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Industry watch: Race of next-generation node process

Colley Hwang, DIGITIMES, Taipei 0

Competition between leading semiconductor players TSMC, Intel and Samsung has been in the news quite often lately. To my knowledge, TSMC dominates business opportunities in 7nm and 5nm, with more than 90% of the share in these market segment. Now everyone is observing whether major foundry fabs can overcome technical challenges of 3nm node. Basically, 3nm is a transitional technology, while 2nm for commercial operation can be a tough nut to crack in the next stage after 2025, when the global semiconductor market size may amount to US$800-900 billion. If TSMC's market share remains unchanged, how much will they invest? How many employees will be needed? What about issues of power consumption? There are many challenges to be addressed. Should we listen to the advice of government think tanks, or speculation from US consultancies or the media outlets, or the industry reports from semiconductor associations?

If Intel aims at TSMC, who will be allies they have in mind? Samsung? UMC? Or even tech-giants like Amazon, Apple, Google and Tesla with powerful resources?

What will happen if war breaks out between Taiwan and China. Some speculate the US might blow up TSMC's fabs. With nearly 80% of equity belonging to foreign investors, TSMC could be publicly listed in the US. There are many approaches that the US could take to secure TSMC's strategic position. The bottom line here is whether Taiwan has a plan. Quality of mind may lead to success or failure. Without regular self-training, how can one secure a quality mind?

At the critical moment, a little negligence can cost you an arm and a leg. Thus, Intel recalled the Pentium chips with minor defects in the mid-1990s and incurred a great loss of billions of dollars. Great companies can fail not because they do anything wrong, but because they do everything right! They measure your quality and success or failure with the strictest standards. That's why Andy Grove said that if you are an industry leader, they will seek to take a bite of your achievements till you have nothing left!

The popular Hong Kong newspaper Apple Daily has now been folded. Some may attribute the failure to its founder to Jimmy Lai, who is now behind bars in Hong Kong because of political reasons. Even if Lai had stayed away from politics, would he have been able the company profitable? Once the rules of the game has changed, the most successful companies in the past are usually the most vulnerable. We're watching how Toyota is deploying its EV business. How would the Tier 1 auto parts suppliers Bosch, Denso, Continental and Magna respond to the requirements of carbon neutrality? These are big topics which we need to cautiously cope with.

DIGITIMES will stop printing hard copies some day as a result of soaring printing and delivery costs. Even delivery boys are delivering meals for Uber Eat. It is not because we are not competitive, but because the industry and the ecosystem of society has changed. The trend is irreversible and taking place now.

Credit: DIGITIMES

Colley Hwang, president of DIGITIMES Asia, is a tech industry analyst with more than three decades of experience under his belt. He has written several books about the trends and developments of the tech industry, including Asian Edge: On the Frontline of the ICT World published in 2019, and Disconnected ICT Supply Chain: New Power Plays Unfolding published in 2020.
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