The importance of TSMC in the global supply chain is evident from the intensification of the Sino-US technology war last year and the recent shortage of automotive chips, which has caused a furore in the foreign media, describing the global reliance on “made in Taiwan” for chips. The reliance on “made in Taiwan” has reached a “dangerous point”.
Japanese Minister of Economy, Trade and Industry Hiroshi Kajiyama confirmed on Tuesday that he is urging Taiwan authorities through the Japan-Taiwan Exchange Association to request Taiwan chip makers to increase production of automotive chips. At present, Japan’s largest enterprise in terms of market capitalization is Toyota, and Honda and Nissan’s cars are all over the streets of the world, it is not difficult to imagine what Japan is in a hurry. Kazumi Nishikawa, director of the Ministry of Economy, Trade and Industry’s Information Industry Division, said bluntly that “TSMC’s increasing dominance (of semiconductor supply) is something that the chip industry must find a way to deal with.
Nowadays, technology is changing rapidly, and the “chip content” of the economy is increasing day by day. The President of the European Union Chamber of Commerce in China, Mr. Woodcock, warned that geopolitical tensions such as export controls and government interventions indicate that chip shortages may occur frequently in the future, and the supply chain may be suddenly disrupted due to factors other than production capacity. French think tank Institut Montaigne worries that if the mainland moves against Taiwan, “there is no reason to leave the local wafer fabs unscathed,” so it is in the global interest to protect the world’s most advanced wafer capacity.
In fact, Woodcock’s concerns are reflected in a 145 billion euro investment agreement signed last month by 17 EU countries, led by Germany, France and the Netherlands. The parties will work together to invest in the design and production of processors and semiconductors, while striving to import even TSMC has not announced the development schedule of the cutting-edge 2nm process, and its statement directly said that the event is about the sovereignty and competitiveness of European technology.
South Korea’s Samsung Electronics, which seeks to replace TSMC’s dominant position as a chip foundry, is rumored to be recently restructuring its automotive semiconductor division to strengthen its technological capabilities in the automotive sector, and has expanded its cooperation with an American electric vehicle company to develop self-driving car chips for the other side with a 5nm process, threatening to attract more car manufacturers to cooperate with Samsung.
However, South Korea is located in the Korean Peninsula is another “powder keg” in East Asia outside the Taiwan Strait. The British media therefore described the chip production capacity of South Korea and Taiwan as the “21st century Strait of Hormuz”. At present, 30% of the world’s Crude Oil transported by sea must pass through Iran to the Strait of Hormuz connecting the Persian Gulf and the Gulf of Oman, the security of the route is a matter of energy supply and global economic security.
The famous hedge fund manager Loeb sniped the old semiconductor store Intel (Intel), also indicated that if Intel does not immediately reform, fear of endangering the security of the United States cutting-edge semiconductor supply, forcing the country’s computers, data centers and critical infrastructure, etc., increasingly dependent on the “geopolitical instability” of the East Asian region to provide components.
According to the U.S. House of Representatives Foreign Relations Committee, Intel may hand over the chip to TSMC for manufacturing, indicating that the United States needs a local company that can produce cutting-edge chips. However, the only U.S. chipmaker that can enter the 10nm process or below is Intel.
TSMC is rumored to raise the price of its wafers by another 15%.
The “lack of core” in the automotive industry is still fermenting, and global car manufacturers are facing huge difficulties due to the shortage of chips, which also makes the chip industry regain control of the pricing power of automotive chips. It is rumored that TSMC and other Taiwan chip makers are considering to raise the price of automotive chips by 15% again.
Foreign media reported that TSMC’s World Advanced, UMC and other Taiwanese companies are considering a phased increase in wafer prices between late February and March. In fact, last fall, in response to additional orders and rush orders from car manufacturers to increase production, Taiwanese companies have raised wafer prices by 10 to 15%. It is reported that local wafer foundries have negotiated price increases to automotive wafer makers and requested price increases from car makers.
The report quoted UMC’s chief financial officer Liu Qidong as saying that he could not comment on chip prices, but on the level of supply and demand, Taiwan chip makers are indeed in a favorable position. Earlier, the German, U.S. and Japanese governments made rare requests to Taiwan authorities to increase production, while the NTD-USD exchange rate has appreciated nearly 6 percent in the past year, which is also the reason for Taiwanese companies to consider wafer price increases.
In the wafer foundry production capacity exceeds demand, TSMC is rumored to be actively squeezing out the 8-inch wafer capacity required for automotive wafers, and will list Infineon, Texas Instruments, NXP, Renesas Electronics and other international automotive wafer makers as “prime supply targets” to help solve the problem of production line shutdowns faced by global car manufacturers.
Comprehensive industry analysis shows that automotive chips have high requirements for reliability and durability, but do not need to be produced with the most advanced processes, so there is more than enough to cast in 8-inch wafers. If TSMC allocates part of its 8-inch wafer capacity to produce automotive wafers, it may affect the production of some non-automotive wafers, and it will be difficult to avoid a “price hike” in the market.
TSMC said that the company will give priority to meet the current global shortage of automotive wafer demand and continue to work closely with automotive electronics customers, while maintaining its commitment to other customers.
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