TSMC is about to sweep the chip orders in these two markets!!!

In the first half of next year, TSMC will be the only foundry in the industry to become the world's first wafer foundry to use the most advanced extreme ultraviolet (EUV) lithography equipment to complete mass production, helping TSMC to sweep most of the world's fifth-generation mobile communications (5G) and artificial intelligence (AI) key chip orders and firmly sit on the throne of the world's leading wafer foundry.

EUV solves the bottleneck of existing development technology through high-energy, short-wavelength light sources. It is a key equipment for the development of advanced processes. One unit costs 100 million Euros (about NT$3.5 billion). The timeline for wafer foundries to introduce EUV into mass production is seen by the industry as the key to technological leadership.

TSMC will take the lead next year and be the first to introduce EUV mass production, which means it will once again defeat strong rivals such as Intel and Samsung, and its position as the leading wafer foundry will remain unshakable.

TSMC Chairman Wei Zhejia confirmed that TSMC's 7-nanometer enhanced version (7+) with EUV will be mass-produced in the second quarter of next year. It is the world's first wafer foundry to use EUV to mass-produce chips for customers.

Earlier, Samsung announced that it had won some processor orders from Apple and claimed to be the world's first semiconductor manufacturer to introduce EUV mass production at 7nm. Wei Zhejia's statement was equivalent to a slap in the face of Samsung, declaring that TSMC's technology is far more valuable than its peers, highlighting that TSMC has won the trust of global chip manufacturers in advanced processes.

Wei Zhejia was unwilling to reveal the first batch of customers who will introduce EUV equipment for mass production, but stressed that multiple products will be introduced into the 7+FFT advanced process for mass production. It is reported that TSMC will apply EUV to the 5nm process for mass production in 2020 and begin to apply it to the development of 3nm process technology. The industry expects that TSMC will sweep 5G, AI and other orders with the advantage of EUV's leading mass production.

TSMC is making all-out efforts to advance its advanced processes. In recent years, with capital expenditures of tens of billions of dollars, foreign companies are still the main beneficiaries. Taiwanese equipment and material manufacturers can mostly only benefit from business opportunities such as peripheral consumables, cleaning, wafer regeneration and thinning, and the amount of benefits they receive is not as much as that of their foreign partners.

However, the semiconductor industry cluster effect driven by TSMC is quite significant. This year, many heavyweight semiconductor equipment manufacturers from all over the world have accelerated their layout in Taiwan, including American Applied Materials, Lam Research, German Merck, Japanese RS Technologies and Dutch ASML, highlighting that these major manufacturers are optimistic about TSMC's technological advantages and are fully assisting TSMC in developing advanced processes.

TSMC recently announced at a financial conference that it would cut its capital expenditure for this year by 10%, but it is still at the level of tens of billions of US dollars, and is still estimated to reach 10 billion to 10.5 billion US dollars.

An analysis of TSMC's annual capital expenditure of more than NT$300 billion shows that as the process becomes increasingly sophisticated, it is expected that most orders will still be won by foreign equipment manufacturers.

TSMC rewards its excellent suppliers every year, and most of them are foreign companies, including Applied Materials, Lam Research, Ebara Manufacturing, Hitachi International, Hoya, Shin-Etsu Chemical, Shin-Etsu Semiconductor, and Shengco.

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