In recent years, the semiconductor industry has developed rapidly around the world. As one of the world's largest chip foundries, TSMC has a huge market share in this field, not only in the leading position in technology research and development, but also in market performance. However, a helpless fact is that TSMC's income from Chinese mainland far exceeds that of local companies such as SMIC. Recently, data released by some media showed that TSMC earned $55 billion from Chinese mainland last year, while SMIC's revenue was only $49.5 billion, which implies many problems.
TSMC's business performance in Chinese mainland
TSMC is a Taiwan-based chip foundry whose products are widely used in electronics, communications, computers and other industries. In the past few decades, TSMC has always had strong technical strength and high market share, and is in a leading position in the world.
However, TSMC has performed better in the Chinese mainland market. In Chinese mainland, due to factors such as the policy environment and market demand, the chips produced by TSMC are in very strong demand in the high-end market. This also laid the foundation for TSMC's success in the Chinese mainland market.
Specifically, according to public data statistics, TSMC earned $55 billion in revenue last year through its Chinese mainland business. Among them, TSMC has performed very well in the wafer foundry business, including Apple A14, Qualcomm Snapdragon 888 and other flagship chips are all manufactured by it. In addition, with the advent of the 5G era, its business performance in the field of communications has become more and more important.
At the same time, TSMC's investment in Chinese mainland is also increasing. Since 2018, TSMC has successively set up two wafer fabs in Nanjing and Shanghai, transferring production lines from Taiwan to the mainland. It is estimated that by the end of 2021, TSMC is expected to build a new 5nm process fab in the mainland, with an estimated huge investment, reaching more than 7 billion US dollars.
SMIC's dilemma
Unlike TSMC, SMIC, a local Chinese company, has performed relatively weakly. Founded in 2000, SMIC is one of the earliest semiconductor chip design companies in China, mainly engaged in the development and design of various integrated circuit chips and wafer foundry services.
However, SMIC faces great difficulties in the rapidly evolving semiconductor industry. Due to the limitations of funds and talents, its technical level and production capacity are relatively low, making it difficult for products to compete with international brands. At the same time, SMIC is also facing the challenge of competition from other local companies due to the increasing pressure of global competition.
Specifically, public data shows that SMIC's revenue last year was only $49.5 billion, which is at a disadvantage compared to TSMC's $55 billion. From the perspective of business areas, SMIC's market is mainly concentrated in the mainland, which is far behind TSMC's global market situation.
SMIC's future prospects
Although SMIC is currently facing great difficulties, it believes that with the continuous development of China's semiconductor industry, its future prospects are still very broad.
First of all, with the Chinese government's attention and support in the semiconductor field, local companies such as SMIC will receive more support in terms of capital, technology and talent. This will also help to improve its technical level and production capacity, improve product quality and market competitiveness.
Second, the increasing share of Chinese companies in the global semiconductor supply chain has also brought more business opportunities to SMIC. In addition, with the rapid development of 5G, artificial intelligence and other fields, SMIC's demand for chip design and manufacturing will also increase significantly, providing strong impetus and support for its future development.
epilogue
The semiconductor industry is an area of opportunity and challenge. Although TSMC is still a leading player in the world, local companies such as SMIC still have great potential for development. With the continuous changes in the policy environment and market demand, it is believed that the future of Chinese semiconductor companies will become more and more beautiful, and it will also inject new impetus into the development of the global semiconductor industry.
In recent years, the semiconductor industry is becoming an important area of global technological competition. However, a frustrating fact for many is that Taiwanese semiconductor maker TSMC made more than 55 billion yuan in profits from Chinese mainland investment projects, while Chinese mainland semiconductor maker SMIC generated revenue of only 49.5 billion yuan last year. This data reflects the current difficulties of Chinese mainland semiconductor manufacturing industry in the global semiconductor market.
The gap between TSMC and SMIC
As the world's largest semiconductor foundry, TSMC has always been one of the important players in the global semiconductor industry. According to reports, since its inception in 1998, TSMC has invested about 15 billion yuan in Chinese mainland, including several manufacturing bases in Shanghai, Nanjing, Suzhou and other places. At the same time, TSMC has also acquired a number of semiconductor companies in Chinese mainland through mergers and acquisitions.
Since 2017, TSMC's revenue growth has shown explosive growth. In 2017, the global semiconductor market reached $412.5 billion, while TSMC's revenue increased by more than 13%. In addition, TSMC's profit in 2018 reached 107.4 billion yuan, of which nearly half came from the Chinese market.
At the same time, as one of the representatives of Chinese mainland semiconductor manufacturing, SMIC's position in the global market is not very high. Although SMIC is the first integrated circuit manufacturer in China to successfully implement the 14nm logic process and is also involved in the research and development of 5G network technology, its share of the global semiconductor market is still very limited. According to statistics, SMIC's revenue last year was only 49.5 billion yuan, ranking second among Chinese mainland semiconductor manufacturers.
The problem
There are many reasons for this phenomenon, including the policy environment, talent training and other factors. Here are some of the main reasons I think:
First of all, Chinese mainland infrastructure construction and technology research and development in the semiconductor field are relatively lagging behind. Although the Chinese mainland government has formulated a series of policies to support the semiconductor industry, due to its late start, its infrastructure and technology research and development are far behind semiconductor manufacturing in Taiwan, South Korea and other places.
Secondly, the shortage of talents is also a bottleneck in the development of the Chinese mainland semiconductor industry. Since the semiconductor industry requires high specialization and technology, this requires enterprises to invest in talent training and introduction for a long time. However, at present Chinese mainland talent training in this field is far from enough, especially the lack of high-end talents.
Finally, the Chinese mainland semiconductor industry and Taiwan, South Korea and other places semiconductor manufacturing competition pressure is also relatively large. Although the Chinese mainland government has introduced a series of support policies, these policies often cannot fully compensate for the adverse effects of differences in wages and industrial chains.
Looking to the future
Although the current Chinese mainland semiconductor industry is facing many problems, the development potential of the semiconductor industry in the future is still very huge. In order to solve the current dilemma, Chinese mainland needs to take more aggressive measures in the semiconductor field to improve its technology and market competitiveness.
First of all, Chinese mainland need to strengthen policy support to promote the development of the semiconductor industry. In addition, Chinese mainland should also increase investment in talent training and introduction to attract more high-precision talents to join the semiconductor field.
Second, Chinese mainland need to accelerate the improvement of the industrial chain. At present, Chinese mainland still have defects in some links of the semiconductor industry chain, which also restricts its competitiveness in the global market. Therefore, Chinese mainland need to accelerate the construction of the industrial chain, especially in advanced processes and materials.
Finally, Chinese mainland need to strengthen cooperation with foreign semiconductor manufacturers. For a long time, independent research and development and manufacturing have remained the main way for China's semiconductor industry. However, cooperation with foreign semiconductor manufacturers can help Chinese mainland achieve technological progress and industrial upgrading faster.
In short, the Chinese mainland semiconductor industry faces great challenges in the global market. However, as long as under the promotion of the government, enterprises strengthen their own construction, accelerate technological innovation and industrial chain construction, and actively participate in international cooperation, they are expected to achieve rapid development. It is believed that in the future, the Chinese mainland semiconductor industry will occupy a more important position in the global market.