Recently, it is reported that TSMC and SONY plan to build a semiconductor plant in Kumamoto Prefecture, Japan, with a total investment of 800 billion yen (about 46 billion yuan). The new facility, which is scheduled to open by 2024, will use TSMC's advanced technology to produce image sensors and semiconductors for cars and industrial robots.
This is TSMC's second new plant outside Taiwan this year. In June, TSMC announced it would build a 5-nm 12-inch wafer fab in Arizona, with an investment of about $12 billion.
In addition to TSMC, other semiconductor manufacturers such as Samsung, Intel and Semiconductor Semiconductor International have plans to invest and build large factories. Such a large and intensive capacity expansion is also rare in the history of the semiconductor industry.
More than $225 billion has been announced for the five largest fabs this year
According to disclosed information, TSMC and SONY Group are considering jointly building a semiconductor plant in western Japan. The project's total investment is estimated at 800 billion yen ($7 billion), with the Japanese government expected to provide up to half of the funding. The plant will produce semiconductors for camera image sensors, as well as chips for cars and other products, and is scheduled to start production in 2024. Denso, Japan's largest auto-parts maker, also wants to get involved by, among other things, setting up equipment on site. Toyota motor Group members seek a steady supply of chips used in their car parts.
TSMC is also planning to build a 5-nm production line in Arizona with an investment of 12 billion dollars and has already started construction. The fab will initially be relatively small, with a capacity of 20,000 wafers per month, and will be expanded as needed.
TSMC is also aggressively expanding production in Taiwan. It is reported that TSMC will build another production center in Kaohsiung area, mainly by 7 nano cut, preliminary planning to build 6 factories in the local, the earliest 2023 start. The move follows TSMC's announcement that it will spend $100bn to increase capacity over the next three years.
In addition to TSMC, Samsung, Intel, Chip, SMIC and other major global semiconductor manufacturers have plans to invest and build factories on a large scale. Samsung plans to invest $17 billion in the U.S. to build advanced process fabs to produce semiconductor products and is looking for a site for a new chip plant in the U.S. Intel CEO Pat Kisinger announced plans to build two new chip plants in Europe and possibly expand them further. In March, Intel announced it would spend $20 billion to build two new chip plants in Arizona. The company announced a 13% increase in production from 12 to 90nm lines in the United States, Singapore and Germany in 2022. The company's 12-inch chip plant in Singapore will increase its annual production by 450,000 chips. Smic has announced the construction of three chip plants in Beijing, shenzhen and Shanghai this year, which will add capacity of 28nm or more and produce 240,000 chips a month. So far this year, TSMC, Samsung, Intel, Microchip and SMIC have announced a total investment of more than 225 billion US dollars.
Another important point to note is that this round of large-scale investment has both advanced and mature processes. Among them, the investment of advanced processes of 7nm and below reached $59 billion, and the investment of mature processes of 28nm and above reached $19.05 billion. There is also $146.998 billion of fabs invested without declaring major investment processes.
The new plants announced by Samsung and TSMC will mainly use advanced processes such as 3nm, 5nm and 7nm. Samsung announced in May this year that it will build a 3nm chip plant in Texas with an investment of $170 and an area of 4.8 million square meters, about four times the size of the Austin plant. TSMC announced plans to build a $12 billion 5-nm chip plant in Arizona that will produce 20,000 chips a month. In march, Intel CEO Pat Gelsinger also mentioned in a speech that Intel will invest $20 billion to build two new fabs, which are expected to mass produce 7nm or more advanced processes by 2024.
The companies smIC announced it would build in China this year still choose to use processes at 28nm and above. In March, SMIC announced an investment of Rmb15.28bn in the Shenzhen plant, which will produce 40,000 wafers a month. In September smIC invested rmb57bn in a joint venture with Shanghai's Lingang Free Trade Zone, which will produce 100,000 wafers a month.
Fab capacity expansion did not exceed market demand expectations
Although there is a shortage of chips, it usually takes two years for a wafer factory to go from start-up to mass production. What will the market look like two years from now? Will this new capacity, once released, create overcapacity?
Chips with 7nm and more advanced processes are mainly applied in CPU, GPU and other chips with high performance requirements, including QUALCOMM Snapdragon 888, AMD and Nvidia CPU, Nvidia GPU and other high-end graphics cards. TSMC's 5nm chips are mainly used in smartphone Soc, high-performance computing, and AI.
Ccid consulting, a senior analyst at liu Tun in an interview with "China electronics news" reporter said, benefit from the 5 g, digital transformation, such as industry trends, consumer electronics, 5 g base stations, and other fields will increasingly use 7 nm and more advanced processing chip, advanced processing chips have very large demand, so the future market basically able to digest new fab capacity increment. According to IC Insights, the market share of advanced process chips at 10nm and below will increase from 10% at the end of 2020 to 29.9% by 2024. In the context of the overall demand of the global chip market, the demand for advanced processes of 10nm and below will achieve a huge leap.
Wang Xiaolong, a research firm, told China Electronics News that the pace of capacity expansion for advanced processes is still relatively conservative and has not exceeded market demand expectations, and the current expansion will not cause overcapacity.
Liu Tun believes that in the case of more and more obvious foundry foreman effect, chip factories will have a closer relationship with the upstream and downstream of the supply chain, market forecast will be more accurate, and it will be less prone to overcapacity. Wang xiaolong also said that the chip factory will test customers to determine whether their demand is real or blindly follow the trend, customers' demand is repeatedly confirmed. Even if the client overstated, the final risk will be borne by the design company. Mature chips with processes of 28nm and above have a wide range of applications, including power management, image sensors, power devices, analog chips and many other fields. 28nm and above process chips in the whole chip supply accounted for the highest proportion, the largest demand type. The supply of chips from the end of 2020 to now is insufficient, mature process chips are the main target of shortage.
Liu Dong introduced in an interview with China Electronics News that at the present stage, cars are developing towards electrification, interconnection and intellectualization, promoting the wide application of automotive semiconductors such as power management chips, power devices, sensors and MCU. 5G communication technology supports a large number of frequency bands such as sub-6ghz and millimeter-wave. Need to base station, smart phones and other communications equipment will also be able to support the corresponding frequencies of rf signal, has given rise to a high demand for rf chip, and also with construction of Internet of things, a lot of IoT devices also led to the demand of the MCU, rf chip, most of these chips use mature process technology, as a whole, mature process chip market space is very large. Based on this, the expansion of 28nm and above chip capacity is also in line with market demand, and is not prone to overcapacity. For this, xin Mou research Wang Xiaolong also has the same judgment: "the mature process corresponding to the product, and the mature process relative gap is large, the demand is greater, so I think the mature process action is bigger, will not cause overcapacity."