Opportunities for domestic chip manufacturing companies from two TSMC data

TSMC releases revenue data every quarter, two of which are segmented by process (by Technology) and segmented by platform (by Platform).

Opportunities for domestic chip manufacturing companies from two TSMC data

 Taken together these two data lead to the following conclusions:

① Revenue from process nodes (20nm, 16nm, 10nm, 7nm) more advanced than 28nm accounted for 52% of TSMC’s total revenue in Q3 in 2019 (Figure 1), and 55% in Q2 in 2020 (Figure 3). This shows that the revenue of mid-to-low-end processes below 28nm still accounts for more than 45% of TSMC’s annual revenue. According to TSMC’s annual revenue of about $34 billion in 2019, the revenue of low-end and mid-end processes below 28nm is about $15 billion.

In comparison, SMIC’s annual revenue in 2019 was US$3.1 billion, and the annual revenue of other domestic chip manufacturing companies was even lower, which was a big gap compared to TSMC’s US$15 billion. This also means that if domestic enterprises improve the market competitiveness of low-end and medium-end technology, there is still a lot of market space to strive for.

② From the breakdown of chip application platform data, smartphone and high-performance computing HPC revenue accounts for 78%-80% of TSMC (Figure 2 and Figure 4). Combined with the previous data – advanced processes above 16nm account for 52%-55% of total revenue, which means that chips manufactured using processes below 28nm in the smartphone and HPC fields still account for a considerable proportion, accounting for about 25% of TSMC’s revenue, About $8.5 billion.

This information is positive for China’s chip industry, which shows that 28nm is acceptable for many processor chips, and it does not necessarily require advanced processes such as 10nm and 7nm. In fact, the 3A4000 released by Godson last year is 28nm, and it can also exert good performance through architecture optimization and software optimization.

For the IoT, automotive electronics, and DEC industries, which add up to about 20% of the share (about 7 billion US dollars), basically all low-end processes below 28nm are used.

③ Both TSMC data point to the same conclusion – 10nm/7nm advanced process is important, but the low-end process below 28nm is still promising.

There are basically no major technical barriers for domestic enterprises in the low-end and mid-end processes, but the revenue of this part is far from TSMC’s US$15 billion. In my opinion, this is a gap in ecology and a gap in service capabilities. Compared with the investment in the development of advanced technology, the investment in perfecting the low-end technology is much smaller, but the benefits may be more significant.

According to the tape-out experience of colleagues and friends in the industry, the service capabilities of domestic chip manufacturing companies do have a lot of room for improvement. If the service awareness and service capabilities can be further improved, it will attract a large number of hardcore customers and form mutual trust, thereby accelerating the iterative optimization of technology.

Therefore, domestic chip manufacturing companies should not devote all their manpower to the development of more advanced processes. Perhaps they should allocate enough resources to improve the service capabilities of mid- and low-end processes, and increase investment to improve the ecology of mid- and low-end processes. , materials, unit library, EDA, IP, etc. are accumulated and polished, and strive to form market competitiveness in the international arena. Mid-to-low-end technology can become a stable source of cash flow, so it may be more certain to conquer high-end technology.

 

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