The severe impact of the epidemic on the global supply chain has made various countries pay more and more attention to local supply chains and plans to build an independent, complete and secure industrial chain in their own country. This trend means that "supply chain anti-globalization" will be more obvious.
TSMC went to the United States to build a factory, which is a concrete manifestation in the context of anti-globalization of the supply chain. On May 15, TSMC officially announced that it will build and operate a 5nm advanced semiconductor wafer production factory in Arizona in the United States, with a monthly production capacity of 20,000 semiconductor wafers, directly creating more than 1,600 high-tech professional positions, and creating thousands of indirect positions in the semiconductor ecosystem.
Source: TSMC official website
As early as January 15, 2020, the Nikkei Shimbun quoted sources as saying that the US authorities are strengthening pressure on TSMC and requiring TSMC to make a decision before the US election whether to set up a factory in the United States.
Many people have different views on TSMC's going to the United States to build a factory. The author believes that this matter is understandable. For TSMC, the benefits outweigh the disadvantages. There is no need to worry too much for China. Next, let’s give a general explanation from TSMC’s US-funded identity, market share, etc.
TSMC's unique identity
TSMC was born in 1987. Its founder Zhang Zhongmou was born in the mainland and completed primary and secondary schools in mainland China, but undergraduate, master and doctoral students are all studying in the United States. He obtained his American nationality very early, and his current nationality is also from the United States. In the early days, TSMC was dominated by official capital in Taiwan and Philips and other companies. Later, the equity was dispersed. In the end, TSMC's top 10 institutional shareholders were mainly US-based, with foreign capital holding more than 80%.
According to the information, TSMC is currently mainly controlled by European and American consortiums. The top six shareholders are: Citi custodian TSMC depositary receipt account holds 20.78%; Executive Yuan National Development Fund Management Association holds 6.38%; JPMorgan Chase custodian Saudi Arabia Central Bank investment account holds 3.1%; Citi (Taiwan) Commercial Bank is entrusted to custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian custodian
and the top seven to top ten shareholders are: Cathay Life Insurance Insurance Co., Ltd. holds 1.16% of the shares; AMME JPMorgan Chase Bank Taipei Branch is entrusted to stichting depositary APG emerging market stock mutual fund investment account holds 1.07% of the shares; Standard Chartered Bank Vangard Emerging Markets Stock Index Fund Special Account holds 0.95% of the shares; Standard Chartered isareMSCI Emerging Markets Index Fund Investment Account holds 0.94% of the shares.
In terms of market and technology, TSMC has bundled the United States
Huawei HiSilicon, Qualcomm , Apple, etc. are all major customers of TSMC. From the perspective of TSMC's revenue composition, the United States accounts for the majority, with the United States accounting for 59%, China accounting for only 19%, and Taiwan accounting for 7%. So it will be better understood from the revenue ratio. TSMC said in its official announcement that this American factory not only allows us to better support our customers, but also partners, which also provides us with more opportunities to attract global talents.
not only the market, but also in terms of technology, TSMC and the United States are also closely tied. Upstream devices such as LAM, Applied, ASML, etc., and downstream major customers such as Apple, AMD, Qualcomm, etc., are mostly in the United States, except Huawei, and are also closely tied to the United States.
The factory in Arizona is TSMC's second production base in the United States. In the United States, TSMC currently has a fab in Camas, Washington, and design centers in Austin, Texas and san Jose, California.
Arizona is the second largest talent base after Portland, and chip manufacturing is one of the best places, which is likely to be the reason why TSMC chose. In terms of talent costs, competent leaders are needed, and the United States is expected to have great benefits in terms of land, water and electricity costs.
Is TSMC too worried about building a factory in the United States? Does
have any impact on Huawei? Huawei's production in Taiwan will not stop. TSMC's main force is still in Taiwan. Building factories in the United States is more about comprehensive benefits and international risks. From the perspective of TSMC's own financial situation, we can also see the reason.
Semiconductor analyst Lu Xingzhi once wrote an article against TSMC's construction in the United States and mentioned very important points. The United States does not have a downstream semiconductor packaging, testing and assembly industry chain, and the United States does not have a difference in the benefits and work efficiency of the middle and downstream community. For TSMC, China is also a major market. So there is no need to worry too much.
Not only that, SMIC will also grow at an astonishing speed in recent years. Although the first season is the traditional off-season for the electronics industry, SMIC, the largest wafer foundry in the mainland, achieved a perfect counterattack in the first quarter.
According to the Q1 quarterly financial report released by SMIC, revenue in the first quarter reached US$905 million, a year-on-year increase of 35.3%, a month-on-month increase of 7.8%, and a gross profit margin of US$234 million, a year-on-year increase of 91.4%, and a month-on-month increase of 17.1%, and a month-on-month increase of 25.8%, an increase of 7.6 percentage points, setting the best record.
SMIC also won Huawei Kirin 710A. In addition, executives of many semiconductor industry chain companies have SMIC. According to statistics from Caixin Securities, the second largest shareholder of Changdian Technology is SMIC, and many senior executives of the company have worked at SMIC; the current executives of Northern Huachuang Wu Hanming and Liu Yue have served as executives of SMIC; at the end of April this year, the former CEO of SMIC 2 Qiu Ciyun became the president of Shanghai Silicon Industry Company.
TSMC will be able to produce 5nm wafers in large quantities next year, and the United States will only produce 20,000 pieces per month in 2024. At that time, 5nm is no longer the most advanced process technology. As the leading leader in OEM, TSMC occupies the most favorable position with its strong strength to benefit itself.
Although TSMC has announced a US$12 billion investment quota, construction will only start next year and production will only be officially launched in 2024. The future is long, and subsequent changes are unknown.
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