In terms of foundry, TSMC’s capabilities are second to none. It used to be the advantage of Intel and Samsung. After the continuous breakthrough of TSMC’s technology, especially after entering the 5nm stage, it is undoubtedly a step ahead. Although Samsung can compete with TSMC in the market, it is still slightly inferior in terms of grabbing orders. Especially in the snatch of Apple’s orders, it is obviously not as good as TSMC. However, the close cooperation between Samsung and Qualcomm is also the key to competing with TSMC.
1.Apple propped up TSMC’s main foundry line
This year is also an extremely important year for Apple. The focus is on the launch of the 5G version of the iPhone 12 series. The demand for the A14 chip is very high, and TSMC is currently the only one that can manufacture it. Therefore, after TSMC lost Huawei, an important customer, because of the continuous influx of orders from Apple, it temporarily filled the vacancy of TSMC’s loss of Huawei. This is obviously very helpful for TSMC’s production capacity. However, whether it can be sustainable and long-term still needs to be observed, especially Apple’s control over the industrial chain has always been strong, which is currently TSMC’s technical advantage. Once there is an alternative foundry company for it, then Apple has always The practice is to choose “multiple legs” to walk.
Excessive reliance on a single manufacturer will gradually lead to a disadvantage in the fight for the right to speak in market competition in the future, especially when the technology following strategies of foundry companies such as Samsung and BOE are gradually showing results, TSMC is overly reliant on Apple’s single share, or will become a hindrance. After all, Apple’s market premium capability is the strongest, and it is also the manufacturer that is best at controlling the industry chain. Apple intends to support all parties in order to have unique bargaining power in the industry chain. Apple has also been cooperating with Samsung, and there have been many cooperation news with BOE.
Perhaps BOE’s technology is still difficult to match with TSMC and Samsung, but in time, it is hard to say whether it can catch up and surpass, and there is also SMIC’s eye. The development of TSMC is also from small to large. Moreover, after Samsung’s development in the mobile phone industry fell into relative difficulties, its investment in foundry, OLED, etc. has not been low. In terms of technology, it is on a par with TSMC, but only slightly inferior. If there is a breakthrough in technology and yield in the future, the ability to grab orders in the market will also increase sharply.
2.Strong demand in the Chinese market
As the Chinese market pays more and more attention to the chip industry, the ability to seek technological breakthroughs is also quietly accumulating. As long as the technology can make breakthroughs, it will gain sufficient support in the market. This is also a development that the relevant departments hope to see. In addition to OEM Apple chips, TSMC is also doing OEM for some domestic mobile phone manufacturers. However, after Huawei, which has the strongest independent research and development capabilities, suffered unfair treatment, it was deliberately suppressed in chip OEM. This is actually not good for TSMC. information. Once there are other wafer manufacturing capabilities that can bypass the US technology, then Huawei will have the opportunity to restart.
For TSMC, it does not want to lose Huawei’s orders, but it has no choice in the face of power. Relevant data shows that TSMC issued an announcement saying that in December 2020, TSMC’s revenue was NT$117.365 billion, down 6% from November and the lowest monthly revenue since July, but compared to last year It increased by 13.6% over the same period. The company’s total sales in 2020 reached NT$1.33 trillion (US$46.75 billion), with an annual growth rate of 25.2%, setting a historical record for annual growth rates over the years.
3. Why did TSMC’s revenue decline in December?
Why did the revenue decline in December? You know, TSMC’s 5nm technology should be in full swing at this time. The revenue capacity should also be super strong, but there has been a month-on-month decline. It shows that, to a certain extent, the market demand has also loosened. Including TSMC’s revenue has declined. Although Apple’s demand is still very strong, the production capacity of 5nm itself is limited, and it is difficult to support all of TSMC’s revenue growth only by relying on the production capacity of 5nm.
Of course, for the performance of the whole year, TSMC still has a lot to gain. Some analysts said that the company’s record revenue was mainly due to the demand for 7nm advanced processes in emerging technologies such as high-performance computing equipment and 5G applications. At present, only TSMC and Samsung’s processes can reach 7nm in the world. In the long-term competition between TSMC and Samsung, TSMC often leads the process and has a larger customer base. In addition, it is a direct feedback from the increase in chip shipments made by the 5nm process, which was put into mass production in the second quarter of last year and is mainly used to manufacture chips in the consumer electronics field such as mobile phones.
For future developments, especially in the first quarter of 2021, the market forecasts that TSMC will continue to benefit from strong global demand in the first quarter, with continued growth in 5nm chip shipments, and TSMC is expected to hit another record in 2021. All-time high. However, inventory issues are also a variable. Liu Deyin, chairman of TSMC, said that the industry is changing, and many manufacturers have a new level of understanding of the definition of normal inventory. There have also been reports of orders being cut in the market, because its own shipments are not very strong. However, TSMC denied this. More importantly, in 2020, TSMC’s stock price has soared about 60% from the previous year. The boost of the capital market is also for its unique position in the foundry chip market.