Since the United States sanctioned Huawei, TSMC has followed suit by imposing sanctions on Chinese semiconductor companies and canceling support for Huawei's chip production. However, Huawei was not knocked down, but independently developed high-end chips, achieving 100% localization of China's chip industry. This is undoubtedly a huge blow to TSMC, because they will completely lose orders from the mainland. In addition, Qualcomm has also begun to reduce production, which puts TSMC in an existential dilemma.
Faced with the double blow of the global chip surplus and the loss of mainland orders, TSMC is facing a huge problem. In order to compete for orders, TSMC's top management decided to significantly reduce the price of 7nm chips, and the price reduction is expected to be around 5% to 10%. Although the price reduction is not large for consumers, for TSMC, this is the first time that such a large-scale price reduction has occurred. However, in order to survive, TSMC had to cheekily cut prices to grab orders.
Zhang Zhongmou said at the TSMC internal sports meeting that if TSMC has no orders in the future, all employees will face unemployment within three years. In the case of losing orders from the mainland, TSMC's global factories began to reduce prices. Domestic experts even predict that TSMC's Nanjing plant may be liquidated. It can be said that in the past, TSMC was eating the mainland's food, but smashed the mainland's bowl. They not only sanctioned semiconductor companies in the mainland, but also restricted the production of many core components, trying to hit the mainland's chip industry, and maintaining their own demand by purchasing TSMC chips. However, what I didn't expect was that now TSMC has to lick its face and beg the mainland and seek chip orders everywhere. However, whether it is 7nm, 14nm or 28nm chips, the mainland already has its own core technology, and the demand for TSMC is no longer so urgent.
TSMC, as the world's leading chip foundry, has long monopolized most of the chip production orders. However, with the U.S. sanctions on Huawei and the rapid development of China's chip industry, TSMC is facing huge challenges. The loss of chip orders from the mainland, as well as Huawei's independent research and development of high-end chips, made TSMC have to reduce the ** of 7nm chips to compete for orders. In the case of global chip oversupply and fierce market competition, TSMC is facing huge pressure to survive. However, their previous sanctions and restrictions on the mainland, as well as their high dependence on chip technology, have led to them now not finding a better way out. At the same time, the mainland's chip industry is rising rapidly, with the core technology of independent innovation. For TSMC, this is undoubtedly a warning that they need to re-examine their development strategy and find new breakthroughs in order to continue to gain a foothold in the fiercely competitive market.
Finally, we must also realize that technological innovation and independent research and development are the key to the sustainable development of the chip industry. Only by continuously improving our own technical strength and continuously promoting scientific and technological innovation can we maintain a competitive advantage in the global market.