During the 2018 Taiwan computer exhibition, Zhang Zhongmou, the founder of TSI, was officially retired, and the development trend of the "post Zhang Zhongmou era" in the semiconductor industry of Taiwan was paid much attention.
Weak market demand, expansion of competitors and rising of chip industry in mainland China are three major challenges. Following the PC and mobile phone, whether we can seize the opportunity of 5G and the era of artificial intelligence has become the key to keep the competitiveness of Taiwan's chip industry.
New challenge of TSMC
After the retirement of Zhang Zhongmou, the founder of TSMC, the market believes that without the control of Zhang Zhongmou, and the intensifying competition between the internal and external environment, a series of new challenges will be ushered in to sit the leading position of the global wafer foundry for many years.
Lin Jianhong, the research manager of the National Institute of industrial research, said to the first financial reporter that TSI's market share in the global wafer generation market is 55%, and the market share of the advanced manufacturing process market in the global chip is 70%. TSMC is the most important manufacturer in vertical division of semiconductor industry, and its representative industry is communication industry.
"TSI is currently facing the problems, one is that the largest customers in the advanced manufacturing process of TDM chip business revenue ratio is too high, and the largest customers in the industrial growth slowed down; two is the IDM big factory in the advanced process of investment in the work of greater strength." Lin Jianhong believes that the above two aspects represent the change of demand and supply of foundry industry respectively. In general, I am afraid that the wafer foundry will face the next adjustment period. As for the extent of the adjustment, it depends on whether the demand for AI (Artificial Intelligence) chips can be connected.
In fact, market demand for global chip foundry is tightening. The outside world is expected to be the "mining tide" of the key power of TSMC's performance in recent years, and many variables have also emerged in the near future. Virtual currency "mining tide" to cool down, with GPU, such as ether coins, and so on, slow down demand, NVIDIA (Ying Weida) significantly reduced the existing GPU orders. In addition, due to the limited demand for computer games competition, NVIDIA is quite conservative for the new 12 nanometer GPU new product in the second half of the year. In addition, the recent leap into TVT customers in bit continent, due to the recent miner efficiency has been questioned and impact shipments, new mining machine order size is not as expected, and there are rumors that the mainland is deliberately dispersing risk, will add Samsung to second chip partner.
On the other hand, the market supply of chip foundries is increasing as competitors expand actively. Today there are two business models in the global semiconductor industry. One is the IDM (IntegratedDeviceManufacture, integrated device manufacturing) model, like Intel, from design, manufacturing, packaging and testing and a whole package to the consumer market; the other is a vertical division mode, and some semiconductor companies do only design, no factory. Such as ARM, NVIDIA and Qualcomm, and some companies only do their work and do not do the design, such as TVD, and the new model is the sign of the Taiwan integrated circuit company (TSI) in 1987. At present, the IDM company's efforts in the field of advanced manufacturing are increasing, resulting in intensified competition in TSMC.
The rise of China's chip industry is also a major challenge. There are many TSMC customers in the United States and China's mainstream technology companies, in which the Apple Corp orders account for nearly 20% of the total revenue of tji, as well as NVIDIA, high pass, HUAWEI, and bit continent. Zhang Zhongmou said in a media interview that Sino US trade friction is a challenge that it has never faced. At the June 5th TSMC shareholders' meeting, he stressed again that there are many changes in trade frictions between China and the United States, which is enough to change the development trend of the Chinese mainland and the global semiconductor industry.
Hope to renew the miracle
Although faced with many challenges, Zhang Zhongmou, who is retiring soon, is still confident of the prospects of TSMC.
TSMC has 47 thousand employees, about 30 thousand engineers, more than half of which are masters, and 2000 doctorates, all of which are related to technology development and advanced process. Therefore, Zhang Zhongmou believes that this can cope with the continuous evolution of chemical and physical technology, so TSI can maintain a high competitiveness and lead in the semiconductor industry.
Mr. Wei Zhe, President of TZC, pointed out that 2017 was a year of robust growth of TZC. Revenue, net profit and earnings per share were all more innovative. TZC's leading technology, excellent manufacturing, and commitment to R & D and capacity investment were able to be in mobile devices, high efficiency computing, IOT and automotive semiconductors Business opportunities and advanced technology in advanced semiconductor manufacturing.
In fact, the combined revenue of TSMC in 2017 reached 977 billion 450 million yuan (the same below), an increase of 3.1%, and net profit after tax 343 billion 110 million, an increase of 3% over the same period last year. The gross profit margin in 2017 was 50.6%. The proportion of R & D expenditure increased, the operating profit rate was 39.4%, and the net profit after tax was 35.1%.
In the advanced process technology, TSMC has made remarkable progress in the past two years. Not only further strengthen the technical status of the 28 and 22 nanometer process, and the application of the 16 nanometer process chip has already covered all kinds of mainstream smart phones, encrypted money, artificial intelligence, drawing processing chip and radio frequency products. In 2017, 10 nanoscale products entered the production with the fastest speed in history, and the first year of production accounted for 10% of the annual sales of all the wafers, while the 7 nanometer strengthening process ahead of the industry would be followed by trial production. The 5 nanometer process is expected to be produced in 2020.
Behind this, TSMC's technology research and development expenses increased by 13.5% in 2017. This made TSMC increase by 8.8% in 2017, up to 10 million 500 thousand tablets (12 inch wafer), 28 nanometers and less advanced process sales accounted for 58% of total wafer sales, up from 54% in 2016; for 8 years, the market share of professional IC manufacturing service has grown to 56%.
The future strategic positioning of TSMC is still the chip foundries, through the expansion of technology and services, to create an open platform. In 2017, the computing applications expanded continuously in the cloud end and the equipment end. The main mobile products have adopted the advanced process. The smart car stimulates the strong demand of the semiconductor, the Internet of things is growing, and the artificial intelligence will be embedded into various applications. Tji wants to participate in these long fields and expand the professional IC (integration). Circuit) market share in the field of manufacturing service.
Future opportunities in 5G and artificial intelligence
TSMC is the leading and mirror of Taiwan semiconductor industry. After the retirement of the father Zhang Zhongmou of the Taiwan semiconductor industry, the key to the whole Taiwan semiconductor industry is to seize the new opportunities in the era of 5G and artificial intelligence in order to preserve the status of the river and lake.
Lin Jianhong said to the first financial reporter that Zhang Zhongmou has witnessed two distinct milestones in Taiwan: the first is to build the wafer submission business of TSI, and in the PC era, the customer trust and a certain scale of technology are gradually established. When Zhang Zhongmou first stepped down as chairman of TSMC, the PC industry just came to the end. As Zhang Zhongmou regained control of TSMC, it was the wave of smart phones, which grew rapidly and lifted the role of the chip in the semiconductor industry. This time, Zhang Zhongmou officially retired from the position of chairman of TSMC, which corresponds to the stage of slow growth of smartphones.
The current product and kinetic energy include the change of AI (Artificial Intelligence) and the data center driven by 5G, as well as the needs of the interconnected society of all things with the performance requirements of the terminal product and the IoT (Internet of things) brought by smart cars.
Lin Jianhong said that Taiwan and the international chip companies see the same opportunities, will continue to invest on the existing basis. The semiconductor industry can be regarded as running, and every competitor actually performs similar movements, but some people are suitable for long-distance running, and some people are suitable for sprinting.
For the semiconductor industry in Taiwan, the challenges ahead lie external and internal, industrial and technological. From the external challenge, the Chinese mainland semiconductor industry is rising, and the share of the manufacturing market share in the mature process node of Taiwan will decline gradually. From the internal challenge, Taiwan's land, energy, education policy, salary level and other conditions will reduce the force of the manufacturing seal and reinvest. Therefore, the Taiwan semiconductor industry will be fast Facing the alternative competition of mainland mainland manufacturers.
On the industrial side, in the case of the slow growth of PC and smart phones, the market demand scale has been driving down the semiconductor manufacturing industry. "New market demand will appear in the fields of AI, 5G and auto driving vehicles. If the customers are favored in the competition, it will be the sustainable growth of the Taiwan semiconductor manufacturing industry." The key. Lin Jianhong said that in terms of technology, Moore's law is slowing down, extending Moore's law, and speeding up ecosystem building and cooperation beyond Moore's law will be a challenge.
According to the latest report from the Institute of industrial research, as demand for high-end smartphones is not as good as expected in the first half of 2018, as well as the increasingly blurred demarcation between high-end and mid end smartphones, the new features of smartphone vendors are not as expected to stimulate consumer changes, and indirectly suppress smartphone vendors. The demand for high performance processors is not as good as it used to be. The wafer generation industry is facing a slow driving force in the advanced process. The annual growth rate of the total output value of the global wafer generation in the first half of this year will be lower than the same period last year. The estimated output value is 29 billion 60 million US dollars and the annual growth rate is 7.7%. The top three industries of the city are the TM and the core. Combined electricity.
Taiwan enterprises occupy four seats in the top ten largest wafer generation factories in the first half of 2018 in the first half of the year, including TSI, joint, force crystal and world advanced. Among them, TSMC topped the list, with a market share of 56.1%.
In the first quarter of 2018, the list of the top ten IC design companies in the first quarter of the world, Taiwan enterprises also occupied three seats, including the joint development department, Ruiyu semiconductor, combined chanting technology, they were ranked fourth, eighth, ninth. In the first quarter of this year, the Department did not perform well in the first quarter of this year, and revenue has declined for four consecutive quarters, but the gross interest rate has gradually stabilized, such as its gross interest rate of 38.4% in the first quarter of this year, partly because the P60 processor uses a 12 nanometer process, has a competitive market advantage, plus a new OPPO order.
Turning to the future trend of other semiconductor enterprises in Taiwan besides TSMC, Lin Jianhong believes that Taiwan chip design company is stable but difficult to grow. MTK is slowing down as the mobile phone market slows down; Realtek (Rui Yu semiconductor) is growing in addition to PC multimedia, by color TV chips, wireless and wired products; Novatek is the main growth kinetic energy with TDDI (touch and display driver integration) and color TV chips.
In Taiwan chip agency, UMC (Lianhua Electronics) expands the base of production through foreign cooperation, but slows down the investment in the advanced process of the next generation, and hopes to improve the company's financial structure and the deepening of existing technology. The manufacturers of compound semiconductors benefit from the demand of biometrics for photoelectric components.
In the wave of AI, 5G, and smart cars launched last year, Taiwan semiconductor manufacturers are adding value to advanced process technology, integrated development of optoelectronic components, and SiP (system level package).
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