On September 26, IC Insights released the latest report, indicating that TSMC's 7nm process demand growth and tight supply, so that this absolutely leading wafer foundry set off a sales boom in the second half of 2019.
IC Insights said that TSMC's significant investment in advanced wafer fabrication technology will bring significant returns. The chart below shows the latest outlook for TSMC's sales in 2019.
As shown in the chart, according to IC Insights, TSMC's current annual sales have been flat with 2018, but its sales in the second half of the year are expected to increase by 32% compared with the first half of the year, while the growth rate of the entire IC industry is only 10%. . There is no doubt that the 7nm application processor powered by Apple and Huawei's new smartphone is driving TSMC's strong sales growth in the second half of the year.
According to the report, TSMC's sales under 40nm for the whole year of 2019 are seven times the total sales of Greencore, UMC and SMIC ($22.9 billion vs. $3.2 billion), which indicates that TSMC is in pure crystal. The dominant position in the field of foundry.
It is understood that SMIC began to produce 28nm process in the fourth quarter of 2015, and TSMC produced the 28nm process as early as 2011. Today, SMIC announced that it will receive meaningful revenue from its new 14nm FinFET technology in the fourth quarter of this year and introduce 12nm FinFET technology in 2020. At this similar node, it still lags behind TSMC for about three years.
IC Insights pointed out that it is estimated that 66% of TSMC's sales this year will come from processes below 40nm, and this year's 7nm contribution revenue is expected to reach 8.9 billion US dollars, accounting for 26% of its total sales in 2019, accounting for its number 33% of revenue in the fourth quarter (thanks to Apple and Huawei's two major customers).
In addition, TSMC's customers have accelerated the pace of adopting advanced process technology. IC Insights said that TSMC's 40-45nm technology revenue accounted for more than 20% in 8 quarters, 28nm process also used 5 quarters, and 7nm process took only 3 quarters to account for more than 20% of quarterly revenue. .
In fact, TSMC's 20nm, 14nm and 10nm technology contributions accounted for more than 20% of total sales in three quarters. Surprisingly, the company insists on the growth of its 5nm technology, which will be faster than its 7nm process. According to previous reports from the micro-network, TSMC's 5nm process has five major customers: Apple, Huawei, AMD, Xilinx and Bitland.
However, strong demand for advanced nodes in the industry has led to tight supply and extended lead times. AMD recently announced that the Ryzen 9 3950X processor, which was scheduled to be released at the end of September, will be rolled out in November. Although AMD did not disclose the reason for the new product being "late", the 3950X uses TSMC 7nm production. The industry believes that it should be fully loaded with TSMC 7nm. Supply is in short supply.
In the second half of this year, TSMC will not only be fully loaded with 7nm and the second-generation 7nm capacity, but even 16nm and 12nm will be in short supply. IC Insights, TSMC has plans to allocate more funds to expand the capacity of advanced processes.