC has once again reported that it has made a major breakthrough in 2nm process technology. According to relevant predictions, TSMC's 2nm process will undergo risk trial production in 2023, and if the progress goes smoothly, mass production will begin in 2024. At the same time, TSMC also stated that Moore's Law will continue, and the research and development of the 1nm process in the future is also on the way.
