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2021/03/05
The major suppliers of WFE (wafer fab equipment) in the US are progressing smoothly in the application for license from the US government for the exportation of equipment systems, equipment parts, and customer services for 14nm and above processes to Chinese foundry SMIC The US-based equipment suppliers that are applying for the license include Applied Materials, Lam Research, KLA-Tencor, and Axcelis TrendForce believes that as some support from US-based equipment suppliers is forthcoming, SMIC should be able to continue its efforts in the optimization of the mature process modules and overcoming production bottlenecks to avoid a scission in raw materials and spare parts, and predicts the company to sit at a global market share of 42% in 2021 Keeping SMIC in operation will provide a bit of relief to the capacity crunch in the global foundry market, however, the tightening of the available production capacity will remain a challenge that is difficult to resolve for the foundry industry as a whole Also, the US government continues to prohibit SMIC from obtaining the equipment of the advanced nodes that are 10nm and below, and the particular restriction poses a potential risk for the long-term development of the Chinese foundry
SMIC Continues to Expand Domestic Demand and Localization under China’s Explicit Direction in Long-Term Development of Semiconductor
As the fifth largest IC foundry in the world, SMIC obtains over 70% of revenue from China and Asia-Pacific In terms of process node perspectives, 018um, 55nm, and 40nm contribute to the majority of revenue that totaled to over 80% from being applied on service platforms such as logic, BCD, eFlash, sensor, RF, and HV, and the coordination with the IC projects listed in the 13th and 14th Five-Year Plan of China will continue to enhance on the assimilation of localized WFE (wafer fab equipment) and raw materials
The sanctions imposed by the US Department of Commerce that have affected the long-term planning in production capacity and development strategies of SMIC are expected to result in a YoY declination of 25% in the capital expenditure of 2021 for the Chinese foundry SMIC intends to allocate the majority of its capital expenditure to capacity expansion for the mature nodes and the construction of a new joint-venture fab in Beijing, and is conservative towards investing in advanced process technology such as FinFET TrendForce believes that geopolitical factors and uncertainties in the WFE section of the supply chain have compelled SMIC to scale back its capital expenditure and shift its development focus to the 55/40nm and 018um nodes
A breakdown of SMIC’s revenue by region shows that more than 50% comes from China, though whether major global clients are willing to continue placing their orders with SMIC under the consideration of foundry selection and long-term cooperation amidst the unabated status in the semiconductor competition between China and the US will be a focus of observation going forward Pertaining to the return on investment for technology scaling and mature node, the development planning in advanced processes for SMIC no longer succumb to immediacy in demand under restricted client conditions and constraints from subcontractors On the other hand, the resources for chiplet and specialty IC that exert better functions for the operation of the company are focused on the existing 14nm and above matured processes to enhance on PDK (process design kits) for clients that may create a business model with prolonged profitability, as well as preserve R&D staffs and future growth dynamics
For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom
2021/01/13
Intel has outsourced the production of about 15-20% of its non-CPU chips, with most of the wafer starts for these products assigned to TSMC and UMC, according to TrendForce’s latest investigations While the company is planning to kick off mass production of Core i3 CPUs at TSMC’s 5nm node in 2H21, Intel’s mid-range and high-end CPUs are projected to enter mass production using TSMC’s 3nm node in 2H22
In recent years, Intel has experienced some setbacks in the development of 10nm and 7nm processes, which in turn greatly hindered its competitiveness in the market With regards to smartphone processors, most of which are based on the ARM architecture, Apple and HiSilicon have been able to announce the most advanced mobile AP-SoC ahead of their competitors, thanks to TSMC’s technical breakthroughs in process technology
With regards to CPUs, AMD, which is also outsourcing its CPU production to TSMC, is progressively threatening Intel’s PC CPU market share Furthermore, Intel lost CPU orders for the MacBook and Mac Mini, since both of these products are now equipped with Apple Silicon M1 processors, which were announced by Apple last year and manufactured by TSMC The aforementioned shifts in the smartphone and PC CPU markets led Intel to announce its intention to outsource CPU manufacturing in 2H20
TrendForce believes that increased outsourcing of its product lines will allow Intel to not only continue its existence as a major IDM, but also maintain in-house production lines for chips with high margins, while more effectively spending CAPEX on advanced R&D In addition, TSMC offers a diverse range of solutions that Intel can use during product development (eg, chiplets, CoWoS, InFO, and SoIC) All in all, Intel will be more flexible in its planning and have access to various value-added opportunities by employing TSMC’s production lines At the same time, Intel now has a chance to be on the same level as AMD with respect to manufacturing CPUs with advanced process technologies
For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom
