TSMC repented, and the US chip continued to cut orders, and turned around to compete with the Chinese chip for mature technology

Although TSMC announced mass production of 3nm at the end of 2022, under the current circumstances, there is an obvious sign of overcapacity in advanced processes. In desperation, it began to turn around and compete with chips in Chinese Mainland for mature processes, trying to ensure its revenue, which is in sharp contrast to its high-profile move to the United States to develop 5nm and 3nm processes.
TSMC repented, and the US chip continued to cut orders, and turned around to compete with the Chinese chip for mature technology
1、 TSMC regrets setting up a factory in the United States
Under the temptation of the US $52 billion subsidy and the threat of a big stick, TSMC finally chose to set up a factory in the United States, and not only to build a 5-nanometer factory in the United States, but also to build a 3-nanometer factory. It seems that TSMC is determined to become “USMC”, but the subsequent result is quite disappointing.
Of the tens of billions of dollars of subsidies in the United States, 70% were given to American chip companies, Intel and Micron took more than 60%, Samsung also took 13%, while TSMC only took 10% of the share, which shows that the United States did not give corresponding rewards due to the strong support of TSMC. Therefore, foreign media believed that the United States did not regard TSMC TV as its own.
TSMC has paid a huge price to set up factories in the United States. It is estimated that the investment in 5-nanometer and 3-nanometer factories will be as high as $40 billion, while the subsidies given by the United States are less than 10% of the investment amount. After the completion of the factory, the cost borne by TSMC has increased by 50%. TSMC hopes that the American chip companies will bear the rising costs, but the American chip companies generally refused.
TSMC repented, and the US chip continued to cut orders, and turned around to compete with the Chinese chip for mature technology
More than that, American chips continue to cut orders. Intel once said that it would use the 3 nanometer technology of TSMC, but finally gave up; AMD, NVIDIA, Qualcomm and others have cut orders one after another. In the near future, Apple, which was the largest customer of TSMC and the only customer of the 3nm process, also faces a dilemma. The shipment volume of Apple in Q4 of 2022 will decline. Therefore, Apple has insufficient confidence in this year’s iPhone15. It is said that the order volume of 3nm will also decrease.
In this case, TSMC has overcapacity at 7nm and 5nm, and there is also a question about how many orders 3nm can receive from Apple. However, the 5nm and 3nm factories built in the United States have further increased TSMC’s advanced process capacity, which undoubtedly puts TSMC under great pressure.
2、 TSMC turned to develop mature technology
TSMC plans to build a 28nm production line in its factory in Nanjing, Chinese Mainland, and will also increase its 28nm production capacity in Taiwan, China, China. TSMC, which has the most advanced technology in the world, has undoubtedly turned to develop mature technology at this time, which has shocked the global chip industry. The industry believes that this should be related to its turning to win orders for chips from Chinese Mainland.
TSMC repented, and the US chip continued to cut orders, and turned around to compete with the Chinese chip for mature technology
The decline of American chips has been inevitable. Because many industries around the world are in decline, the decline of PC and mobile phone industries is obvious, and these products are precisely the industries that need advanced technology. With the decline of these industries, American chips are also beginning to be troubled. Intel, AMD, NVIDIA and others have seen performance decline, and Intel has suffered two consecutive quarterly losses for the first time in more than 20 years.
Other chip industries around the world have also begun to control costs, while the cost of mature processes is lower; Moreover, the chip packaging technology is glowing with the youth of mature technology. The chiplet technology can improve the performance of mature technology, so the global chip industry has turned to be optimistic about mature technology.
In terms of mature process chips, the chip industry in Chinese Mainland has just shown its competitive advantage. Previously, some Chinese chip companies said that their chip prices were only a quarter of those in the United States, and American home appliance manufacturers also said that they recognized Chinese chips, which provided development opportunities for Chinese chips. In this case, TSMC certainly needs to win orders for chips in Chinese Mainland.
TSMC also intended to borrow chips from Chinese Mainland to balance American chips. Previously, because American chips contributed 70% of TSMC’s income, American chips not only refused to increase prices, but also demanded price reduction, which led to the weakening of TSMC’s bargaining power. If it could obtain orders for chips from Chinese Mainland, TSMC could reduce its dependence on American chips.
TSMC repented, and the US chip continued to cut orders, and turned around to compete with the Chinese chip for mature technology
Based on the above considerations, TSMC has vigorously developed mature processes and competed with chip companies in Chinese Mainland, such as SMIC International. SMIC International has also not shown weakness. At present, SMIC International is promoting the construction of four chip factories, all of which are 28nm. Depending on the advantages of localization, TSMC may not be so easy to win orders from Chinese Mainland. It can be said that SMIC International was the appropriate choice to vigorously develop 28nm processes before.