Taiwan Semiconductor Manufacturing Company (TSMC) is enjoying a sweeping dominance in the 7nm process space, as it has entered volume production of APs for new iPhones set to hit the market in September using the advanced node and in-house developed InFO packaging process, and will also ramp up 7nm production to fulfill robust orders from more than 10 clients including HiSilicon, Qualcomm, AMD and Nvidia in the second half of 2018, according to supply chain sources.
Besides extending its lead over competitors in the 7nm race, TSMC is also thickening the capital and technology barriers for competitors to enter the 5nm field with a planned investment of US$25 billion. Now Samsung Electronics and Intel are the only two contenders in the development of advanced processes, but TSMC's commitments of not to compete with clients or engage in branding efforts has enabled the pure-play foundry house to outperform rivals in winning trust from customers and further expand its foundry territories, the sources continued.
2018 revenues may exceed NT$1 trillion
TSMC now enjoys a firm leadership in wafer foundry with a global market share of around 50%, compared to less than 10% each for Globalfoundries, United Microlectronics (UMC), Samsung and China's Semiconductor Manufacturing International Corp (SMIC), and its annual revenues for 2018 are expected to soar past the level of NT$1 trillion (US$32.89 billion). Besides handling big orders from existing clients, TSMC is also aggressively developing its new customer base in AI, IoT and automotive electronics sectors, the sources indicated.
According to TSMC production plans, there will be over 50 tape-outs completed for 7nm fabrication by the end of 2018, and 7nm+ process incorporating EUV technology will also enter the tape-out phase in the second half of the year. In addition, TSMC will start to tape out 5nm test chips in early 2019 before kicking off volume production by the end of 2019 or early 2020. As to 3nm process, it is slated for volume production by the end of 2020.
Industry sources said that in-house developed advanced packaging technologies are TSMC's another crucial weapon to thwart competitors, allowing the company to offer one-stop services for clients. After its second-generation InFO packaging process kicked off volume production in 2017, its latest InFO-oS (InFO on Substrate) packaging technology has also cleared related customer verifications in 2018, enabling TSMC to defeat Samsung in wining orders from Apple to fabricate all the AP orders for new iPhones.
Samsung's catch-up efforts
The sources noted that Samsung is developing at full throttles InFO packaging technology and it has also claimed to outpace TSMC in kicking off official production of EUV 7nm+ process, set for the second half of 2018, seeking to win back orders from Apple in 2019.
But industry watchers said that the EUV 7nm process involves yield-rate issues and quality risks, and even TSMC has yet to completely address the risks and will only fully incorporate the EUV technology in the 5nm node.
They continued that Samsung is expected to initially use the process to fabricate APs for its own next-generation Galaxy S10 smartphones. The Korean tech giant has reportedly lowered its foundry quotes by 20% to attract orders from Qualcomm, Apple, Nvidia, and ASIC vendors, but with little response from them probably due to the risks involved.
TSMC dominates 7nm production
Photo: Michael Lee, Digitimes, June 2018
Article translated by Willis Ke
