Introduction: As the world's major chip foundry, TSMC has enjoyed a monopoly position for a long time. However, with the U.S. sanctions on Huawei and Huawei's independent research and development of high-end chips, TSMC has not only lost orders from the Chinese market, but also faced the challenge of a global chip surplus. In order to survive, TSMC had to significantly reduce the price of 7nm chips. This move is seen as a move without regrets, and it also highlights TSMC's predicament.
Huawei, as TSMC's second largest customer, had to stop providing chip production services to Huawei due to US sanctions. However, Huawei did not be helpless because of this, but successfully launched high-end chips through independent research and development, so that TSMC lost orders for Huawei mobile phones. This means that Huawei no longer relies on TSMC and has achieved a 100% localized chip industry.
Huawei's independent research and development of high-end chips has consolidated China's position in the chip field, which is undoubtedly a bolt from the blue for TSMC. Previously, Zhang Zhongmou had arrogantly said that he could make the mainland's chips 20 years behind, but Huawei's success shattered TSMC's illusions. TSMC not only lost orders from Huawei, but also faced greater competitive pressure.
In addition to losing orders from Huawei, TSMC is also facing the challenge of a global chip surplus. With the increase in production and capacity expansion of major chip manufacturers around the world, the chips on the market have exceeded the demand. In this case, TSMC's living space has further shrunk.
Due to the fierce competition in the global chip market, TSMC urgently needs to find new orders**. However, Huawei's successful independent R&D has made the mainland market no longer dependent on TSMC, and TSMC's orders in the mainland will gradually decrease. In contrast to the monopoly position it has enjoyed for the past few decades, TSMC now has to face the dilemma of losing orders. In order to survive in the fierce competition, TSMC has taken measures to significantly reduce prices.
In order to grab more orders, TSMC began to significantly reduce the price of 7nm chips. Although the amount of price reduction is not very large for us, it is almost an unprecedented price reduction measure for TSMC. In order to survive, TSMC had to cheekily lower ** in order to be able to snatch more orders.
The price reduction measure is seen as a no-regret move, because for TSMC, the loss of orders will directly affect the company's survival and development. Although the price reduction will have a certain negative impact on the company's profits, compared to losing more orders, TSMC has to choose to reduce the price in exchange for survival space.
In addition to Huawei's successful independent R&D and the challenge of the global chip surplus, TSMC is also facing many other problems. For example, large customers such as Qualcomm have also begun to reduce orders, which has further affected TSMC's performance. The predicament faced by TSMC can be said to be multiple, and it will be a war without gunpowder.
However, even in the face of difficulties, TSMC did not give up and actively sought solutions. In addition to significant price cuts, TSMC is also seeking to accelerate technological progress and improve the level of chip manufacturing processes to remain competitive. In addition, TSMC is also actively looking for orders from other markets to reduce its dependence on the mainland market.
Looking ahead, TSMC needs to continue to seek breakthroughs in the global chip market. It is foreseeable that due to the growth of global chip demand and the development of emerging technologies, the chip market will continue to maintain a certain amount of room for growth. If TSMC can make breakthroughs in technological innovation, product differentiation and market expansion, it is still possible to occupy a place in the global chip market.
Summary: TSMC, as the world's major chip foundry, has recently faced huge challenges. The loss of Huawei's orders and the global chip surplus have forced TSMC to take price reduction measures in a big sale to grab more orders. However, in the face of difficulties, TSMC is also actively seeking solutions to accelerate technological progress and expand into other markets. Looking ahead, TSMC will need to continue its efforts in the global chip market to remain competitive and achieve sustainable development.