TSMC develops 28nm chip technology, SMIC is under great pressure

Recently, TSMC officially announced that it will build a fab in Japan for the production of automotive chips, CMOS chips, etc. The main processes are 22nm, 28nm and other processes above 20nm.

In April, TSMC stated that it would invest 2.887 billion US dollars (about 18.8 billion yuan) to expand the production line in the Nanjing factory, with a maximum production capacity of 40,000 pieces of 28nm.

In fact, before April, TSMC still held the opposite opinion on 28nm and related mature processes. TSMC said that the current 28nm production capacity is actually sufficient, but the market demand and production capacity are not well connected.

This means that some manufacturers are hoarding goods, resulting in tight production capacity. In fact, the total production capacity matches the demand, so TSMC will not expand mature production capacity such as 28nm, otherwise it will lead to excess production capacity.

What I didn’t expect was that it didn’t take long for TSMC to expand the production of mature processes such as 28nm.

So why does TSMC want to expand the production capacity of 28nm? The reason is very simple. On the one hand, there is a global shortage of cores. In the first three quarters of this year, nearly 5 million vehicles in the world will be delayed due to “lack of cores”. Industry sales will fall by $60 billion.

Not only automotive chips, but also chips with mature processes such as Display driver ICs, power management ICs, MCUs, CMOS, etc., are relatively nervous this year, and prices are rising, so TSMC’s expansion is also due to market demand.

Secondly, for TSMC, although the advanced process is highly profitable, the investment is too large, resulting in a very high pressure on TSMC. The mature process, although the profit is low, but the investment is low, the technology is mature, and the yield is guaranteed.

In addition, the depreciation of TSMC’s 28nm production line has already been completed, which means that compared with the 28nm process of friends, TSMC’s 28nm process will have a better cost advantage, and the scale of production capacity and product quality will also be superior. In the same way, TSMC is also making money with the 28nm process. After all, the market demand is here.

For TSMC’s global expansion of mature processes such as 28nm, companies such as SMIC and Hua Hong are under great pressure. After all, companies such as SMIC and Hua Hong currently rely on mature processes such as 28nm.

Once TSMC competes on the 28nm process, the pressure is still quite large, customers, costs, and the market are all here, so the next thing to see is how this competition unfolds.

Of course, there are still some differences in the customer groups of TSMC, SMIC, and Hua Hong, but it is undeniable that customers will not necessarily change, and ultimately it depends on the cost and advantages of the foundry.

The Links:   SKKH162-16E SKM600GA125D

Author: Yoyokuo