Tongtong has reversed, and TSMC and Samsung have successively announced that China will no longer buy

Tech 2023-05-23 05:39:59 Source: Network

Hard to say - Zhang Yu.320

Hard to say - Zhang Yu.320.mp34:12

From PinChat Technology

The semiconductor industry is the core and cornerstone of today's technology field, and wafer foundry is an important link in the chip industry chain. In the wafer foundry market, TSMC and Samsung have been competing for market share and technological advantages. However, recently, these two companies have announced a slowdown or reduction in production capacity, sparking attention and speculation from the outside world. Some American media even assert that China is not buying anymore! What the hell is going on here?

Samsung and TSMC are two leading companies in the global OEM industry, and they have reaped huge profits in the digital wave. Especially in the face of global wafer supply shortages, wafer factories represented by them have made a fortune, with TSMC employees even receiving year-end bonuses of up to 280000 yuan per person.

However, as the trend of chip shortage rapidly shifts towards overcapacity, life for TSMC and Samsung is also difficult. In recent years, one of the biggest changes for Samsung has been the significant turnover of its senior management. In 2021, in order to revive Samsung Group, after Li Zairong came out of prison, he carried out a drastic personnel overhaul, which even many senior executives were not spared. Among them, Samsung's supervisory departments in the chip, mobile phone, and electronics departments have all been removed, while the mobile phone and electronics departments have merged into one, indicating that the focus of Samsung Group's business has shifted to chips.

In terms of process technology, Samsung's most advanced 3nm process is significantly inferior to TSMC, especially in terms of stability and yield. Samsung plans to launch the 4nm process in 2022 and the 3nm process in 2023, and claims that its chips in the 3nm process will be smaller, faster, and more energy-efficient than those in the 5nm process. But according to industry insiders, Samsung's 4nm process has a yield of only 60%, while TSMC's yield can be increased by up to 20%. Samsung's 3-nanometer process specifications are not even as good as Intel's 7-nanometer process.

In addition to the manufacturing process, Samsung has also launched some innovative chip packaging solutions in recent years. Especially in collaboration with Amkor Technology, Samsung has successfully developed the 2.5D packaged H-Cube technology. The 2.5D packaging allows logic chips or high-bandwidth memory to be placed in smaller sizes on silicon interpolation components.

In summary, Samsung can be said to have put all its efforts into high-level adjustments, investment, manufacturing, and packaging, with the aim of continuously improving its competitiveness and winning the initiative in the competition with TSMC.

TSMC plans to invest $100 billion in the next three years to support the development and construction of advanced process technology. By 2022, TSMC's capital expenditure will reach $44 billion, with the vast majority being used for OEM business. Samsung and TSMC are competing for market share in increasing production capacity around the world, but currently it seems that Samsung is at a disadvantage.

Both companies will build new wafer factories in the United States, mainly producing 5nm process chips. But outside the United States, TSMC is even more sought after. For example, TSMC has already reached an agreement with Japan to work with Sony to build 28nm and 22nm wafer fabs in Japan; Recently, there have been reports that Germany is also actively engaging with TSMC.

In terms of process technology, TSMC's stability and success in the 7nm and 5nm processes have led to more orders from well-known customers. TSMC's biggest customer is Apple; Secondly, MediaTek; AMD again; Then there is Qualcomm; After Qualcomm, there are also Broadcom, NVIDIA, Sony, and others.

In addition, TSMC has also made progress in the 3nm process technology. It is reported that TSMC's first 3nm process node is called N3, which began mass production in the second half of 2021 and was delivered to its early purchasers such as Apple in early 2023. Moreover, TSMC will also introduce more advanced 3nm process nodes, namely N3E, N3P, and N3X, with mass production scheduled for the second half of 2023, the second half of 2024, and 2025, respectively.

In short, maintaining a leading advantage in technology, expanding diversification in the market, continuously increasing investment, stabilizing relationships in cooperation, taking responsibility in society, and achieving sustainable development in the environment are all manifestations of TSMC's steady progress.

So why have the two giants in the field of OEM announced the cessation of production expansion? Some American media even assert that China is not buying anymore! What the hell is going on here?

Firstly, it should be clarified that the Chinese market is very important and cannot be ignored for any chip company. According to ICInsights data, not only did China's global chip sales market share climb to 34% three years ago, with sales approaching $150 billion, far exceeding other regions, but there is also good growth potential and demand potential.

However, in the past few years, under the pressure of the US, after Chinese companies such as Huawei were cut off from supply, after China's independent innovation capability improved, with the support of China's chip industry policies, after China's chip companies accelerated their development, and after Chinese consumers awakened their patriotism... The Chinese market is no longer so easy for foreign chip companies to enter and retain.

From the perspective of suppliers, some Chinese enterprises have started independent research and development or seeking alternative suppliers to meet their own needs. For example, Huawei has completed independent research and development of 13000 core components; Xiaomi and other companies have adopted domestic alternatives in chips such as audio and power supply; Enterprises such as Changjiang Storage and Changxin Technology have also begun to enter the Apple iPhone supply chain; Wafer factories such as SMIC International have also begun to expand their production capacity and improve their technological level.

From a consumer perspective, some Chinese consumers have begun to resist or reduce their purchases of products from foreign chip companies, especially those from the United States who participate in sanctions against Chinese companies. For example, some consumers refuse to purchase phones equipped with Qualcomm chips, some choose to purchase televisions equipped with Huawei chips, and some support purchasing cars equipped with domestic chips.

From a policy perspective, the Chinese government is also increasing its support for the integrated circuit industry, encouraging domestic and foreign chip companies to invest and build factories in mainland China. However, it also requires these companies to comply with Chinese laws and regulations, safeguard China's data security and national interests. For example, China has initiated a security review of foreign chip companies, requiring them to submit core data such as customer information to prevent these data from being used for sanctions or suppression against China.

In summary, the Chinese market is no longer flat sailing for chip companies such as TSMC and Samsung, but full of challenges and competition. If these enterprises want to establish and develop in the Chinese market, they must adapt to the changes and needs of the Chinese market, respect the choices and wishes of Chinese consumers, and comply with the regulations and requirements of the Chinese government. Otherwise, they may lose the world's largest, most important, and most promising market.

From the competitive situation of Samsung and TSMC in the wafer foundry market, the reasons for their recent announcements of slowing down or reducing production capacity, and the impact and challenges of the Chinese market on foreign chip companies, it is not difficult to see that Samsung and TSMC have a pivotal position in the chip industry, with their own advantages and strategies in technology, market, investment, and other aspects.

However, in the context of changes in the global chip supply and demand pattern, Samsung and TSMC are also facing some difficulties and pressures. Especially in the Chinese market, they not only need to compete with increasingly powerful domestic chip companies, but also respond to changes and demands from various aspects such as the Chinese government, consumers, and suppliers. Therefore, they must adjust their development ideas and action plans to adapt to the new situation and challenges.

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