Recently, TSMC President Wei Zhejia sent an employee letter, saying: "With the post-epidemic era, life has gradually normalized, and terminal consumption has entered a period of inventory adjustment, and employees are encouraged to rest more and get along with their families more. "
At the same time, Wei Zhejia said that rest personnel does not include 3nm, and R&D process related personnel of below 3nm.
is really rare for TSMC. Does this mean that TSMC is starting to decline?
TSMC pushes chip manufacturing technology to its peak
TSMC was founded in Hsinchu, Taiwan in 1987 by Zhang Zhongmou . It is the world's first chip foundry company . Its products cover computers, mobile phones, communications, consumer and industrial chips.
In the early days of TSMC's creation, it had poor technology, weak talents and few customers. In order to survive, it could only go to the door to ask for Intel .
Intel technical team provided on-site guidance, rectified more than 100 shortcomings, obtained Intel certification, and began to gradually get on track.
The operating models of TSMC and Intel are not the same. TSMC focuses on chip manufacturing and manufactures foundry for third-party chip designers. Intel is a typical IDM model, integrating design, manufacturing and packaging.
Three correct choices made TSMC counterattack Intel and become the strongest chip manufacturer
for the first time, and cooperated with AMD to enter the high-performance X86 market
In the PC market, AMD has always lagged behind Intel, and the gap is very large.
Strangely, since AMD found TSMC for foundry, the chip performance has been greatly improved, constantly challenging Intel, and its market share has also increased significantly.
The reason is that TSMC not only provides AMD with excellent manufacturing processes, but also helps it make breakthroughs in design.
TSMC has a chip design team of 3,000 people. This team came up with a solution to "can speed up data exchange on chips" and gave it to AMD for free. After that, AMD broke through 8 cores, or even 64 cores in a short period of time.
AMD is also increasingly cooperating with TSMC, and TSMC has also successfully entered the chip market of high-performance X86 architecture.
For the second time, deepened the mobile phone market, and quickly updated and iterated
After the outbreak of smartphones, TSMC quickly entered the smartphone chip market. It has successfully won major customers such as ARM, Apple , Huawei , Medtech , etc.
With the rapid update and iteration of smartphones, higher requirements have been put forward for mobile phone chip . TSMC is also desperately accelerating its research and development, and 14nm, 7nm, 5nm and 3nm technologies have successively conquered.
In comparison, Intel suffered consecutive setbacks at 10 nm, and the 7nm process yield was even lower than expected, resulting in Intel's complete loss to TSMC in terms of process manufacturing.
The third time, cooperating with Apple to create M1 Ultra
In March this year, Apple released a chip called M1 Ultra, which is spliced together by two Apple M1 Max chips to provide stronger performance.
technology is a disaster for Intel. The key to
is TSMC's manufacturing process. Apple has become the best spokesperson for this technology, which is conducive to TSMC's further optimizing process and using it on other customers.
As Intel's most direct rival AMD, once Intel uses this technology, Intel's life will probably be even more difficult.
In short, TSMC has united almost all chip designers outside Intel and worked together to push TSMC's chip manufacturing process to the top.
TSMC's performance tops
TSMC admits that the capacity utilization rate of above 7nm is no longer as good as before, but blames these as a periodic decline.
TSMC President Wei Zhejia said that in the past, due to the epidemic, digital transformation, 5G, AI and other needs, TSMC's business has developed rapidly.
Now, the end of the epidemic, the conflict between Russia and Ukraine, inflation , and structural changes in the mainland market have led to a comprehensive decline in chip demand, which eventually led to TSMC.
First of all, the epidemic is over? I'm afraid this is a bit optimistic in advance, right?
Currently, the cumulative number of new crown infections worldwide has exceeded 620 million, the number of confirmed cases exceeds 80 million, the cumulative number of deaths is 6.56 million, and the number of new confirmed cases is as high as 200,000 every day.
htmlOn 25, Biden received a vaccine booster injection and warned that the epidemic may worsen in the winter.Obviously, the epidemic has not improved.
Look at digital transformation, 5G, AI and other fields
Digital technology is a new concept based on the mapping interaction between the physical world and the digital world. It is one of the fastest innovation speed, most versatile, most penetrating and leading fields in the world today. Countries around the world are rushing to increase their investment.
G is a stage for competition among countries around the world. In order to ensure that they do not lag behind in this field, countries around the world have invested a lot of money in the research and development of 5G, and have even begun to deploy G. Not to mention the field of AI, "AI National Security Council Final Recommendation Report" of , Australia's "AI Action Plan"; Japan's "AI Strategy 2021", EU 's "European Standardization Strategy 2030", etc. are all continuing to layout this field.
No country is willing to lag behind in the field of high-tech, so there is no need to worry about the reduction in investment. What you need to worry about is that you are not doing well enough.
As for the conflict between Russia and Ukraine, inflation, etc., let’s take it as an excuse.
In fact, Russia and Ukraine have very small demand for chips. In the global chip industry of 4.5 trillion US dollars, the trade volume of the Russian chip market is US$50 billion, and Ukraine will only be even less.
As for inflation, I started calling for inflation in 2000. Now more than 20 years have passed, and I am not annoyed to speak or listen.
Wei Zhejia probably only says one thing right, chip demand in the mainland market has changed . Simply put, it is: "You can't buy high-end ones, and you don't need low-end ones."
Another point is: TSMC has frequently greatly increased the price, regardless of the customer's feelings.
TSMC's mid- and low-end market has been seized
TSMC is indeed the world's strongest chip foundry company. has strong technology, high yield rate, and low leakage rate, but at the same time the price is also high.
In August 2021, TSMC announced a price increase of html by 110%-20%, and the 80nm films reached between US$1,700-1,900, which is US$300 more expensive than before. The price of 7nm and more advanced processes is higher.
In May this year, TSMC once again notified customers that will increase the OEM price of most process nodes from January 2023, and the increase of some advanced process nodes will reach 7% to 9%.
TSMC did not explain the reason for the price increase. But it has been criticized by many people, and even many people within TSMC oppose this approach.
For TSMC's price increase, Apple has clearly rejected it, so TSMC has reduced its price increase for Apple to only 3%-5%.
TSMC's behaviors made other users miserable, and MediaTek, Nvidia, AMD and others were angry and cut orders. Some mature process orders have also been transferred to other foundries, such as SMIC .
In recent years, SMIC, the leading domestic chip foundry, has developed well, orders have continued to increase, and performance has also grown rapidly.
For the whole year of 2021, SMIC's operating income was 35.63 billion yuan, an increase of 29.7% year-on-year; net profit was 10.73 billion yuan, an increase of 147.7% year-on-year, and its performance was very impressive.
It is reported that SMIC mainly focuses on mature processes 28nm and above, and the 14nm process has also met the mass production standard.
In terms of technology nodes, the revenue contribution ratio of 55/65nm technology is 29.2%, the revenue contribution ratio of 40/45nm technology is 15.0%, and the revenue contribution ratio of 28nm is 15.1%.
In order to further expand its advantages, SMIC has also begun to increase its 28nm mature technology.
- 50 billion invested in Yizhuang, Beijing for the construction of a factory in Yizhuang, Beijing, and used for the mature 28nm process, and is expected to be completed in 2024;
- 153 billion invested in the construction of a factory in Shenzhen, and expanded the mature 28nm process;
- 60 billion invested in the construction of a factory in Lingang, Shanghai, and is used to provide a mature 28nm process;
Some netizens may ask, TSMC has begun to develop a 3nm process, and now it is still working hard to build a 28nm factory, and it will be eliminated soon.
is not the case. The 3nm process is mainly used on smartphones, tablets, and notebooks. However, in the fields of new energy vehicle , AIoTh, 5G network equipment, smart homes, etc., mature processes above 28nm can fully meet the needs.
SMIC's solution is an excellent strategy for to compete for in the tide of chip competition. Of course, SMIC has not given up on the research and development of advanced processes.
According to SMIC CEO 1 Liang Mengsong , SMIC has completed 14nm, 12nm and N+1 technologies, of which 14nm has been mass-produced, and 12nm is expected to mass-produce next year. The development of 7nm technology is completed, and the EUV lithography machine is only waiting for it.
In addition, in order to improve chip performance, SMIC is developing 3D stacking technology . This technology can put 2 chips together to achieve a 1+12 effect.
If the technology is mature, then the performance of the two 14nm Kirin 830s can exceed 7nm Kirin 980 after using 3D stacking technology. At that time, Huawei mobile phone will reuse Kirin chip .
This is definitely not a good thing for TSMC, Apple, , Qualcomm . Of course, this technology is definitely not a short-term success. It requires continuous investment of manpower, material resources and financial resources.
In short, TSMC has been eroded in the mid- and low-end market, and its share is declining, which has become an unchangeable fact , so TSMC will bet on the 3nm process in the future.
TSMC bet on 3nm technology
I have to admit that TSMC's technology is powerful and can be said to be the only one in the 3nm field.
TSMC officially announced that it will mass-produce 3nm chips in the second half of 2022, while Samsung ’s 3nm process will not be mass-produced until 2024. In other words, if you want to use 3nm chips next year, only TSMC will have no branches.
Due to price reasons, Apple's A16 chip still uses TSMC's 4nm process, and next year's A17 will officially use 3nm technology.
It is reported that TSMC's 3nm process still uses fin field effect transistor , that is, FinFET. The first generation of 3nm technology is called N3, and subsequent upgraded versions include N3E, N3P, and N3X.
TSMC 3nm N3, transistor density reaches an astonishing 250 million units/mm²! It is three times the density of the 7nm chip. In terms of performance, it has improved by 7% compared with the previous generation of 5nm process, and the energy efficiency of is 15% higher than that of .
In order to get Apple's 3nm order, TSMC has given great discounts in terms of price. TSMC's OEM price generally rose by 15%-20%, but Apple only rose by 2%-3%.
When TSMC found Apple with the most advanced 3nm N3 technology with full confidence, I hoped to give some advice. However, after Apple finished testing, it directly cut off the N3 order.
Why is the N3 process that claims to be the fastest clock frequency , the highest performance, ultra-high energy efficiency, the lowest power consumption, and the highest density rejected by Apple?
The reason is that is too expensive and the performance upgrade is insufficient .
Of course, Apple still comforted TSMC. You see, my iPhone 11, 12, 13, and 14 processors are all manufactured by you, and I still trust you very much. But I also feel pressured! This is not the case that the iPhone 14 can no longer be sold.
Finally, Apple also promised that the next generation of will use TSMC's 3nm N3E technology.
In fact, Apple has calculated it a long time ago. It is completely fine to use the A17 chip with 5nm process for another year. It is enough to defeat Android. The most important thing is to save costs and increase the profit of .
In the second half of 2023, TSMC's 3nm N3E (enhanced version) process was fully mature and its performance was stronger, and it just happened to catch up with the new product launch conference.
Apple's move completely made TSMC panic. Once Apple transfers orders, the impact on TSMC will be huge. Therefore, in order to protect this big customer, TSMC will do its best.
This is also why other employees encourage vacations, while 3nm-related personnel not only do not take vacations, but also focus on the clockwork.
to the end
chip market is unpredictable, and even the leader TSMC feels the pressure. The utilization rate of capacity above 7nm has declined, and 3nm has not yet been mass-produced. In this embarrassing period, encouraging employees to take vacations and reducing costs is also a countermeasure!
It may be the first time that TSMC has felt chilled! And this chill will continue!
I am a technology name, welcome to discuss together!
