According to a report by TechNews, TSMC’s Arizona-based Fab21, currently in the intensive equipment installation phase, has initiated the construction of a small-scale trial production line. With a small amount of equipment expected from multiple supply chain by the end of 2023, industry sources suggest that Fab21 is planning to commence trial production in the first quarter of 2024.

The reason behind TSMC’s anticipated trial production in the first quarter of 2024 stems from orders from its U.S. clients. Market reports indicate that among Fab21’s U.S. clients, in addition to major players like , NVIDIA CEO Jensen Huang has not ruled out placing orders with Fab21. Furthermore, there are indications that Intel, planning to outsource core computing to TSMC’s N3B process, is likely to place orders to Fab21 in the near future.

However, due to cost considerations, despite the commencement of a small-scale trial production line, the initial capacity increase for Fab21’s 4-nanometer process will not accelerate. This situation is expected to persist into the subsequent second phase of the 3-nanometer production line.

Looking back at TSMC’s progress in Arizona, the company announced the construction of the 12-inch wafer Fab21 in Arizona back in 2020, anticipating the commencement of formal equipment installation in the first quarter of 2024 and official mass production before the end of 2024. The initial phase of Fab21 will produce on the 5-nanometer process, with a monthly production capacity of 20,000 wafers.

TSMC later upgraded the initial processs from 5-nanometer to 4-nanometer. However, due to a shortage of skilled installation workers in the region, TSMC postponed the mass production start date to 2025.

In addition, the second phase of the project is currently slated for mass production in 2026, introducing the 3-nanometer process. The total investment for both phases amounts to $40 billion.

Industry sources also acknowledge that Fab21’s manufacturing costs are high, and its capacity cannot compete with TSMC’s fab in Taiwan, making U.S. client orders primarily a response to U.S. government requirements, with the majority of production still centered in Taiwan.

(Image: TSMC)

As TSMC, Samsung, and Intel compete fiercely in the race for 2nm advanced processes, a new wave of the “battle for crucial equipment” is simultaneously unfolding.

According to South Korean reports, ASML, the leader in semiconductor advanced lithography equipment, plans to manufacture ten equipment capable of producing 2nm chips next year, while aiming to increase its annual production capacity to 20 devices in the coming years.

Intel has secured up to six of the 10, taking the lead, while Samsung is also actively pursuing the procurement of the equipment. TSMC faces significant pressure in this competitive landscape.

South Korean tech media SamMobile has unveiled that as major semiconductor manufacturers announce plans to start producing 2nm chips in 2025, ASML is set to unveil equipment capable of manufacturing chips using the 2nm process in the coming months.

The latest extreme ultraviolet (EUV) lithography equipment is expected to increase the numerical aperture (NA) from 0.33 to 0.55. This enhancement improves the light-collecting capability of the optical system, enabling semiconductor fabs to utilize advanced patterning techniques for the production of 2nm process chips.

ASML is the sole global manufacturer of advanced EUV equipment for processes at 7nm. These equipment are not only expensive, costing several million dollars each, but they also have limited production capacity.

It has led to high demand from major semiconductor manufacturers like Samsung, Intel, and TSMC. Currently, only five chipmakers globally, including TSMC, Samsung, SK Hynix, Intel, and Micron, require EUV equipment, with TSMC accounting for 70% of EUV purchases.

Consequently, Samsung is actively pursuing collaboration and has signed a historic agreement with ASML to jointly invest KRW 1 trillion (approximately USD 755 million) in establishing a research and development facility in South Korea.

This collaboration aims to contribute to the development of Samsung’s 2nm process. Samsung plans to commence the production of 2nm process chips by the end of 2025 after acquiring the 2nm manufacturing equipment.

Samsung Electronics Vice Chairman Kyung Kye-hyun, who heads the Device Solutions Division, emphasized that the new agreement with ASML will assist Samsung in acquiring the next-generation high NA EUV equipment.

Kyung said, “Samsung has secured a priority over the High-NA equipment technology. (From the trip), I believe we created an opportunity for us to optimize the usage of High-NA technology for our production of DRAM memory chips and logic chips in the long term.”

On the Intel front, as part of its IDM 2.0 strategy, it is executing a 5 nodes in four years process development plan. Intel emphasizes that its Intel 20A process is progressing towards volume production readiness as planned, while the Intel 18A process is scheduled to test production phase in the first quarter of next year.

Facing the strong competition from Samsung and Intel, TSMC is not sitting idle. According to reports citing from Financial Times, TSMC has showcased its 2nm prototype test results to major clients like Apple and NVIDIA.

TSMC previously mentioned in its earnings call that it expects the 2nm process to enter mass production as scheduled in 2025. The company’s 2nm backside power rail solution is scheduled for the latter half of 2025, with mass production slated for 2026.

Read more

• [News] Samsung’s Discount Strategy Challenges TSMC as the Battle for 2nm Orders Heats Up
• [News] Samsung, ASML Invest KRW 1 Trillion in Korean Research Fab as Netherlands-Korea Semiconductor Alliance Formed

(Photo credit: ASML)

TSMC announced yesterday that Chairman Mark Liu will retire after the shareholders’ meeting in June 2024, and it is possible that CEO C.C. Wei will succeed him as chairman, according to TechNews.

While the news shocked the industry, insiders see it as somewhat expected. As early as March this year, the Taiwan Semiconductor Industry Association (TSIA) elected its 14th board of directors and appointed a new chairman, with TSMC’s Senior Vice President Dr. Cliff Hou taking over the position previously held by Mark Liu, who had served two terms as chairman of TSIA. This move was seen as a possible precursor to Mark Liu’s retirement and succession planning.

Apart from being close to 70 years old, Mark Liu’s retirement is rumored to be related to issues with TSMC’s progress in the United States. TSMC’s Arizona plant previously faced a shortage of skilled equipment installation workers, prompting TSMC to consider sending 500 Taiwanese technicians to assist.

However, locals interpreted this move as an attempt to introduce low-cost labor and compete for local jobs, leading to a standoff between TSMC and the local labor union.

On the other hand, while progress in TSMC’s Japanese factory is relatively smooth, there are reports indicating significant differences between TSMC’s management style and the customary Japanese approach, prompting locals to express discomfort, stating “not accustomed.”

Therefore, how TSMC continues to operate its overseas facilities after Mark Liu’s retirement next year poses a significant challenge.

Industry sources believe that TSMC’s biggest challenge lies in “culture.” Whether operating in the United States or Japan, it requires understanding and operating from the standpoint and perspective of the other party’s culture for smooth cultural integration.

It’s not surprising that Mark Liu mentioned the challenges of setting up plant in the United States, stating that Taiwan cannot only manage Taiwanese people; we must be able to manage people from around the world.

Additionally, international management requires an understanding of local culture, including language and management. In the future, TSMC will need to learn how to manage young talent, explaining “why” rather than following the traditional Taiwanese manufacturing approach of “you do what you are told.”

Mark Liu also mentioned before that TSMC is currently in the early stages of learning. The primary goal is to effectively manage factories, cultivate management team, and “every place has its way of doing things, which is what our management team needs to face.”

However, with TSMC facing the imminent retirement of Mark Liu and the sole leadership transition to C.C.Wei, how he will lead TSMC in effectively managing a global workforce will be the key focus in the industry.

(Photo credit: TSMC)

TSMC today announced that its Chairman Dr. Mark Liu has decided not to seek the nomination of TSMC board membership for the next term and will retire from the Company after the 2024 Annual Shareholders Meeting.

TSMC’s Nominating, Corporate Governance and Sustainability Committee of the board recommends vice chairman Dr. C.C. Wei succeed as the company’s next Chairman, subject to the election of the incoming board in June 2024.

According to the news released by TSMC, Dr. Mark Liu joined TSMC in 1993 and assumed the role of chairman after Founder Dr. Morris Chang’s retirement since June 2018. During his tenure, Dr. Mark Liu has reaffirmed the Company’s commitment to its mission and focused on enhancing corporate governance and competitiveness particularly in technology leadership, digital excellence, and global footprint.

Dr.Liu indicated that, “The past 30 years with TSMC has been an extraordinary journey for me. I want to extend my sincerest thanks to our incredibly talented team who made the company the global leader it is today,” said TSMC Chairman Dr. Mark Liu. “It has been a privilege to serve as Chairman after our legendary Founder Dr. Morris Chang for such a world-renowned enterprise.”

Dr. Liu De-Yin further explained, “I now would like to give my decades of semiconductor experience to other use, spend more time with my family, and start the next chapter of my life. I will continue to oversee the corporate governance with the Board diligently until the last day of this term. I am confident that TSMC will continue to perform outstandingly in the years to come.”

(Photo credit: TSMC)

Following Intel’s move to split its outsourced foundry model, TSMC is gearing up to expand its advanced manufacturing processes in Taiwan, ready to face the competition head-on.

According to China Time’s report, following the equipment first tool-in at the 2nm fab in Baoshan scheduled for April next year, industry sources suggest a high likelihood of the 1.4nm fab being established in the second phase of the Central Taiwan Science Park.

Additionally, TSMC is actively expanding its CoWoS process and considering the construction of its 7th advanced packaging and testing plant in the central region, with Chiayi Science Park and Yunlin actively under consideration.

Semiconductor industry insiders point out that TSMC is beginning to feel the pressure, and this year, founder Morris Chang’s main concern regarding competition has shifted from Samsung to the resurgent Intel.

Starting from the second quarter of next year, Intel, a rival of TSMC, plans to separately disclose financial reports for chip development and Intel Foundry Services (IFS), implementing its internal foundry outsourcing model.

Intel’s move aims to protect the assets and know-how of third-party customers. Coupled with international chip design firms gradually releasing orders to Intel due to diversified supply chain concerns, it shows that Intel’s outsourcing strategy is gradually proving effective.

Intel’s recent successes in foundry processes, including the PowerVia backside power delivery technology, glass substrates and Foveros Direct for advanced packaging.

According to TrendForce’s 3Q23 Ranking of  Global Top10 Foundries by Revenue, Intel’s foundry business has entered the global top 10 for the first time, ranking ninth with the industry’s fastest quarterly growth.

Confronted with growing competition from Intel, TSMC is intensifying its efforts and accelerating the construction of advanced process production capacity. The recent expansion plans are becoming clearer, with the 1.4nm fab likely located in the second phase of the Central Taiwan Science Park, aligning with the ongoing increase in demand for advanced packaging.

Read more

• Top 10 Foundries Experience 7.9% QoQ Growth in 3Q23, with a Continued Upward Trend Predicted for Q4, Says TrendForce
• [News] Semiconductor Giants Vie for 2nm Supremacy as TSMC Expected to Lead Amid Intensifying Competition

(Photo credit: TSMC)