SMIC is facing a dilemma, TSMC announced that no one wants 7nm chips, and foreign media analyze the reasons
TSMC has always been the absolute king in the field of chip foundry. Taking 5nm chips as an example, from Huawei's Kirin 9000 chip, to Qualcomm's Snapdragon 888 chip, to Apple's A13 chip, almost all the high-end mobile phone chips that can be seen on the market are made by TSMC.
In addition to the above data, Huawei, Qualcomm, and Apple's 7nm, 10nm, 14nm, and 22nm chips are basically made by TSMC.
Why is TSMC so strong that it can OEM a variety of process chips?There are three reasons for this.
First of all, TSMC has a specialization in the technology industry, focusing on the chip foundry industry, unlike Samsung, which is involved in many industries, and finally because of TSMC's voltage system, it has been unable to turn over for many years.
Second, TSMC has the world's largest EUV lithography machine, and according to incomplete statistics, ASML sells more than half of the EUV lithography machines purchased by TSMC.
Third, TSMC has the most advanced integrated circuit processing technology. According to reports, Samsung and TSMC occupy a dominant position in 3nm integrated circuit processing technology, but because the yield rate and production cost of Samsung's 3nm integrated circuit manufacturing process are not as good as TSMC's 3nm integrated circuit manufacturing process, Apple, Qualcomm, Intel, Nvidia and other companies have ordered 3nm integrated circuits from TSMC.
Specialization, a large number of EUV lithography machines, and the most advanced chip processing technology - with these three advantages, TSMC has become a benchmark in the chip foundry industry.
However, some time ago, TSMC's life was not easy, and it was surprising that even foreign media sighed: no one wants 7nm chips.
Some time ago, Taiwan** reported that TSMC finally couldn't bear it, and the price of mature processes was reduced, with a price reduction of 2% and 5%.
This news has not yet been heated, and TSMC has reported that in addition to the mature process, the price of the more advanced 7nm process will also be reduced, with a price reduction of 5%-10%.
From the price reduction of mature processes to the price reduction of 7nm processes, this indicates that TSMC's orders for two processes will be significantly reduced. Truth be told, the mature process and the 7nm process are what no one wants.
Why is this happening?There are three reasons for this.
The first is the weak demand in the global wafer industry, with TSMC accounting for more than 50% of the global wafer order share. Due to weak wafer demand, TSMC is much more affected by fluctuations than other foundries.
Second, mainland wafer companies are reducing the number of mature process wafer orders to TSMC and instead deliver mature process wafer orders to SMIC. After all, SMIC's 28nm mature chip processing capacity is enough to meet the needs of the mainland market, and it is cheap, perhaps SMIC did not expect to buy from TSMC one day"Receiving"Mobile phone orders.
Finally, Apple, Qualcomm, MediaTek's chip orders are concentrated in 5nm, 4nm, and 3nm processes, and TSMC's orders for these three processes are sufficient, while TSMC's orders for 7nm process and mature process have decreased.
In the third quarter of 2023, TSMC's revenue fell by 10% and profit fell by 25%. Obviously, TSMC is not having an easy time. Today, TSMC has reduced prices on mature processes and 7nm processes, indicating that TSMC has begun to save itself. However, as foreign media said: no one wants 7nm chips, is it really useful to push for price reduction?