TSMC
Customer partnership
Quality and Reliability Organization
Customized quality service
Supply of raw materials
Mask manufacturing
Real-time production process monitoring
Wafer packaging testing
Reliability and performance
Supplier partner
Fabless design company
Altera
AMD
Broadcom
Integrated component manufacturer
Analog Devices
Freescale
NXP
Difference from traditional manufacturing
Technology
Industry-University Cooperation
High technical level
High-level manufacturing
Manufacturing chips requires technical support
defect loss of the new product is about 5%
TSMC
students
Avoid talents shortage
Enhance company competitiveness
Get higher salary easier
More internship opportunities
Necessary conditions
Lots of capital investment
TSMC's investment in 10 nanometer is about 700 billion
Continuously improving technology
If the development is slower than others, customers will not choose your product
TSMC First Half 2021
3. THE DROUGHT
worst drought in years
semiconductor fabrication process
the chip shortage
4. MARKET EXPANSION & COMPETITION
A. Market expansion
Arizona fab
Construction
June, 2021
- 3,5B semiconductor fab
with total cost $12B - 2024: Phrase 1 target
20,000 5nm wafers
- Create job
- Support its ecosystem
- Support its operation
will employ 1,600-1,900 new workers.
Supplier LCY considers building a plant in Arizona
The city of Phoenix economic impact is estimated to be $38B over the next 20 years
The City Council commits to build roads, sidewalks, water infrastructure
Samsung+Intel
China
Revenue contribution grew in 1st quarter
Will invest $2.87B in Nanjing facility's 16nm and 28nm capacity.
Their 28nm output in particular would be quite substantial, reaching 40,000 wafers a month by 2023.
After SMIC & Grace Semiconductor
Japan fab
Proposal for building a plant in the Kumamoto
Sony : leader in image sensor chips goes into mobile phone and iPad camera
Europe Fab
- Customer volume : 10% of TSMC revenue
- Intel already in Dublin and likely to expand
B. The competition
Intel
Want to buy 3rd &4th
place player
GlobalFoundriesh
A flagship 3nm customer
Compete with Apple, AMD, TSMC
Samsung
Good at 10nm & 7nm but
has struggled with the 5nm & 3nm
Other players
AT&T
Want to buy -> fail
T-Mobile
Might merge
Sprint
Financial Result
Pandemic and TSMC
Future
N4X Technology Tailored for Performance
HPC product
Higher performance and usually higher frequencies
Power consumption
Heavier utilization and a higher percentage of dynamic power in the power envelope
Power of the Platform
effectively address memory bandwidth
power delivery
high-speed IO
the possibility of innovation for 10X[2]
Serviceability
long-term research and development in advanced technology
close engagements with many HPC customers
strengthen our platform offerings
Road to success
Established
Since 1987
Located in Hsinchu Science Park, Taiwan
CEO：Morris Chang
Platform company
pioneered
Pure-play foundry business model
First decade
1980s Economic depression
Semiconductor industry is not popular
No one knew the business model
High quality of technology skill and
Human Resources
Get INTEL’s Certified
Second decade
Financial crisis of 2008
Surplus dropped 95%
Lay off employees
Cost down
Morris Chang back to manage TSMC
2010 S1 earned $1.1 billionUSD
Now
Semiconductor Manufacturing
becomes the spearhead
Lack of wafer during Covid-19
USA & Japan government invite TSMC to set up the factory
The world leader
in building chips
Gross Margin
Capital Expenditure
Revenue
Net Profit
Increase 28% YOY and 2% QOQ
Revenue are seasonal
Revenue will be normal in 1st Quarter and revenue increase in 2nd half
Increase 52% in first quarter and decrease 50% in 2nd quarter
the variance 2% can cause the stock to pull back
Spent 14.8 billion in 2021
Decided to raise their budget upto 30 billion
Impact
Raising the capital budget can get positive response in stock market
Increase 20% in 2nd quarter but still lower from first quarter
Net profit margin is less
Higher Operating Expense
Spend more on selling, general and administration
Products
2nm , 3nm , 5nm and 7nm
In 2022, their economy of scale is 3nm
is the customer of 5nm and 7nm
5nm is lower margin than 7nm
Control System
What TSMC done for Taiwan
Covid Outbreak
Spread out throughout the Taiwan in May
Relentless Testing , Contact Tracing, Quarantine
Case level down
Cafe and Restaurants must close and social distancing at school
Donate 10million Vaccine (Bio N Tech)
US and Japan also help to fill the vaccine gap