On July 19, Japanese media reported that as advanced chip technology is becoming the focus of national security issues, the Japanese government hopes to invite global advanced chip factories such as TSMC to build factories in Japan to boost Japan's domestic chip industry. The Japanese government plans to provide hundreds of billions of yen to overseas chip manufacturers involved in the project in the coming years. At the same time, Japanese media also mentioned that the Japanese government will introduce TSMC's advanced wafer fabs as one of the key directions for future technology cultivation. TSMC responded to this, saying that there are currently no relevant plans, but it is not ruled out that relevant arrangements will appear in the future.
Since TSMC announced in May this year that it would invest $12 billion to invest in the construction of factories in the United States, it was once again reported that the Japanese government also favored TSMC and attracted high attention from the industry. However, this is actually not the first time Japan has invited TSMC to build a factory in Japan. Japanese media have reported on many occasions that Japan's official intention to invite TSMC to set up a factory in Japan in the past year. So why did Japan invite TSMC? Why is wafer foundry so popular nowadays?
Why does Japan need TSMC
2 Japan's semiconductor industry has always been in the leading position in the world, especially in the field of semiconductor materials , which is almost "unrivaled". SEMI data show that Japanese companies account for about 52% of the global semiconductor materials market, while North America and Europe account for about 15% respectively. Japanese semiconductors occupy a high share of important materials such as silicon wafer , photoresist , bonded leads, molded resins and lead frames. Japan's Shingotsu, SUMCO ( Mitsubishi Sumitomo Co., Ltd.), Sumitomo Bakelite, Hitachi Chemistry, Kyocera Chemistry, etc. are all global semiconductor material giants.
In addition, in the semiconductor equipment market, Japan is also second only to the United States. The number of Japanese manufacturers in the top 15 semiconductor equipment manufacturers in the world in 2019, ranked by sales by VLSI Research, a US semiconductor industry survey company, has reached eight, accounting for more than half. Among them, Japanese companies Tokyo Electronics, Edwan, Deans and Hitachi Hi-Tech are all in the top ten. Moreover, Japan is one of the few countries in the world that has the ability to manufacture lithography machine . Nikon and Canon are the lithography machine giants second only to ASML.
Overall, Japan has a very strong overall strength in the entire semiconductor industry chain. However, in recent days, the competitiveness of Japan's semiconductor manufacturing industry has declined. Zhou Peng, deputy dean of the School of Microelectronics of Fudan University, told reporters that according to the SEMI report, the sales of semiconductor manufacturing equipment in Japan in 2019 fell by 34% compared with 2018. In addition, since 2009, there have been 100 wafer fabs that have been closed or rebuilt worldwide, of which 36 are in Japan, which is more than any other country. And this seems to be the main reason why Japan urgently needs TSMC to "help".
Japan began to "embrace" OEM?
Why does this happen in the Japanese semiconductor manufacturing industry? Industry experts generally believe that this is caused by Japan's semiconductor sticking to the inherent IDM model.
In the traditional semiconductor operation model, there are three main modes, namely IDM mode, Fabless mode and Foundry mode. In the IDM model, enterprises integrate multiple industrial chain links such as chip design, chip manufacturing, chip packaging, and testing, which is also the model that Japan's semiconductor industry has long adhered to. In the Fabless model, the company is only responsible for the circuit design and sales of chips, and outsourcing production, testing, packaging and other links. In the Foundry model, the company is only responsible for one of the manufacturing, packaging or testing links, and is not responsible for chip design and seeks foundry.
"In the 1980s, Japanese semiconductor companies seized the demand opportunity of DRAM and surpassed the United States to become the world's largest semiconductor producer. However, after the DRAM storage market was gradually eroded by South Korea in the 1990s, Japanese semiconductor companies made conservative decisions and still adhered to the inherent IDM model, without changing to the fax or light fab model. This also caused Japanese semiconductor companies to be under great cost pressure and bear heavy loads when the market was squeezed, which eventually crushed many Japanese fabs.In 2019, including Japanese manufacturer Panasonic Electric, it announced that it would sell its loss-making semiconductor business to Taiwan's New Tang Technology, and will also spin off three Japanese chip manufacturing plants under TowerJazz Panasonic Semiconductor. The Japanese semiconductor industry seems to gradually realize the inapplicability of sticking to the IDM model, so it has begun to actively seek external cooperation. This is the main reason why Japan actively invites TSMC to "build factories in Japan". "Zhou Peng told reporters. An expert in the semiconductor industry said that with the development of Moore's Law, chips have gradually reached the physical limit in process, and are becoming increasingly difficult to make breakthroughs in technology, and R&D expenses are becoming increasingly high, forcing many semiconductor companies to decide to withdraw from the advanced process manufacturing market in wafer manufacturing, thus making semiconductor manufacturing companies that can continue to track Moore's Law more and more limited. At present, TSMC and Samsung occupy almost most of the advanced process foundry market.
"Now TSMC has an almost unshakable position in wafer manufacturing. TSMC's share of the global wafer foundry market last year was as high as 52%, with an annual total production capacity of more than 12 million pieces of about 12-inch wafers, which means that more than half of the world's semiconductor chips are from TSMC. TSMC's achievements today are mainly due to three points: First of all, TSMC has always emphasized that it is always neutral while doing OEM, and will not compete with customers for orders, and can truly put the interests of customers first. Therefore, TSMC has been able to establish good relationships with customers for a long time, making the number of customer groups (Apple, Xilinx, Nvidia, etc.) that have no conflicts of interest with TSMC is very large. They can work with TSMC to improve process yields and reduce costs to speed up mass production. Secondly, while doing wafer foundry, TSMC also masters advanced packaging technology and does a very good job in integration. Finally, TSMC has continued to invest strongly, with an investment of about US$10 billion a year, and almost no foundry can match it. It is not easy to do these things. This is also the reason why more and more semiconductor companies have stepped out of the traditional IDM model and began to seek cooperation with TSMC in recent years, and Japanese semiconductor companies are no exception. "A specialist in the semiconductor industry told reporters. The
Fablite model quietly came to
, which has long adhered to the IDM model, declined its competitiveness in Japan's semiconductor manufacturing industry. This does not mean that the IDM model is unpopular, but rather indicates that IDM is not suitable for all semiconductor companies. At the same time, in order to adapt to the development of the industry and the market, the current three traditional models have also undergone some changes and new models have emerged.
"IDM was a model adopted by most integrated circuit companies in the early days. However, as the market competition becomes more and more intense, only a very small number of companies can maintain this model. This is because the IDM model will put a lot of pressure on enterprises and is not suitable for small and medium-sized semiconductor companies. However, for some larger semiconductor companies, the IDM model can help companies fully explore their technological potential and increase brand advantages. "A specialist in a semiconductor industry told reporters. With the continuous advancement of advanced processes, the cost and risks of wafer production line investment have increased significantly, causing many semiconductor companies to start to adjust their development models as market changes. Therefore, Zhou Peng believes that the light manufacturing Fablite model evolved from IDM has become the first choice for many semiconductor companies.
"Fablite refers to the original IDM companies splitting part of their semiconductor manufacturing business, handing it over to a third-party Foundry for foundry, and retaining part of their manufacturing business. This is also a strategy for IDM companies to lighten their assets by reducing fixed asset investment. There is still room for change in the development of the global semiconductor industry in the future, but due to the dual pressure of huge cost and market investment risks, most semiconductor manufacturers currently have to withdraw from the competition in the advanced process stage in wafer foundry, and the demand of Foundry manufacturers has also increased sharply. With the deepening of process research and development, the cooperation between the two parties will be closer. As a leader in the Foundry manufacturer industry, TSMC has sufficient process research and development advantages. In the situation where advanced processes determine market resources, the situation of "the biggest Evergrande" has become more obvious.In short, changes in the market environment determine the survival model of semiconductor manufacturers, and also influence the overall development trend of the semiconductor industry in the future. "Zhou Peng said.
