Earlier this month, TSMC held an event to mark the start of construction of a semiconductor plant in Arizona, and today in Taiwan the company celebrated the start of mass production of chips on the island.Notably, such ceremonies are quite unusual for TSMC.According to the publication Focus Taiwan, Taiwan's TSMC today celebrates the beginning of mass production of chips in accordance with the 3-nm process technology.The Fab 18 plant will start producing the latest and most advanced chips on the territory of South Taiwan Science Park in Tainan.It is very important that such celebratory ceremonies are not typical for TSMC.Analysts do not rule out that the manufacturer demonstrates loyalty to its native island amid large-scale investments in the United States.Industry experts say the company is holding the ceremony to show it intends to keep Taiwan as a major hub for chip research, development and manufacturing despite the fact that it is now investing heavily at the other end of the world.Note that Apple will be among the first to receive 3-nm chips.Although Apple is now claiming the A16 chipset is produced according to the 4nm process, in fact TSMC is treating it as a 5nm variant with some refinements.The first 3nm chipsets that will be available in Apple products will be the M2 Pro and M2 Max, which will be shipped to Macs in 2023.TSMC factories in Arizona will produce 4nm chips first and only later will produce 3nm chips.The company's Taiwanese plants will begin producing advanced 3nm products first, with 2nm chipsets due to begin production in 2025.
TSMC feels no downturn in the market - November revenue soared 50.2 percent
TSMC management was optimistic this week about its prospects for contract manufacturing of semiconductor components for US customers, as its budget for building two facilities in Arizona reached $40 billion and its design capacity was tripled.On a global scale the company also feels good because its November revenue grew by 50.2% compared to the previous year.Image source: TSMCIn accordance with the statistics published by TSMC in November the company made about $7.3 billion in current exchange rates, and this corresponds to the sequential growth of 5.9%, and in annual terms the revenue jumped by 50.2%.We can not hesitate to call this year a period of significant growth for TSMC, because from January to November the company's revenue grew by 44.6% to $67.6 billion.For not the easiest year in terms of geopolitics the dynamics is very decent.Let us not forget, however, that not everything is cloudy in TSMC activities.The amount of capital spending for the current year, it still had to reduce from $40 to $36 billion.At the last quarterly event the company representatives also complained about the decline in demand for products used in the PC and smartphone segments, some of which are produced on an advanced 7-nm process.By the middle of next year, the company expects to regain the utilization rate of the respective production lines.The company also has to postpone the modernization of its facilities due to delays in the supply of lithographic equipment.
Intel hasn't changed its mind about building plants in Ohio and Germany despite the downturn in the industry - but it may cut its project budget
This week the pages of the Intel corporate blog featured a post by Keyvan Esfarjani, executive vice president in charge of manufacturing operations for the corporation around the world.He tried to reassure investors that deteriorating macroeconomic conditions would not force Intel to abandon its plans to build new facilities in the U.S.and Europe, although he acknowledged that funding for these projects should be carried out in proportion to projected demand.Source image: IntelThe main idea of the message of the Intel representative was that the company should already prepare for the future growth in demand for semiconductor products.It takes three to five years to build a plant and equip it with the necessary equipment, and the company simply cannot afford to ignore future market demands.Intel's management shares the experts' optimism, predicting an average semiconductor market turnover growth rate of 5 percent a year by the end of the decade.By the end of the forecast period, the market capacity should double to $1 trillion, so the company considers it necessary to invest in the construction of new enterprises, even now, when the current situation is not favorable to it.The second important idea, which broadcasts the executive vice president of Intel - the need for geographical diversification of chip production.With 80% of capacity concentrated in one tiny region (meaning Taiwan), semiconductor manufacturing is very vulnerable, according to Intel.Reportedly, this week the company acquired ownership of a piece of land in Magdeburg where a chip packaging and testing facility will be built, and eventually a second one will appear.The company has also signed a contract with Bechtel, a construction contractor that will start building new Intel facilities in Ohio.Here, the corporation expects to master mass production of chips using Intel 18A technology by 2025, with the U.S.Defense Department mentioned among the first customers.At the first stage, Intel expects to invest at least $20 billion at this site.A management representative made it clear that the company will work closely with German and Ohio state authorities to determine when and how much funding is needed for the relevant projects.Intel in this regard is going to be guided by the needs of the market and plan its major expenditures wisely.
If the chip production in Taiwan stops completely, the industry will need at least 5 years to recover
The meeting of top political leaders of China and the US was designed to ease tensions in the Taiwan issue.A significant portion of semiconductor components are manufactured in Taiwan, and stability in the region is extremely important for the entire global economy.Some experts believe that in the case of a complete shutdown of Taiwan enterprises, the semiconductor industry will be able to recover only in five years.Image source: TSМSimilar estimates in his interview with Barron's shares the author of the book \"War for chips: the battle for the most important technology in the world\" Chris Miller - Tufts University professor from the United States.In his opinion, the U.S.authorities underestimate the possible consequences of a regional conflict that could put Taiwan`s enterprises out of business.Not only do the island produces up to 90% of advanced semiconductor components, but also the local production volume of chips is so large that no other region in the world can compete with it so far.Up to a third of the annual increase in computing power in the world is provided by Taiwanese enterprises, according to expert estimates.In the professor's opinion, the semiconductor crisis of 2020 and 2021, which paralyzed the work of the global automobile industry, is only a pale shadow of the likely problems that an armed conflict involving Taiwan would cause.Even the PRC's \"nonviolent\" methods of influencing the island's economy can have a significant impact on the determination of Taiwan's leadership to remain independent.By the way, Chris Miller highlights the role of qualified personnel in the formation of the modern semiconductor industry.The same founder of TSMC, Morris Chang, according to the author of the book, is the man to whom the whole world should be grateful for the technology we now have at our disposal.For the United States, however, it is important to maintain a sensible immigration policy, since many of the leaders of major technology corporations are migrant workers or their direct descendants, and their role in shaping U.S.industry and the economy is hard to dispute.
Sony, NEC and other Japanese companies will work together to restore the country's position in the chip market
Japan was one of the leaders in the semiconductor industry a couple of decades ago, but over time it has long lost its leading position in the relevant market.To remedy the situation, Japanese tech giants including Sony and NEC will spend about $500 million on a new company designed to restore Japan's leading role in microchip manufacturing.Image source: Moughit Fawzi/unsplash.com \"Semiconductors should be a critical component in the development of new advanced technologies like AI, digital industries and healthcare,\" Economy, Trade and Industry Minister Yasutoshi Nishimura said during a recent briefing.According to the Nikkei Asian Review, Rapidus, which is being established, will develop a new generation of semiconductors that will use sub-2nm process technology.Contract manufacturing could start around 2030.As the trade war between the U.S.and China picks up steam and Washington has limited China's access to semiconductor technology, Japan is rushing to revive its semiconductor industry, which has stagnated in recent years, to provide its own automakers and IT companies with advanced solutions in the field.Japan does not rule out that China will try to take Taiwan under its control, which is currently the largest center for the production of advanced semiconductors.Under the new strategy, Japan will encourage foreign semiconductor manufacturers to build factories in the country, in particular, funds of over $2.7 billion to build a plant in Kumamoto prefecture will be allocated to TSMC - the plant will supply semiconductors to Sony and car parts manufacturer Denso Corp.In July Japan pledged $635.5 million in subsidies to help manufacturers The funds will also be allocated to U.S.Micron Technology to expand production in Hiroshima.Image source: Jezael Melgoza/unsplash.comThe establishment of the new company signals the beginning of a new phase of Japan's semiconductor strategy.In addition, the country continues to deepen technological cooperation in the relevant field with the U.S.- in July, Japan and the United States agreed to establish a joint research center for the development of fast and energy-efficient semiconductors to 2 nm.The center is expected to be ready by the end of this year.Japan has a lot of catching up to do.The country's most advanced production lines are capable of producing 40-nm chips - it has not had the opportunity to invest in the industry comparable to rival states, which those states have been actively spending on industry development since the 2010s.Rapidus has already secured funds from the Organization for the Development of New Energy and Industrial Technology, Japan's national research center.Businesses like Toyota, Nippon Telegraph and Telephone Corp, as well as Kioxia Holdings, for example, are also investing in the company.
Chip imports to China fell markedly in 2022 amid US sanctions, especially in October
Chip imports to China fell by more than 13% from January to October, according to Chinese customs, as the world's largest semiconductor market is affected by the growing trade standoff between the US and the Middle Kingdom as well as a general economic slowdown.Source image: TSMSZThe first 10 months of the year, China imported 458 billion integrated circuits, which is 13.2% less than the 527.9 billion chips imported into the country in the same period last year.In October the decline in imports markedly accelerated - during the first 9 months of decline was an average of only 12.8%.Decrease in supply volumes is also due to the fact that in 2021 the import of integrated circuits took off - during the first 10 months of growth then was 21.2% year-on-year, so it is difficult to keep up with these figures now.But despite the decline in the volume of imports, higher prices for chips led to an increase in the value of supplies during this period by 1.3%, leaving $351.2 billion.In general, chips have long been a major item of imports to China, at one time by the value of purchases such imports overtook crude oil and consumer goods.Nevertheless, it began to decline at the beginning of this year, the first year-on-year decline since 2020.The drop in imports in October was 13.7% (to 41.1 billion) compared to October 2021.By comparison, 47.6 billion chips were imported in September.The accelerated decline in purchases comes amid Washington's strengthening of export controls and coincides with a global decline in demand for semiconductors as a whole.Source image: TSMC7 October, the Bureau of Industry and Security - a unit of the U.S.Department of Commerce announced a series of measures to control technology exports to China aimed at weakening the Chinese high-performance semiconductor sector - not only exports to the Middle Kingdom chips themselves, but also equipment for their manufacture, special permits for the production of semiconductors, and a number of other measures.At the same time, the value of sold year-on-year increased by 6.2%.The problem may be partly related to the outbreak of coronavirus in the country - due to sanitary restrictions, the ability to fulfill orders was also affected.
TSMC will build another plant in Arizona for $12 billion - 3-nm chips will be produced there
Taiwan's TSMC is preparing to implement another project with multi-billion dollar investments - the company intends to expand the chip factory under construction in Arizona (USA).In the coming months, the chipmaker plans to announce the construction of an advanced factory north of Phoenix, next to the already under construction facilities that were announced in 2020.The volume of investments, according to some reports, will be the same as 2 years ago - $ 12 billion.Image source: Maxence Pira/unsplash.comThe company began to actively develop chip production in the U.S.after Washington has promised semiconductor manufacturers all sorts of grants and incentives for the construction of enterprises on American soil.Future plant TSMC will produce chips in accordance with the 3-nm process, one of the most advanced to date.In TSMC said that the official ceremony of installation of the first batch of equipment for the manufacture of chips at the first plant in Arizona will be held in December - the beginning of construction was announced two years ago and the beginning of production is scheduled for 2024.While previously the company was going to produce 5-nm chips in Arizona, now we are talking about more advanced 4-nm variants.Mass production should begin in 2024.The timing of commissioning of the second plant is still unknown.The expansion indirectly indicates the manufacturers' optimism about the demand for semiconductors in the long term, even against the backdrop of disappointing market indicators for the current year.Demand for some chips collapsed after two years of rapid growth during the pandemic, during which demand for computer hardware and electronics skyrocketed.Many companies, including TSMC, had to go into savings mode and cut capital spending in the short term.Despite the downturn in the industry, semiconductor company executives still expect that in the next decade, global sales will exceed $1 trillion, so intensive investment in manufacturing infrastructure continues, especially since such plans in recent years are actively supported by the United States and Europe, hoping to move the \"center of power\" semiconductor industry from Asia.Intel and Micron are also trying to save money in the short term, while investing heavily in future projects based on strong demand.This year, the U.S.has distributed grants for chip production in the amount of $39 billion; the funds themselves will be allocated from next year.In addition, it also provides tax incentives for equipment for the production of semiconductors.Europe also intends to increase its production share in the global market of semiconductors up to 20% by 2030.Large plants typically take several years to build and equip, so companies must make investment decisions in advance.Image source: Robert Murray/unsplash.comThe enormous subsidies in the US and Europe for chip production are a reflection of political leaders realizing their critical importance in the military and civilian sectors.The active development of the relevant industry in China has caused deep concern in the West, after which the U.S.stopped promoting the idea of freedom of market relations and imposed tough sanctions on Chinese companies, which include a ban on both exports to the country of advanced chips and equipment for their production.In addition, the United States and its allies are concerned that the most advanced technologies of semiconductors are concentrated in Taiwan, an island that China considers part of its territory.It is known that in addition to the U.S., TSMC is considering expanding production in Japan and allows the construction of a multibillion-dollar plant in Singapore.
Experts explained why electronics manufacturers are \"swimming\" in chips, while automakers suffer from chip shortages
Recently, news about a total chip shortage has been replaced by information about a mitigation of the situation.What's more, some reports suggest that TSMC is asking its employees to take a leave of absence as computer makers have noticeably reduced orders, and orders from smartphone makers have declined even further, a trend that will continue into 2023.Meanwhile, while some manufacturers are not experiencing any shortage of semiconductors, many companies are still suffering from acute shortages.Image source: МicronAs Forbes reports, while TSMC's leading customers - Apple, AMD, Intel, MediaTek, NVIDIA, and Qualcomm are constantly developing more and more advanced processors, they are currently very \"conservative\" about sales forecasts and, therefore, production orders.In other words, the leading electronics component vendors do not need many chips yet.This is not surprising, because in this sector demand is largely determined by demand for PCs, which, according to Gartner, in April 2021 rose to record levels, sales of the top six PC manufacturers grew at a double-digit percentage rate, and for some time, even triple-digit sales of Chromebooks.This trend could not last forever, and figures have already appeared on the sale of certain models of Chromebooks for literally $79 (in the US) - even components for them cost more, but the market is already crowded, and demand is satisfied for almost years to come.At the same time for the release of new models manufacturers have to free up their warehouses from old and expect high demand for components in this segment in the foreseeable future is not necessary.For example, in its latest earnings report Micron Tecnology reported that demand in the calendar year 2022 will on average be lower than supply, which will lead to a build-up of large stocks in the warehouses of suppliers.Scarcity typically initiates massive investments in building new capacity and mastering new process technologies, resulting in the occasional oversupply crisis.Surplus is observed in many industries-but not in all.In particular, there is no abundance on the market of chips for cars.The point is that most of the semiconductors for cars are produced according to the so-called \"mature\" process technologies, and most of the demand is for 90-nm semiconductors.These were considered the most advanced solution around 2002, 20 years ago.Nevertheless, they are quite in demand, since many components simply do not need ultra-modern technology, and the process of transition to it is costly and long.Image source: BMWFactories continue to use the old tools for production and, since this segment is not the most profitable, for most manufacturers there was no need to invest in new capacity.Such semiconductors weren't quite enough already by the beginning of the pandemic, and 2020 recorded about an eight-week period in which most auto factories had to partially or completely suspend operations due to sanitary restrictions, after which they withdrew their semiconductor orders.Meanwhile, explosive growth in other sectors requiring chips has put \"obsolete\" production capacity to full use, and as Forbes reports, when automakers tried to restart orders, delivery times for them catast
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