Ok guys, so my weekly 2-day WSB ban has expired and I am back. I want to share with you some very autistically intelligent DD about this large company called TSMC. TSMC has become the most dominant semiconductor player that not many people have talked about until recently. They create the most advanced, production-ready node (mobile 7nm and HPC 12nm) and will soon create the 7nm HPC with AMD CPU/GPU and Nvidia GPUs.
The 3 largest foundries are TSMC, Samsung, Intel, and Global Foundry. Out of these, only TSMC is 7nm capable with 5nm w/EUV scheduled for next year. Samsung said they will have 7nm EUV by 2nd half of next year, and Intel's 10nm (equivalent to TSMC's 7nm) is nowhere to be found...
Here is the recent timeline of events:
1) AMD switches over from GlobalFoundry after GF shuts down 7nm.
2) GF is out of 7nm.
3) Samsung and Intel having problems with EUV migration. Intel has a boat load of other concerns (including getting large datacenter chips to get good yield as compared to AMD's multi-die approach - very smart Lisa! ).
4) Rumor has it (https://appleinsider.com/articles/18/09/11/intel-allegedly-outsourcing-some-14nm-orders-to-tsmc-as-mac-chip-maker-struggles-with-die-shrink) that Intel will outsource some 14nm to TSMC after 50% shortage of supply. That is completely unacceptable. In my opinion, I think big players such as Apple who needs these chips for their macbooks demanded this be done with a reputably consistent supplier.
5) a couple days ago, TSMC reported August earnings that were better than expected, as TSMC was hit with a computer virus (https://www.digitimes.com/news/a20180910PD212.html).
6) TSMC may acquire a memory company (either Nanya or Micron, https://www.electronicsweekly.com/blogs/mannerisms/dilemmas/tsmc-looking-buying-memory-company-2018-09/). The motivation is to develop better integrated solutions that contain both memory and logic/compute. I would really like TSMC to buy MU but it is most likely not going to happen due to US regulations. On the other hand, Nanya has somewhat outdated memory (~DDR3). Maybe some business agreement with MU instead of full on acquisition?
7) Apple will continue investing and using time-tested TSMC 7nm/5nm chips over Apple-rival Samsung, which already supplies OLED and DRAM to Apple.
8) Qualcomm/Huawei exclusively using TSMC's 7nm (recent news).
9) Xilinx (in 5G) using TSMC exclusively.
10) ARM using TSMC exclusively (https://www.anandtech.com/show/11832/tsmc-teams-up-with-arm-and-cadence-to-build-7-nm-chip-in-q1-2018).
8) Future 7nm customers include: AMD, NVDA, Apple, Xilinx, ARM, GraphCore (potential), Qualcomm and other mobile players, custom solns from: Google (TPU), FB, etc.
8b) Future 14nm: Intel
EDIT:
Furthermore, the foundry industry is now looking like the memory industry when only a bunch of players could survive. As a result, margins will naturally grow with lack of competition.
TSMC will own 5G+AI. If you are playing semis, I would overweight TSMC in that basket. Disclosure: I am long TSM
2nd EDIT:
My gut feeling: *EUV (Samsung/Intel) will be very cost-prohibitive (very low yield) till early 2020. EUV (soft x-ray at 13.5nm light) is extremely different than 193nm+double patterning litho (which has been time-tested for a decade+). It is the single greatest change in process technology since the patterning of FinFets. As such, the yields will be extremely poor. TSMC's website slated for risk-production of 5nm w/EUV in 2019, which puts 2020 in production target. TSMC however said that they will likely introduce 7nm FF+ w/ EUV in 2019. * Therefore, I bet Samsung and Intel will have to fall back to non-EUV in 2019 for production, giving TSMC a 1-2 year head start... Of course EUV will be refined but it will take till 2020 to improve yields to production standards. TSMC was very smart in being conservative with their nodes while Intel is cannibalizing their own fabs.
3rd EDIT: Renassaince Capital just recently opened a large long position on TSM (https://www.fairfieldcurrent.com/2018/09/06/renaissance-technologies-llc-has-140-97-million-position-in-taiwan-semiconductor-mfg-co-ltd-tsm.html).
Submitted September 12, 2018 at 12:22AM by seekingtheta_shoes https://ift.tt/2NziEzC
