When it comes to companies that make customer chips, the company you probably think of first is TSMC. After all, the Taiwan-based firm is the world’s largest contract foundry, producing chips for companies like Apple, Huawei (at least for the time being), Qualcomm, MediaTek, and others. The second largest independent foundry is owned by Samsung and both are the only chipmakers in the world to produce chips this year using the most powerful and energy efficient 5nm process node.
Samsung’s global foundry market share of 18.8% in the second quarter is overwhelmed by 51% of TSMC
TSMC owned 51% of the world foundry market during the second quarter
Even when the COVID-19 pandemic could have presented a challenge to TSMC, an executive at a Japanese company that is a supplier to the foundry said that “demand for TSMC has not decreased and more personnel are needed.” The $ 40 billion Tainan factory that TSMC opened in 2018 is producing Apple A14 Bionic 5nm chipsets designed by Apple, but produced in Taiwan. If everything goes as planned, the 5G 2020 iPhone 12 family will be the first smartphone in the world to be powered by a 5nm chipset. The new process node will allow each chip to contain 15 billion transistors. Compare that to the current 7nm Bionic A13 chips produced by TSMC that will have 8.5 billion transistors inside. The more transistors within a chip, the more powerful and efficient it is.
Despite having contributed 15% of TSMC’s revenue last year, Huawei’s impending removal from TSMC’s customer list has not forced the foundry to make any changes in spending. Last month, at the company’s shareholders meeting, President Mark Liu said there would be no change to the capital spending plan from $ 15 billion to $ 16 billion for the year ending December 2020. The A company can handle such problems due to the way it manages its cash flow. A financial industry source calls a TSMC cash flow chart “a work of art. It is completely different from the uneven charts of Japanese electrical machinery manufacturers.” The source says: “Painting a textbook-like cash flow graph is rare in the semiconductor industry, which is prone to fluctuations.”
Despite the fact that Huawei will leave large shoes to fill in TSMC, where it is the second largest customer after Apple, TSMC in Tainan is at full speed, where the 3nm chips could be deployed as early as 2022, thus maintaining the observation made by Intel co-founder Gordon Moore I live at the moment. In the mid-1960s, Moore’s Law required that the density of the transistor in integrated circuits double every year. This was eventually changed every two years and while not perfect, check out the latest progressions: 7nm chips like the A13 Bionic and the Snapdragon 865 mobile platform shoehorn roughly 96.5 million transistors in every square mm. The 5nm semiconductors that will come out during the second half of the year will squeeze 171.3 million transistors into every square mm, and the 3nm process node will pack 300 million transistors into every square mm.
During the second quarter of this year, TSMC had 51% of the world foundry market. Samsung, including chips made for its own products, was next with 18.8%. Global Foundries owned a 7.4% share of the global foundry pie from April to June and UMC was next with a 7.3% stake. SMIC, the largest foundry in China, captured 4.8% of the market during the second quarter.
