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TSMC and SMIC are both global chip foundry giants, but the chip market focus of the two layout is different, TSMC tends to high-end chip production capacity, while SMIC increases the production of mature chips such as 28nm.
SMIC can achieve up to 14nm chip mass production, but focuses on the production of 28nm chips, which is actually a big gamble, and it turns out that SMIC "bet right". Because TSMC has been continuously frustrated in the high-end chip market, demand has continued to decline, and it has reached the point of shrinking clothes and dieting.
To say that the company that feels the deepest decline in chip demand is TSMC, the demand for chips in recent years has risen to plummeted, TSMC can be said to have experienced roller coaster ups and downs.
When the demand was at its strongest, TSMC's production capacity was in short supply, announcing $100 billion to expand production, successively announcing plans to build new factories in the United States and Japan, and increasing investment in overseas markets, just to better meet market demand.
Now TSMC has a large amount of production capacity, but there are not enough orders, because consumer electronics demand has suffered weakness, TSMC has been cut by large customers, and capacity utilization continues to decline.
TSMC completely showdown, decided to suspend the expansion plan in Taiwan, many 28nm equipment orders were canceled, and also planned to cut 40% of EUV lithography machine orders in 2024.
Not only that, TSMC cut capital expenditures, and the compensation of employees only increased by 4% to 5%, originally TSMC employees' compensation increased by 10% last year, this year's increase made employees a little dissatisfied, complaining that they were too stingy.
TSMC has lived such a hard life, how has the demand for the chip market changed? The clue can be seen from the number of integrated circuit imports in China. China's imports of integrated circuits fell by 97 billion last year, and from January to March this year, the number of imports decreased again to 32.1 billion.
Overall, from last year to March this year, the cumulative reduction of about 130 billion chips.
Such a large number of chips can already feed many chip giants, if the increase is the number of chip imports, it can ensure that TSMC's revenue this year reaches a new high, breaking historical records are possible. But the reality is that Chinese mainland the number of chip imports in the market is in a downward trend, it is impossible to guarantee TSMC's revenue performance.
Sure enough, TSMC's revenue in March this year was only 32.6 billion yuan, down 15.4% year-on-year. Such performance happened to TSMC, which can only show that TSMC is suffering from the side effects of declining demand. How is SMIC, also a chip manufacturing giant, doing?
Unlike TSMC's declining revenue, SMIC achieved a sharp increase in performance.
Last year, SMIC's revenue was 49.516 billion yuan, up 39% year-on-year. At present, SMIC has not announced revenue in the first quarter of this year, so the specific operation situation is not known for the time being, but it is likely to continue last year's excellent performance and maintain a significant year-on-year growth.
Some foreign media said that foreign media: SMIC "bet right". SMIC's excellent performance is inseparable from the strong demand for 28nm mature chips.
Because this chip strikes a good balance between performance and power consumption. They can be used in various application fields, such as consumer electronics, communications, industrial control, etc. Especially in the mobile device market, 28nm chips are in great demand because they can provide excellent performance and long battery life, while the price is reasonable.
In addition, many emerging technologies, such as artificial intelligence and the Internet of Things, also require high-performance chips to support their development, so the demand for 28nm chips will continue to grow.
SMIC's choice of 28nm chip layout is based on strong demand. SMIC has four 12-inch wafer fabs under construction in Beijing, Shanghai, Tianjin and Shenzhen, which could add 4.32 million wafers per year to SMIC's annual wafers.
With SMIC's mastery of 28nm technology, the yield rate can reach the industry yield, that is, more than 95% of wafers meet production standards. Depending on the chip process and yield, a 12-inch wafer can cut about 500 chips, which is equivalent to SMIC's annual output of 2.1 billion more chips.
Of course, this is only theoretical data, and there will be various differences and changes in the actual situation, only for general reference. At least it can be confirmed that SMIC can increase the total production capacity of billions of chips in the future, which will be of great benefit to occupying the 28nm chip market.
While TSMC continues to promote the development of high-end chips, SMIC is also increasing the production of 28nm chips, although the process is not as good as high-end chips, but the market demand is more promising than high-end chips.
Today, SMIC has a very mature layout in the mature chip market, with strong technical strength and market expansion capabilities, and will become one of the important forces in the development of China's chip industry. It is expected that SMIC can achieve better performance in the mature chip market and lay a solid foundation for achieving the goal of 70% self-sufficiency rate of domestic chips.
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