TSMC leads the way in 7nm process, betting on two major technologies in the future

TSMC (2330-TW), the leading foundry company, uploaded its annual report today (17). In a report to shareholders, Chairman Liu Deyin and President Wei Zhejia pointed out that in the face of operational headwinds such as economic weakness and international trade tensions this year, the company will strengthen its business, accelerate technological differentiation, and strengthen network security and confidential information protection measures. They also believe that the continued industry trends of 5G and AI will drive the growth of the semiconductor industry in the future. TSMC also emphasized that its 7nm process is at least one year ahead of its peers and is currently the most advanced logic process technology in the industry.

This year's TSMC annual report is the first annual report after Liu Deyin and Wei Zhejia took over. In the report to shareholders, Liu Deyin and Wei Zhejia stated that last year was a year in which TSMC achieved many milestones. Revenue, net profit and earnings per share set records for seven consecutive years. It also successfully mass-produced the 7-nanometer process, leading other peers by at least one year. It is the industry's first most advanced logic process technology.

Liu Deyin and Wei Zhejia pointed out that the 7-nanometer process technology went into mass production last year, completing more than 40 customer product design decisions, and is expected to obtain more than 100 new customer product design decisions this year; the second-generation 7-nanometer process technology (N7+) entered the trial production stage in August last year and is expected to go into mass production this year, becoming the industry's first commercial extreme ultraviolet (EUV) lithography process technology.

In terms of 5-nanometer process, the progress of technology development is in line with expectations. It is expected to enter trial production in the second quarter of this year, and the customer product design finalization plan will begin in the first half of the year, and the mass production target will be achieved in the first half of next year. In addition, 3-nanometer technology has also entered the full development stage.

TSMC's wafer shipments last year increased by 2.9% year-on-year to 10.8 million 12-inch equivalent wafers. Among them, sales of 28-nanometer and below advanced process technologies accounted for 63% of total wafer sales, higher than 58% in 2017. A total of 261 different process technologies were provided, producing 14,360 different products for 481 customers, and its market share in the integrated circuit manufacturing field has grown for 9 consecutive years, reaching 56%.

Looking ahead to this year, Liu Deyin and Wei Zhejia said that in the face of operational headwinds brought about by the weak global economy and international trade tensions, they will strive to strengthen the basic business and accelerate technological differentiation. They will also strengthen network security and confidential information protection measures. When the clouds clear and the sun shines, they are determined to become a stronger force in the semiconductor industry.

Liu Deyin and Wei Zhejia also said that they believe that the continued industry trends of 5G and AI will drive the growth of the semiconductor industry in the future, and TSMC will be in the best position to lead the industry and provide the most advanced and complete solutions for future applications in the semiconductor market.

In addition, in order to better meet customer needs, TSMC officially announced the 6nm (N6) process earlier, which is a significant enhancement based on the existing 7nm (N7) process. It is said to provide highly competitive cost-effectiveness and accelerate product research and development, mass production, and market launch.

TSMC has two versions of its 7nm process. The first generation uses traditional DUV lithography technology, while the second generation adds EUV extreme ultraviolet lithography for the first time. It has entered the trial production stage and is expected to be used in the next generation of Apple A and Huawei Kirin.

The new 6nm process also has EUV extreme ultraviolet lithography technology, which is said to increase transistor density by 18% compared to the first-generation 7nm process. At the same time, the design rules are fully compatible with the first-generation 7nm, making it easier to upgrade and migrate and reduce costs.

TSMC's 6nm process is expected to start trial production in the first quarter of 2020 and is suitable for mid-to-high-end mobile chips, consumer applications, AI, networking, 5G, high-performance computing, etc.

Competition between Samsung and TSMC becomes increasingly fierce

TSMC and Samsung are once again competing in advanced processes. Samsung recently announced that its 5nm FinFET process technology has been developed and can provide samples to customers. The addition of extreme ultraviolet (EUV) technology further improves chip power consumption and performance. After Samsung announced the completion of 5nm technology development, TSMC also announced its 6nm process and is expected to enter trial production in the first quarter of 2020. The two major foundry powers have released the progress of advanced processes one after another, and the competition is very intense.

It is reported that compared with 7nm, Samsung's 5nm FinFET process technology improves the efficiency of the chip logic area by 25%, reduces power consumption by 20%, and improves performance by 10%; at the same time, Samsung will also use all its intellectual property rights in the 7nm process in the 5nm process to reduce the cost of customers switching from 7nm to 5nm, and can pre-verify the design ecosystem and shorten the 5nm product development process and time.

Charlie Ba, executive vice president of Samsung's foundry business, said that the successful completion of the 5nm process technology development proved Samsung's capabilities based on EUV nodes. In response to the market's growing demand for advanced processes, Samsung will strive to accelerate the mass production of chips based on EUV technology in the future to meet emerging applications such as 5G, artificial intelligence (AI), automobiles, and high-performance computing (HPC).

Samsung’s wafer manufacturing business is currently working closely with its “Samsung Advanced Foundry Ecosystem (SAFE)” partners to provide a strong design infrastructure for Samsung’s 5nm process, including process design kits (PDKs, design methodologies (DMs), electronic design automation (EDA) tools and IPs, which have been available since the fourth quarter of 2018.

Samsung pointed out that it has begun to provide 5nm multi-project wafer (MPW) services to customers, and has successfully taped out the 6nm process. The 7nm process is about to enter the mass production stage. In the future, it is also expected to expand the EUV production line in Hwaseong, Seoul (scheduled to be completed in the second half of 2019) to accelerate EUV chip production.

On the other hand, after Samsung announced the completion of its 5nm process, TSMC also publicly responded by announcing the launch of 6nm (N6) process technology, which greatly enhanced the current 7nm (N7) technology, helping customers gain a highly competitive advantage between performance and cost, while achieving the goal of accelerating product launches through direct transfer of N7 technology design.

TSMC Vice President of Business Development Zhang Xiaoqiang pointed out that N6 technology will continue TSMC's current market competitive advantage, provide customers with higher performance and cost-effectiveness, and enable customers to quickly obtain higher product value from this new technology through a complete design ecosystem.

With the new capabilities gained by using EUV lithography technology in the currently trial-produced 7-nanometer enhanced version (N7+), TSMC's N6 technology has increased its logic density by 18% compared to N7 technology. At the same time, the design rules of N6 technology are fully compatible with the proven N7 technology, allowing the complete 7-nanometer design ecosystem to be reused. In other words, N6 provides customers with a seamless upgrade path with a fast design cycle and only requires very limited engineering resources, supporting customers to adopt this new technology to achieve product benefits.

TSMC pointed out that N6 technology is expected to enter trial production in the first quarter of 2020, providing customers with more cost-effective advantages and continuing the 7nm family's advantages in power consumption and performance, supporting a variety of product applications, including high-end to mid-range mobile products, consumer applications, AI, networking, 5G infrastructure, graphics processors and high-performance computing.