Absolutely fab: As TSMC invests $100bn to address chip shortage, where does that leave the rest of the industry?
- Reference: 1617364988
- News link: https://www.theregister.co.uk/2021/04/02/tsmc_fab_investment/
- Source link:
Word of the firm's investment plan comes from Nikkei Asia, which [1]claims to have seen a letter from TSMC CEO C.C. Wei outlining the investment plan. It follows closely on the heels of Intel CEO Pat Gelsinger [2]outlining Intel's foundry strategy and spending plans.
[3]
The demand for semiconductors reflects the lack of supply, which Falan Yinug, director of industry statistics and economic policy for the Semiconductor Industry Association, in February attributed to pandemic-related demand – IT purchases to support remote work – and the increased use of semiconductors in vehicles.
"The shortage is a reminder of the essential role semiconductors play in so many critical areas of society, including transportation," said Yinug in a [4]blog post . "This trend will only continue as demand for electronics and connectivity grows."
[5]
The [6]drought in Taiwan , where TSMC is based, hasn't helped.
Yinug argued that the shortage should be addressed by more federal support for chip manufacturing in the US and attributed the declining US share of the global semiconductor market – from 37 percent in 1990 to 12 percent today – to foreign government subsidies of foreign competitors that have gone unanswered.
Micron chief warns 'severe shortage' of DRAM expected to continue this year [7]READ MORE
A week later, the US-focused trade group sent a letter
[8]PDF
, signed by the CEOs of AMD, Intel, and other US chip makers, to US President Joe Biden asking for "substantial funding for incentives for semiconductor manufacturing."Biden on Wednesday [9]rewarded the industry by asking Congress, as part of his [10]American Rescue Plan , "to invest $50 billion in semiconductor manufacturing and research, as called for in the bipartisan CHIPS Act."
If Biden's plan gets approved, chipmakers may also see a halo effect from adjacent spending contemplated under the economic stimulus program, like $20bn for regional innovation hubs and community revitalization, $14bn for NIST "to bring together industry, academia, and government to advance technologies and capabilities critical to future competitiveness," and $50bn for the National Science Foundation (NSF) to create a technology directorate focused "on fields like semiconductors and advanced computing, advanced communications technology, advanced energy technologies, and biotechnology."
Another piece of US legislation proposed last year, the America Foundries Act of 2020, would offer as much as $25bn in grants to US states to fund fab facilities if it becomes law.
US chipmakers have already made comparable commitments, with Intel last month promising $20bn to build two new fabs in Arizona as a part of its planned foundry business.
But Intel will have competition there. Last year, in May, [11]TSMC also tapped Arizona as the location of a planned $12bn semiconductor fab it plans to build. And Samsung Foundry as of January was casting about for government subsidies to build a new fab site in Arizona, New York, or Texas
[12]PDF
, a deal [13]estimated to be worth $17bn and part of its plan to [14]spend $116bn on its foundry and chip business over the next decade. Both projects aim to be operational in 2024.The EU in March, as part of its [15]Digital Compass plan , said it wants to double its chip output to 20 per cent of the global market by 2030. The following day, Apple, a TSMC customer, [16]said it would invest over €1bn in a European chip design center based in Munich, Germany.
In November, trade group SEMI projected that the semiconductor industry will add [17]38 new 300mm fabs by 2024 , and more recently forecast [18]a surge in fab equipment spending.
According to a Congressional Research Service report published October 26, 2020, "Semiconductors: US Industry, Global Competition, and Federal Policy"
[19]PDF
, Taiwan, South Korea, and Japan accounted for two-thirds of the world’s semiconductor fabrication capacity in 2019, and China was responsible for 12 per cent of global fabrication.The report notes that US legislators have become increasingly concerned about the concentration of chip manufacturing in East Asia and the implications that has on the semiconductor supply chains in the event of trade conflict or warfare.
[20]
The federal government appears to be ready to pay to shift the center of chip-making gravity to more accurately reflect US interests. But other countries and foreign competitors have their own ideas about where chips should be made. ®
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[1] https://asia.nikkei.com/Business/Tech/Semiconductors/TSMC-cancels-chip-price-cuts-and-promises-100bn-investment-surge
[2] https://www.theregister.com/2021/03/24/intel_gelsinger_strategy/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YGc-wtDhbgWtULzvF0XM0AAAAIc&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://www.semiconductors.org/semiconductor-shortage-highlights-need-to-strengthen-u-s-chip-manufacturing-research/
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YGc-wtDhbgWtULzvF0XM0AAAAIc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2021/02/24/tsmc_drought/
[7] https://www.theregister.com/2021/04/01/dram_shortage_micron/
[8] https://www.semiconductors.org/wp-content/uploads/2021/02/SIA-Letter-to-Pres-Biden-re-CHIPS-Act-Funding.pdf
[9] https://www.theregister.com/2021/03/31/president_biden_broadband_chips_infrastructure/
[10] https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/31/fact-sheet-the-american-jobs-plan/
[11] https://pr.tsmc.com/english/news/2033
[12] https://assets.comptroller.texas.gov/ch313/1554/1554-manor-samsung-app.pdf
[13] https://www.statesman.com/story/business/2021/02/04/samsung-austin-expansion-chip-plant-seeks-1-billion-taxpayer-incentives/4309503001/
[14] https://www.reuters.com/article/us-samsung-elec-logic-chips/samsung-plans-116-billion-investment-in-non-memory-chips-to-challenge-tsmc-qualcomm-idUSKCN1S00CV
[15] https://ec.europa.eu/commission/presscorner/detail/en/ip_21_983
[16] https://www.apple.com/de/newsroom/2021/03/apple-will-invest-over-1-billion-euros-in-germany-and-plans-european-silicon-design-center-in-munich/
[17] https://www.semi.org/en/news-media-press/semi-press-releases/300mm-fab-outlook
[18] https://www.semi.org/en/blogs/business-markets/global-fab-equipment-spending-poised-to-log-three-straight-years-record-highs
[19] https://fas.org/sgp/crs/misc/R46581.pdf
[20] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YGc-wtDhbgWtULzvF0XM0AAAAIc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[21] https://whitepapers.theregister.com/
Re: Formosa
Given that China isn't doing so well on the home-front with chip fabrication, I don't know why they haven't started the Hong Kong playbook with Taiwan yet. Maybe they're waiting for civil unrest, so they can quash the uprising, swap out leaders, install a new National Security Law which supersedes their Basic Law where conflicts occur, require allegiance from Legislative Council members and smell like roses for the other half of the citizens who weren't protesting.
TSMC only has a single fab on US soil, everything else is in Taiwan except for two in China.
SMIC is doing OK, but they reported they're starting to struggle with 10nm designs due to US sanctions. And what was supposed to be China's next flagship foundry, Wuhan Hongxin Semiconductor, collapsed before they could even start.
Re: Formosa
Erm Taiwan isn't actually part of China (strictly according to the Taiwanese, China is part of Taiwan) so China imposing laws on Taiwan would be like Russia solving its car production by taking over Germany - and have a similar US response
Re: Formosa
There's been enough saber rattling between the US (and some other countries around the world) and China over Taiwan through the years, rising in a nice crescendo in recent times to wonder what China's next or final step will be to cement their hold on Taiwan. Xi does not like democracies.
But, I've taken this convo off course, so apologies... I'll grab my coat.
> But other countries and foreign competitors have their own ideas about where chips should be made. ®
I would add that other countries and foreign competitors may have own ideas about supply chain security and the strongly politically influenced US production with its export bans might not be the safest choice. For the internal US and satellites market, makes perfect sense.
They may also decide that US kit containing chips made with such large state handouts get the same 300% tarrifs that the US puts on say Canadian aircraft.
2x Track and Trace
A snip at only twice the money earmarked for the UK Track and Trace.
Formosa
Another risk is that Taiwan is next on the Chinese list after Macau and Hon Kong.
That’s a lot of production.