TSMC: No Plans to Buy Rivals at The Momentby Anton Shilov on April 22, 2019 4:00 PM EST
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Although TSMC expects demand for chips to increase going forward and despite an ongoing trend towards consolidation on the foundry market, the company has commented that it currently has no plans to make acquisitions to boost its production capacities.
In commentary on its Q1 fiscal results, TSMC's CEO, C. C. Wei, fielded a question on the subject.
“We don't have a plan right now,” said C. C. Wei, vice chairman and CEO of TSMC. “Of course, if there is a good opportunity or everything that meet our strategy, we will consider, but we don't have any plan of M&A right now.”
Being the world’s largest contract maker of semiconductors, TSMC is determined to maintain its lead both in terms of advanced process technologies and in terms of manufacturing capacities it owns. The company is gaining share on multiple markets right now and naturally expects demands for its services to grow in the coming years. Throughout its history, the company acquired production capacities from its rivals to cope with demand. In fact, its subsidiary Vanguard International Semiconductor (VIS) acquired a fab from GlobalFoundries in Singapore earlier this year. In the meantime, this is not the case for TSMC now and the company does not have an M&A plans in place.
At present TSMC and Samsung are the only foundries to offer their clients process technologies that use extreme ultraviolet lithography (EUVL). It remains to be seen when and if its rivals like SMIC or UMC offer something similar to their customers. As a result, TSMC will continue to gain share among customers who need leading edge process technologies (CPUs, GPUs, mobile SoCs, etc.) and therefore will need production capacities. Meanwhile, the company plans to rely solely on its own fabs rather than acquire rivals.
- TSMC Starts to Build Fab 18: 5 nm, Volume Production in Early 2020
- TSMC’s 5nm EUV Making Progress: PDK, DRM, EDA Tools, 3rd Party IP Ready
- TSMC: 7nm Now Biggest Share of Revenue
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FreckledTrout - Monday, April 22, 2019 - linkAre some people expecting consolidation? I would imagine if TSMC and Samsung keep going the way they are they might be the only two foundry players plus Intel doing its own thing but It won't because they consolidate its because they put other foundries out of business. They are both building new fondires for new processes and they are both leading edge which also means they have old fandries for old processes so why would they merge/acquire any other foundry?
Gondalf - Tuesday, April 23, 2019 - linkExpecially now that the revenue is down, they do not need of more capacity. A lot of customers are very happy on 14nm, 12nm or 11nm.
They can push the marketing a lot on 7nm or 5nm, the realty these processes too expensive right now, not a big deal in high power SKUs, a delusion on SOCs with lower power advantages as the process shrink.
I have friends with last 7nm devices on their phones, yes there have few more feature but the batteries last short. 7nm and almost for sure 5nm do not give what they promise and many customers are avoiding them.
So TSMC better stay with actual clean room space.
yannigr2 - Tuesday, April 23, 2019 - link7nm and 5nm probably do offer substantial gains. But manufacturers probably choose performance over efficiency, in hi end smartphones and not to forget that screens eat probably the most power anyway in a smartphone.
eastcoast_pete - Tuesday, April 23, 2019 - linkIf nothing else, they're still busy paying off the multi-billion $ loans they had to take out to build their 7 nm fab. The recent slump they saw, also due to low demand for their 10 nm capacity, makes any acquisition quite unattractive.