Semiconductor showdown: TSMC, Intel, Samsung, Global Foundries, IBM, SMIC, and UMC
This thread is for people who are interested in semiconductors. I'll start with two posts about SMIC and TSMC's 16nm FinFET. Afterwards, I'll start analyzing the strengths and weaknesses of the various competing firms. Also, I will illuminate the reasons behind TSMC's current technological lead and evaluate the probability of other companies in closing the gap.
In essence, this thread will keep an eye on the semiconductor industry and keep track of who's winning or losing.
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SMIC is China's largest semiconductor manufacturer. Its future prospect looks really good.
Firstly, SMIC derives an astounding 40 percent of its revenue from China. With a strong home market, SMIC will continue to prosper as the Chinese economy grows at 7.5% annually.
Secondly, SMIC has caught up to Global Foundries, Samsung, and UMC at 28nm. This means SMIC is no longer confined to the low end of the semiconductor industry. SMIC can now compete at the middle of the market, which comprises the bulk of industry sales.
In October 2011, TSMC was the first foundry to mass manufacture wafers (and chips) at 28nm. TSMC was able to charge a premium for about two years until Global Foundries and Samsung caught up in technology and yield.
In January 2014, TSMC transitioned to a more advanced 20nm process. Currently, Qualcomm and Apple are paying a premium to mass manufacture chips with TSMC's 20nm technology. 28nm has become a commodity and no longer commands a premium.
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SMIC caps two-year turnaround with record-high earnings | South China Morning Post
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SMIC caps two-year turnaround with record-high earnings
by Bien Perez
19 February, 2014
SMIC's wafer foundry in Shanghai expects more orders for chips on the back of China's 4G mobile network expansion. (Photo: Bloomberg)
Semiconductor Manufacturing International Corp (SMIC), the mainland's largest contract chipmaker, expects business in its core mainland market to pick up later this year on the back of the country's 4G mobile network expansion and the growing adoption of smart cards.
"We expect more significant ramp-up in 2015," SMIC chief executive Chiu Tzu-yin said in a conference call with analysts yesterday.
The once-struggling, Shanghai-based company capped a remarkable two-year turnaround under Chiu when it reported record earnings for the 12 months to December.
Its net profit last year rose 660 per cent to a record US$173.2 million, from US$22.8 million in 2012, due to strong demand from customers on the mainland, increased wafer revenue and greater use of capacity at its chip fabrication plants.
Revenue increased about 22 per cent to a record US$2.07 billion from US$1.70 billion in 2012.
'China continues to be a leading source of high growth for SMIC,' Chiu said. 'In 2013, China accounted for 40.4 per cent of our total revenue.'
Mainland customers consist of domestic 'fabless' semiconductor companies, which design chips and outsource fabrication to semiconductor foundries like SMIC.
The company's biggest multinational customers include Texas Instruments and Qualcomm, which supply most of the essential semiconductors used in smartphones.
Inventory correction, however, saw SMIC post a 68.5 per cent year-on-year decline in fourth-quarter net profit to US$14.68 million. Revenue advanced 1.2 per cent to US$491.79 million.
In a research note, Bernstein Research forecast SMIC's 40/45-nanometre foundry process, which primarily makes chips for applications such as smartphones and media tablets, would contribute up to 25 per cent of total revenue this year, compared with 13 per cent last year.
Bernstein said it expected further growth for SMIC to come from capacity expansion. Last June, SMIC formed a US$3.6 billion joint venture with Beijing's municipal government to build a new chip fabrication plant in the capital.
SMIC's capital expenditure this year will reach US$880 million, of which US$570 million will be for the Beijing project."
