As analysts at IC Insights predict, TSMC, the world's largest semiconductor contract manufacturer, will see revenue grow 32% in the second half of the year compared to the same period last year. Given that the IC market as a whole is expected to grow by only 10%, it turns out that TSMC's business will grow more than three times faster than the market as a whole. The reason for such an impressive success is simple - it is the 7nm process technology, the popularity of which has surpassed all expectations.
The demand for 7nm technology offered by TSMC is not a secret. We have already said that due to the high load on production lines, the timing of orders for the production of 7-nm chips from two to six months. Moreover, as it became known, TSMC offers its partners to buy quotas for 2020 now, which also indicates that the demand for 7nm technology exceeds the supply. Against this backdrop, it seems likely that TSMC's customers will be forced to fight for the contract manufacturer's production capacity one way or another. This could eventually lead to many of the 7nm chips being in short supply next year.
IC Insights expects TSMC's 7nm revenue to reach $8,9 billion this year, accounting for 26% of the company's total revenue. Moreover, by the end of the year, the share of revenue from 7nm products will be even higher - it is projected at 33%. Analysts believe that TSMC will receive a significant part of these revenues through the release of mobile processors of the latest generations for Apple and Huawei. However, TSMC's 7nm process is also used by other customers who are critical of the high performance and energy efficiency of their chips. For example, Qualcomm and AMD also appear among TSMC's clients, and NVIDIA is likely to join this list soon.
However, the success of TSMC's 7nm process may pale in comparison to what happens when this semiconductor forge introduces a 5nm process. IC Insights points out that leading chipmakers are starting to switch to thinner norms faster and faster. This is easy to verify with numbers. When TSMC introduced the 40-45nm standard, it took a full two years for the share of chips manufactured using them to reach a 20% level in total shipments. The next, 28nm, reached the same level of relative profitability in just five quarters, and 7nm chips won a 20 percent share of TSMC's products in just three quarters after the introduction of this process technology.
Also in its announcement, the analyst firm confirms that TSMC does indeed have some problems meeting the demand for 7nm products, which ultimately leads to underdeliveries and increased lead times. In response, the company plans to allocate additional funds to expand production capacity with modern technical processes and will try not to bring the situation to an acute shortage. However, in any case, it will not be TSMC that will suffer, but its customers. A semiconductor manufacturer will not be left without a profit under any circumstances, especially if we take into account its dominant position in the market. According to the same IC Insights report, TSMC's market share in the contract manufacturing market for advanced manufacturing processes (sub-40nm) is seven times greater than the combined share of GlobalFoundries, UMC and SMIC, making it a virtual monopoly.
Source: 3dnews.ru