TSMC and other Asian chipmakers accelerate production increases to cope with global supply shortages.
TSMC and other Asian chipmakers are accelerating production increases to cope with global supply shortages. Japan’s Renesas Electronics is in talks to buy chip designer Dialog for $6 billion, while the Chinese Communist government’s hoarding of semiconductor manufacturing equipment is said to have ended up harming others and itself.
On Feb. 8, Japan’s Renesas Electronics said it was in talks to buy U.K.-based Dialog Semiconductor. The deal will enhance Renesas Electronics’ automotive chip business.
Under the potential deal, Renesas Electronics would acquire the Frankfurt, Germany-listed Dialog Semiconductor at a price of 67.5 euros per share.
Renesas Electronics said that statements about the parties’ negotiations do not necessarily mean the completion of the acquisition. Further announcements will be made as necessary, and there is no certainty about the company receiving a definitive offer or the terms of the acquisition.
Under U.K. financial regulations, Renesas Electronics must announce by March 7 whether it will launch an acquisition.
Renesas, which has a global market share of about 30 percent in automotive microcontrollers, has been seeking to increase its market share of analog chips used to process signals such as sound, light and temperature.
A global shortage of automotive chips has forced some automakers to scale back production plans. Recently, manufacturers such as General Motors and Honda Motor have closed their assembly lines due to shortages of chips for automotive use. At present, most of the 8-inch wafer production in the hands of Asian manufacturers, such factories are mostly used to produce automotive-related chips.
In addition, in Europe and the United States and other regions still implementing anti-Epidemic restrictions, orders for notebook computers and cell phones and other products have picked up.
China Semiconductor Manufacturing International announced plans last week to increase production capacity, 8-inch wafer capacity by 45,000 wafers per month. But the company said capacity may not be boosted soon because of the expected long lead Time for equipment purchases and because it is also grappling with supply chain disruptions caused by previous Trump (Trump) administration sanctions.
Recent conference calls from companies such as TSMC and South Korea’s SK Hynix have highlighted global concerns about chip shortages.
TSMC, the world’s largest foundry chipmaker, said it is accelerating production of automotive-related products through its fabs and reallocating wafer capacity, and the company now expects to increase capital expenditures for advanced chip production and development to $25-28 billion this year, an increase of up to 60% over 2020 capital expenditures.
Another Taiwanese chip maker, UMC Electronics, said it plans to spend $1.5 billion on new equipment this year, a 50% increase from last year’s $1 billion.
SK Hynix, the world’s second-largest storage (memory) chip maker, said it is accelerating its 8-inch wafer production to reduce costs.
And China last year from Taiwan and Japan, South Korea and other places to purchase up to $ 32 billion of semiconductor equipment, but the Australian journalist Craig Addison, who proposed the Silicon Shield (Silicon Shield) in 2001, pointed out that if the Chinese government wants to use this to prevent the U.S. sanctions, it is like buying Coke without knowing its recipe, falling to the detriment of others and themselves The result is that the Chinese government will end up harming itself and others.
Writing in the South China Morning Post, Addison said that hoarding semiconductor manufacturing equipment is like buying a Coke factory without knowing the recipe, not to mention that semiconductor equipment is far more complicated than the recipe for Coke. Semiconductor production covers special chemicals or gases, and even light waves have special requirements, and also requires highly skilled personnel, in order to complete everything.
Fujian Jinhua is a typical example of a company that got the most advanced equipment for manufacturing chips with the support of the Chinese Communist government, but in November 2018, after being blacklisted by the United States because of the Micron (Micron) theft case and the withdrawal of technical staff from manufacturers such as Applied Materials and Colin Research and Development (Lam Research) Fujian Jinhua has the best equipment, but has not even produced 1 piece of DRAM (dynamic random access memory).
Addison further pointed out that this practice not only hurts Chinese chip makers, but also increases the risk for overseas manufacturers. Because the semiconductor business itself is very cyclical, many manufacturers have had a hard time coming from the industry competition, only to see China’s big purchase, so that the Chinese chip industry expansion cycle more inflated. And many industry players are therefore more and more dependent on China, if the expansion breaks down, will face greater trouble.
Addison said China may now have no choice under U.S. sanctions. But if the Communist government really wants to stand on its own two feet, the only way to do that is to invest more money in research and development, but it will be a bumpy, stumbling growth process that will last more than a decade.
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