Posted on 06/21/2021 2:10:16 PM PDT by blam
There is no doubt about it: Taiwan Semiconductor has emerged as the world’s most important chipmaker.
And now, in the midst of a global semiconductor shortage, it is becoming clear exactly how important the company’s dominance has been.
Not only has TSMC made headlines for proposing to expand production into the United States, as we have documented numerous times, but now it is making headlines for how it has become the center of the semiconductor world – and how that can leave the world vulnerable.
TSMC’s chips are in “billion of products”, including iPhones, computers and cars, the Wall Street Journal writes in a new profile of the company. The company has slowly become the world’s 11th most valuable company, with a market cap of about $550 billion. The company reported $17.6 billion in profits last year on revenues of about $45.5 billion. TSMC makes “around 92% of the world’s most sophisticated chips,” the report says.
This has led to the U.S., Europe and China looking to cut their reliance on chips out of the Taiwanese company. But that’s a tough task given its contribution globally. The U.S., for example, only accounts for 12% of the world’s chip manufacturing, down from 37% in 1990.
Analysts aren’t confident of there being a more diversified semiconductor supply chain “anytime soon”. They attribute this to TSMC’s “hard driving culture” and “deep pockets”. The industry has become so complex that once one producer falls behind, it becomes tough to catch up.
And it’s going to be even tougher for competition to catch up if TSMC starts to expand in the U.S. After years of investing in R&D since the company’s founding in 1987, TSMC finally “broke through” when it started to mass produce chips for mobile phones for Apple:
“A pivotal moment came in 2013, when TSMC began work on mass-producing mobile phone chips for Apple, now its biggest customer. Before that, Samsung—which had its own smartphones—had been the exclusive microprocessor supplier for iPhones.
To fulfill Apple’s first order, TSMC spent $9 billion, with 6,000 people working around the clock to build a fab in Taiwan in a record 11 months. TSMC is now the exclusive supplier for the main processors in iPhones.”
Less than a decade later, and barely 30 years after its founding, TSMC is the dominant force in the global semiconductor world.
At the beginning of May, we noted that Taiwan Semiconductor was considering bolstering its production in the U.S., and that President Biden’s Commerce Secretary was urging more domestic production. Now, it looks like TSMC could be within striking distance of a serious U.S. expansion.
We also reported last month that TSMC is “weighing plans to pump tens of billions of dollars more into cutting-edge chip factories in the U.S. state of Arizona than it had previously disclosed”, a Reuters exclusive revealed.
The company had already said it was going to invest $10 billion to $12 billion in Arizona. Now, the company is mulling a more advanced 3 nanometer plant that could cost between $23 billion and $25 billion, sources said. The changes would come over the next 10 to 15 years, as the company builds out its Phoenix campus, the report notes.
The move would put TSMC in direct competition with Intel and Samsung for subsidies from the U.S. government. President Joe Biden has proposed $50 billion in funding for domestic chip manufacturing – a proposal the Senate could act on as soon as this week. Intel has also committed to two new fabs in Arizona and Samsung is planning a $17 billion factory in Austin, Texas.
TSMC CEO C.C. Wei said on a call last month: “But in fact, we have acquired a large piece of land in Arizona to provide flexibility. So further expansion is possible, but we will ramp up to Phase 1 first, then based on the operation efficiency and cost economics and also the customers’ demand, to decide what the next steps we are going to do.”
TSMC has also said that talks in Europe regarding expansion have gone “very poorly”, increasing the likelihood that the chip giant will be focused more on the U.S.
There are no plans for a plant in Europe, a TSMC spokesperson said.
It has been said this is what the CCP is really after in Taiwan.
Their decision to expand to Arizona was made in 2019 during the Trump administration — Joe and Hoe had nothing to do with it. I doubled my money on their stock in one year. Should have kept the stock but anytime I double in a year or less I cash out.
And because TSMC is PHYSICALLY in Taiwan, if China ever invades that island the rest of the world that depends on integrated circuits in every device is SCREWED!
I think that and control of the South China Sea and some sort of historical imperative like the French wanting to regain Alsace Lorraine leading up to WWI. But yeah.
“It has been said this is what the CCP is really after in Taiwan.”
Yep. And, I’d make destroying their fabs, infrastructure and intellectual property a top priority if it appears Taiwan will fall to China.
TSMC might be expanding the project’s scope
The dark satanic rumour mill has manufactured a hell on earth yarn that TSMC’s plans to build a 5nm process node in Arizona might be considerably more ambitious than thought.
For those who came in late, TSMC said it will invest $12 billion building an Arizona fab over the course of the next few years, with the facility set to produce semiconductors on the 5nm process node in 2024.
Now, job applications for the seventeen posts open for TSMC’s Arizona hint that perhaps something larger might be afoot, particularly now that the outfit has hired an Intel human resources and recruiting veteran.
Sources have been muttering that there was more to the project than TSMC was letting on since it was announced in February.
A cursory look at the facility’s job openings reveals that seventeen positions are open for applications right now. Opening them up redirects us to their Linkedin pages, where data gathered from the job application site reveals that for all engineering positions, a total of 13,166 applications have been submitted to the platform.
This means that the project could mean heavy production in the land of the fee. Possibly thanks to shedloads of sweeteners that have been thrown at the company by the current government.
I met him in 1995.
My friend rolled a stop sign and almost hit him in the parking lot. He would have been infamous for that. He only found out later who he was.
Global Foundries and SMIC are ramping up also for our designs for Apple. TSMC is full.
The Amazing Story of Morris Chang
In 1983, a 52-year-old senior executive at Texas Instruments was passed over for the company's top job.
He would go on to found and build the most strategically important company in the world.
“Their decision to expand to Arizona was made in 2019 during the Trump administration — Joe and Hoe had nothing to do with it. I doubled my money on their stock in one year. Should have kept the stock but anytime I double in a year or less I cash out.”
It’s oddly lower than it should be.
You can always cash back in.
The company reported $17.6 billion in profits last year on revenues of about $45.5 billion.
Intel: Intel Corp reported revenue of 77.9B for FY 2020, an increase of 24.07% compared to FY 2017. Net income grew 117.68% to 20.9B.
https://www.bing.com/search?q=intel+financials&form=QBLH&sp=-1&ghc=1&pq=intel+financials&sc=8-16&qs=n&sk=&cvid=0EB1472C3ED64F3D808A7860F758FB70
I bought Intel stock many years ago and believe their revenues are around 77.87 billion USD (2020) and market cap of 225.60B USD, nothing to sneeze at.
I might but right now I am cashing in on real estate and buying more.
Inflation is coming.
As far as AZ — Intel is adding to its already big foot print in the Phoenix valley with another 20 billion announced in south valley. I hope LS is buying land in his part of the valley.
Cool!
I was making chips at start-up National Semiconductor when Intel started-up on Middlefield road, just down the way in Mountain View.
(those were the days!)
“$17.6 billion in profits last year on revenues of about $45.5 billion.”
Wow. Making chips is hard. You need to have hundreds of the best minds in the world and billions of dollars in capital investments to compete, but now that TSMC has it figured out they can print money.
Dead on portraits of your Dad's engineering types - very literal in everything that they did. And super nice to boot.
Since I worked on the DLP chips (albeit in marketing them) they really opened up.
Of course, there are few things people like to talk about more than their accomplishments, which these had in droves.
there some things that should be made in the US by law.
even it the plants are taxpayer funded
all Crit-1 parts for the military/nasa/communications/electrical/power production/oil&gas so we can never be held hostage to foreign suppliers, like oil was
Criticality 1 Loss of life or vehicle if the component fails.
Criticality 2 Loss of mission if the component fails.
Criticality 3 Loss is a issue not a show stopper
Criticality 1R Redundant components, the failure of both could cause loss of life or vehicle.
Criticality 2R Redundant components, the failure of both could cause loss of mission
I'll say:
TSMC Claims Breakthrough On 1NM Chip Production
TSMC in collaboration with the National Taiwan University (NTU) and the Massachusetts Institute of Technology (MIT) have made a significant breakthrough in the development of 1-nanometer chips. The joint announcement comes after IBM earlier this month published news of their 2-nanometer chip development. The researchers found that the use of semi-metal bismuth (Bi) as contact electrodes for the 2D matrix can greatly reduce resistance and increase current. This discovery was first made by the MIT team before then being further refined by TSMC and NTU which will increase energy efficiency and performance in future processors. The 1-nanometer node won't be deployed for several years with TSMC planning to start 3-nanometer production in H2 2022.
I've heard that Intel is still struggling with their 7 NM process.
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