|Industry||Pure-play semiconductor foundry|
|Founded||Industrial Technology Research Institute, Hsinchu, Taiwan (1987 )|
|Headquarters||Hsinchu Science and Industrial Park, Taiwan|
|Brands||CyberShuttle prototyping service, Open Innovation Platform, eFoundry online services|
|Services||Manufacture of Integrated circuits and related services|
Taiwan Semiconductor Manufacturing Company, Limited (TSMC; Chinese: 台灣積體電路製造公司; pinyin: Táiwān Jītǐ Diànlù Zhìzào Gōngsī), also known as Taiwan Semiconductor, is the world's largest dedicated independent (pure-play) semiconductor foundry, with its headquarters and main operations located in the Hsinchu Science and Industrial Park in Hsinchu, Taiwan.
Founded in 1987 in Taiwan, TSMC was the world's first dedicated semiconductor foundry and has long been the leading company in its space. In addition to semiconductors, the company has also begun investing in lighting and solar energy-related industries. It is listed on both the Taiwan Stock Exchange and the New York Stock Exchange. Morris Chang serves as Chairman, while F.C. Tseng serves as Vice Chairman. Mark Liu and C.C. Wei serve as Presidents and co-CEOs.
Although TSMC offers a variety of wafer product-lines (including high-voltage, mixed-signal, analog and MEMS), it is best known for its logic chip product line with particular strength in advanced low-power processes such as 28 nm HPM with HKMG technology for mobile and high performance applications.
Most of the leading fabless semiconductor companies such as Qualcomm, NVIDIA, Advanced Micro Devices, MediaTek, Marvell and Broadcom are customers of TSMC, as well emerging players such as Spreadtrum, AppliedMicro, Allwinner Technology and HiSilicon, and many smaller companies. Leading programmable logic device companies Xilinx and Altera also make use of TSMC's foundry services. Some Integrated Device Manufacturers that have their own fabrication facilities like Intel and Texas Instruments outsource some of their production to TSMC. At least one semiconductor company, LSI, re-sells TSMC wafers through its ASIC design services and design IP-portfolio.
The company has been increasing and upgrading its manufacturing capacity for most of its existence, although influenced by the demand cycles of the semiconductor industry. In 2011, the company planned to increase research and development expenditures by almost 39% to NT$50 billion in an effort to fend off growing competition. The company also planned to expand capacity by 30% in 2011 to meet strong market demand. In May 2014, TSMC's board of directors approved capital appropriations of US$568 million to establish, convert, and upgrade advanced technology capacity after the company forecast higher than expected demand. In August 2014, TSMC's board of directors approved additional capital appropriations of US$3.05 billion.
In 2011 it was reported that TSMC had begun trial production of the A5 and A6 chips for Apple's iPad and iPhone devices. According to reports, as of May 2014 Apple is sourcing its new A8 processor from TSMC and is likely become a significant customer.
TSMC's market capitalization reached a value of NT$1.9 trillion (US$63.4 billion) in December 2010. It was ranked 70th in the FT Global 500 2013 list of the world's most highly valued companies with a capitalization of US$86.7 billion, while reaching US$110 billion in May 2014.
Apart from its main base of operations in Hsinchu in Northern Taiwan, where several of its fab facilities are located, it also has leading-edge fabs in Southern Taiwan and Central Taiwan, with other fabs located at its subsidiaries TSMC China in Shanghai, China, WaferTech in Washington State, USA, and SSMC in Singapore, and it has offices in China, Europe, India, Japan, North America, and South Korea.
The following fabs are in operation as of 2014:
- Four 300 mm (12 inch) "GIGAFABs" in operation in Taiwan (Fabs 12A, 12B, 14, 15)
- Four 200 mm (8 inch) wafer fabs in full operation in Taiwan (Fabs 3, 5, 6, 8)
- TSMC China (Shanghai), 200 mm (8 inch) (Fab 10)
- WaferTech, TSMC's wholly owned subsidiary, a 200 mm (8 inch) fab in Camas, Washington, USA
- SSMC (Systems on Silicon Manufacturing Co.), a joint venture with NXP Semiconductors in Singapore, 200 mm (8 inch), where production started at the end of 2002
- One 150 mm (6 inch) wafer fab in full operation in Taiwan (Fab 2)
The investment of US$9.4 billion to build its third 12-inch (300 mm) wafer fabrication facility in Central Taiwan Science Park (Fab 15) was originally announced in 2010. The facility was expected to output over 100,000 wafers a month and generate $5 billion per year of revenue. TSMC has continued to expand advanced 28 nm manufacturing capacity at Fab 15.
On January 12, 2011, TSMC announced the acquisition of land from Powerchip Semiconductor for NT$2.9 billion (US$96 million) to build two additional 300 mm fabs to cope with increasing global demand, which would result in Fab 12B.
WaferTech, a subsidiary of TSMC, is a pure-play semiconductor foundry located in Camas, Washington, USA. It is the largest pure-play foundry in the United States. The facility employs 1100 workers.
WaferTech was established in June 1996 as a joint venture with TSMC, Altera, Analog Devices, and ISSI as key partners. The four companies along with minor individual investors invested US$1.2 billion into this venture, which was at the time the single largest startup investment in the state of Washington. The company started production in July 1998 in its 200 mm (8 inch) semiconductor fabrication plant. Its first product was a 0.35 micrometer part for Altera.
TSMC bought out the joint venture partners in 2000 and acquired full control, and currently operates it as a fully owned subsidiary.
WaferTech is based in Camas, 20 miles (30 km) outside of Portland, Oregon. The WaferTech campus contains a 1 million square foot (90,000 m²) complex housed on 260 acres (1 km²). The main fabrication facility consists of a 130,000 square feet (12,000 m²) 200 mm (8 inch) wafer fabrication plant.
Sales and market trends
TSMC's sales have increased from NT$44 billion (US$1.5 billion) in 1997 to NT$597 billion (US$20.0 billion) in 2013, while net income was NT$188 billion (US$6.2 billion) in 2013 with a gross profit margin of 47%.
TSMC and the rest of the foundry industry are exposed to the highly cyclical nature of the semiconductor industry. During upturns, TSMC must ensure that it has enough production capacity to meet strong customer demand. However, during downturns, it must contend with excess capacity because of weaker demand, and the high fixed costs associated with its manufacturing facilities. As a result, the company's financial results tend to fluctuate with a cycle time of a few years. This is more apparent in earnings than revenues because of the general trend of revenue and capacity growth. TSMC's business has generally also been seasonal with a peak in Q3 and a low in Q1.
As of early 2014, TSMC is at the forefront of the foundry industry for high-performance, low-power applications, leading major smartphone chip companies such as Qualcomm, Mediatek and even Apple to place an increasing amount of orders. While the competitors in the foundry industry (primarily GlobalFoundries and United Microelectronics Corporation) have encountered difficulties ramping leading-edge 28 nm capacity, the leading Integrated Device Manufacturers such as Samsung and Intel that seek to offer foundry capacity to third parties are also unable to match the requirements for advanced mobile applications.
In March 2014, TSMC raised financial guidance for the first quarter of 2014 coming mainly from the increases in demand for 28-nanometer wafers and from customers’ active restocking of their inventory.
In April 2014, TSMC posted ‘unseasonably strong’ first-quarter results, and forecast better-than-expected sequential revenue growth of 22 percent to between NT$180 billion (US$5.97 billion) and NT$183 billion (US$6.07 billion) in the second-quarter fueled by resilient smartphone demand. The Q2 2014 revenues eventually came in at NT$183 billion, with 28-nanometer technology business growing more than 30% from the previous quarter.
In May 2014, DigiTimes reported that 28 nm production lead time was extended to 16 weeks which puts fabless chipmakers such as AMD, Broadcom, Nvidia, MediaTek, Qualcomm and Texas Instruments at risk of not meeting their sales expectations or shipment schedules. If makers of various application processors, baseband chips, graphics chips and other devices do not manage to get enough chips from TSMC, then there will be shortages of certain components in the market. This could affect launch schedules of certain products or even increase prices on certain devices.
In August 2014, it was reported that TSMC's production capacity for the fourth quarter of 2014 was already almost fully booked, a scenario that had not occurred for many years. The tight capacity was described as being caused by a ripple-effect due to TSMC landing CPU orders from Apple, which has also brought in other peripheral IC orders for iPhone, iPad and iWatch devices. This has forced chip suppliers for mobile devices to scramble for more wafer production capacity.
- Pure-play semiconductor foundry
- Semiconductor device fabrication
- Very-large-scale integration
- List of companies in Taiwan
- United Microelectronics Corporation
- List of Semiconductor Fabrication Plants
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