TSMC smashed 200 billion yuan and attacked 2nm!

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Author: animal production team leader source: official account: animal production team

Is it difficult to build a chip or an atomic bomb?

Today, I will give my answer: it is more difficult to build a chip than an atomic bomb.

The atomic bomb is like Mount Qomolangma. It stands there and will not rise or move. As long as you climb it, you will reach the top sooner or later. However, there are five hooligans guarding the only way to Mount Qomolangma, setting up a sign that reads: “nuclear non proliferation treaty.”


If we let go of the manufacture of atomic bombs, I believe that the number of countries on earth that can produce atomic bombs will at least quadruple.

Chips are different. Chips are open. Everyone depends on their abilities, but they follow the laws of industrial economy. This is an infinitely long marathon. There is no end, but the one in front can be the winner takes all. The first runner eats meat, the second runner drinks soup, and the third runner only eats earth. Eating dirt means bankruptcy, dismissal and exit.

The atomic bomb only depends on whether there is one, but the chip depends on whether it is world-class. The second rate is not good enough. The second rate will be choked. Enterprises that get stuck will suffocate or even die.

No enterprise knows this better than TSMC. TSMC understands better than any other enterprise that the chip field advocates “self-respect” and there is no “hand in hand”. Whoever comes first will eat the whole audience.

According to the data of futu Niuniu, the current market value of TSMC is US $482.8 billion, higher than that of Tencent holdings, which is US $449.7 billion, ranking first in China. TSMC is also the world’s largest chip foundry manufacturer.


Chip OEM is different from any other hardware OEM, and its technical content is the world’s top. Globally, there are only two companies that can OEM 5-nanometer chips, one is TSMC, the other is SamSung group. Among them, Samsung Group’s 5-nanometer advanced process chip OEM is mainly for its own use, and its external share is very small.

However, TSMC has not stopped at 5nm for a long time, and the chips with 4nm advanced manufacturing process have achieved mass production as early as the third quarter of 2021. TSMC will achieve mass production in August this year for chips with advanced process of 3nm.

However, this is far from enough. In order to completely shake off Samsung and further consolidate its absolute leading position in the field of chip manufacturing, TSMC has launched a 2-nanometer advanced process mass production plan. A few days ago, TSMC announced that it would invest NT $1trillion, equivalent to RMB 229billion, to build four new wafer factories in Hsinchu, Taiwan, to produce 2nm advanced process chips.


Weizhejia, President of TSMC, said at the performance conference in the first quarter of this year: “the development of 2nm is smooth. It is expected that the trial production will be realized in 2024 and the full mass production will be realized in 2025.”

Why is TSMC so rich and powerful that it dares to smash 229billion yuan in the 2-nanometer advanced manufacturing process? The reason is four words: rich, willful!

In the two years between 2020 and 2021, affected by the global core shortage, TSMC’s performance exploded. According to the analysis of FTU securities, in 2020, TSMC’s revenue per wafer was $1634, while SMIC’s revenue per wafer was $684 in the same period, which was only 41% of TSMC’s output value of a single wafer.


In terms of net profit, TSMC in 2020 was US $17.589 billion and SMIC was US $716million, which is a fraction of TSMC’s net profit. In 2021, TSMC’s net profit rose to US $21.357 billion, while SMIC’s was only US $1.702 billion. There is almost a cloud and mud difference between the two in terms of revenue and profit.

This gap comes from the gap of OEM technology. At present, the core foundry chip of SMIC is the 28nm process. The 14nm process has just achieved mass production and is still trying to catch up with the 12NM process. Benefiting from the low requirements for automotive chip production process, SMIC expanded its 28nm production line. However, in terms of OEM technology, the gap between SMIC and TSMC has not narrowed, but has widened.

TSMC has realized the mass production of 4nm advanced process chips, and is about to realize the mass production of 3nm advanced process chips. However, in the last two years, the production process of SMIC’s 7-nanometer process has not made significant progress.


With advanced OEM technology, TSMC has won 53% of the global chip market share and become a super giant in the global chip manufacturing field. In order to spread risks, TSMC has set up a 28nm process chip production line in Nanjing, a 22nm and 28nm process chip production line in Japan, a 5nm process chip production line in the United States, and the most advanced 3nm and 2nm process chip production plants in Taiwan, China.

Why is it more difficult to build a chip than an atomic bomb? Let’s compare SMIC with TSMC. In 2021, the revenue of SMIC was USD 5.443 billion, equivalent to RMB 35.631 billion, but that of TSMC was USD 56.832 billion, equivalent to RMB 359.185 billion in the same year.


With TSMC’s 229billion yuan invested in the 2-nanometer manufacturing process, it will take 6.5 years for all employees of SMIC not to eat, drink or get paid. However, TSMC only needs seven and a half months to earn the money after throwing it out, and there is almost no pressure on the cash flow of the enterprise.

This is not just the deadliest. If you are short of money, you can raise funds, and the national team can inject funds. However, the life cycle of a chip is very short. Take the world’s top 5-nanometer chips two years ago. Now TSMC has mass produced 4-nanometer chips, and 3-nanometer chips are about to start mass production. By 2023, the 5-nanometer chip will fall behind.

MediaTek’s 4 nm 5g chip has been released at the end of 2021, followed by Qualcomm’s new first 4 nm 5g flagship chip.


In the field of mobile phones, almost all flagship phones only choose the most advanced chips, which is a winner take all market. When 4nm becomes the mainstream, 5nm can only be used as a low configuration version with lower profit. Using the most advanced technology to make the most profit, and then investing the most in research and development to further master more advanced production technology is the root cause of TSMC’s growing strength.

SMIC ranks fifth in the global chip market, but the fourth ranked lattice core has abandoned the 7-nanometer advanced process.

The reason is that it can not catch up with TSMC. Even if the lattice core is invested heavily in the 7-nanometer process, when the lattice core is produced, TSMC may have entered the 2-nanometer era.

Gexin can’t eat meat or even a mouthful of soup, which will only consume money and waste time.

Many people think that TSMC is just a foundry, and its business is deeply affected by ASMC lithography. From the perspective of industrial chain, the relationship between TSMC and ASMC is by no means the relationship between Foxconn and apple.


TSMC needs ASMC, which also relies heavily on TSMC.

ASMC’s first immersion lithography machine came from TSMC’s Lao Lin benjian’s immersion lithography technology. Linbenjian is known as “the father of immersion lithography”. TSMC and ASMC are mutually successful, and ASMC is by no means holding TSMC by the neck.

The chip is a clear card. With the industrial upgrading, the technology continues to iterate. Compared with the static technology of the atomic bomb, the dynamic technology upgrading of the chip is the most difficult part.

As for the mainland, why does the United States dare to use the lithography machine to clamp Huawei’s neck?

Most people have overlooked a fundamental problem. Lithography machine can not be made in any country. It involves more than 2000 parts suppliers. Of the more than 2000 parts suppliers, any single one is an invisible champion.


However, among the more than 2000 invisible champions, there is no Chinese Mainland supplier.

This means that ASMA lithography will not be subject to any reverse sanctions from the Chinese Mainland when blocking Huawei. Because ASMA is 100% independent of Chinese Mainland.

This is not the backwardness of the lithography machine, but the overall backwardness of the lithography industry chain.

After more than 40 years of reform and opening up in China, we have entered the apple industry chain, the automobile industry chain, and the chip design and manufacturing industry chain. However, in the field of lithography, we have not cultivated an invisible champion, and no company has entered the supplier list of asmai.

It was as if we were playing by ourselves in an isolated island of the lithography machine.

Ukraine, which is being beaten up by Russia, supplies 70% of the neon gas for asmai lithography machine. After the outbreak of the war between Russia and Ukraine, neon immediately fell into a tight supply. It can be predicted that there will still be a continuous shortage of chips.


Samsung Group, which has just touched the 5nm process chip, has been thrown away by TSMC’s 4nm and 3nm.

Standing on the throne of chip OEM, TSMC strives for defeat alone.

In 2022, TSMC will continue to take all the world.

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