Intel Is No Longer The Leader. TSMC Became The World's Largest Processor Manufacturer
TSMC has become a global leader in the contract semiconductor manufacturing segment, taking almost 52% of the market. It has overtaken Intel, including in terms of capitalization, and its success is due to the growth in the share price, provoked, among other things, by information about a breakthrough in the development of ultra-modern 2-nanometer production standards.
New world leader
Taiwan Semiconductor Manufacturing Company (TSMC) is recognized as the largest manufacturer of semiconductor products in the world. This was reported by the TechPowerUp portal.
According to the publication, TSMC became the leader in its segment after its shares rose in price, reaching a peak of $66.4 per security. As a result, its capitalization reached $313 billion, which allowed TSMC to leave far behind not only Intel but also Nvidia.
Comparison with Nvidia, one of the largest developers of video chips, is caused by the fact that in early July 2020, It overtook Intel in capitalization. It was helped to do this, as in the case of TSMC, by a sharp jump in the share price. By the way, Nvidia is included in the list of TSMC's main customers – it does not have its factories, and all its GPUs are produced at the facilities of a Taiwanese vendor.
More than half of the market
According to research by the analytical company TrendForce, as of July 2020, TSMC held 51.9% of the market for contract manufacturing of semiconductor products. At the end of 2019, the company generated a record of 1.07 trillion Taiwan dollars (approximately $34.63 billion). This number is a 3.7% increase compared to 2018, and about 49% of all its sales in 2019 were for smartphone processors. This segment showed a 12 percent increase in revenue. In second place in terms of sales was the production of high – performance computing (HPC) solutions-their share was 29%.
Intel's revenue for the same period, for comparison, was $72 billion. It is noticeably larger than TSMC, but its growth against the background of 2018 indicators was only 2 percent.
In mid-July 2020, TSMC reported a new record of growth in its quarterly net profit for the second quarter of 2020. For the period from April 1 to June 30, 2020, the company's net profit was 120.82 billion Taiwan dollars ($4.1 billion), which is 3.3% more than in the first quarter of 2020 or 81% more than in the second quarter of 2019.
TSMC's quarterly revenue reached 310.7 billion Taiwan dollars ($10.38 billion). Over the year, this figure increased by 28.9%.
The rapid growth in the share price, and with it, the capitalization, was the result of TSMC management's attitude to new technologies. The company regularly invests in research and development in its segment and constantly develops new technologies for the production of semiconductors, ahead of all existing competitors in this regard.
At the time of publication, TSMC was fully ready for mass production of 5-nanometer chips, and in this regard, only Samsung is catching up with it, while Intel has not been able to fully master the 10-nanometer standards since August 2019.
In addition to Nvidia, TSMC's client list includes AMD, Apple, Huawei (which will be discontinued in September 2020), MediaTek, Qualcomm, and others. Most companies on this list will be able to expect to produce their 5-nanometer chips in the foreseeable future.
In July mid-July 2020, TSMC was almost ready to start mastering the most modern technological process by the standards of 2020 – 2 nm. The start of pilot production, according to the standards, is planned for the period between 2023 and 2024; this will be preceded by the company's transition to 3 nanometers – test production of this technology should begin in the first half of 2021, and mass production of chips – in the second half of 2022.
TSMC's global expansion
TSMC's plans for the next few years include gradual consolidation outside of Taiwan. In mid-may 2020, after much persuasion from the American government, it agreed to build its plant in the United States.
TSMC will build a new factory in Arizona. The exact location of its location at the time of publication of the material was not established, but it is known that the company will spend $12 billion on its construction. This amount TSMC intends to invest gradually – it is going to spend it in the period from 2021 to 2029. Most likely, the plant will be launched in parts – the company is preparing to start its first production no later than 2024.
In July 2020, Reuters reported on the vendor's plans to cooperate with the Japanese authorities. Currently, the parties are negotiating the development of semiconductor production in this country.
The negotiations were initiated by the authorities Of the country of the rising sun. If they are successfully completed, TSMC will open up access to some of its technologies to Japanese manufacturers, as well as consider building its factory in Japan.