I don't follow what you said. Care to elaborate?
Chinese semiconductor industry
- Thread starter Hendrik_2000
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Sir TSMC derived 26% of its profit from 7nm node, with restriction and the downturn shifting to 28nm maybe to late as the Chinese may commoditized that segment.
Official answer of China Semiconductor Industry Association:
"Not only such unilateral measure will harm further the global supply chain of semiconductor industry, more importantly it will create an atmosphere of uncertainty, which will negatively affect the trust, goodwill, and spirit of cooperation that the players of the global semiconductor industry has carefully cultivated over the past decades."
Fully agree with them. Very sadly semiconductor world is quickly going into block confrontation. It is noteworthy that also the real cold war was started by a Democrat, on March 12, 1947, with the famous , the basis of American foreign policy around the world since then, and still full in force today.
Difference is, today we don't have a real president to assert this hard line policy, but a bunch of faceless officials hiding behind a senile old man. They are the expression of the real power that owns US foreign policy since WW2, well beyond and above any political party or politician.
"Not only such unilateral measure will harm further the global supply chain of semiconductor industry, more importantly it will create an atmosphere of uncertainty, which will negatively affect the trust, goodwill, and spirit of cooperation that the players of the global semiconductor industry has carefully cultivated over the past decades."
Fully agree with them. Very sadly semiconductor world is quickly going into block confrontation. It is noteworthy that also the real cold war was started by a Democrat, on March 12, 1947, with the famous , the basis of American foreign policy around the world since then, and still full in force today.
Difference is, today we don't have a real president to assert this hard line policy, but a bunch of faceless officials hiding behind a senile old man. They are the expression of the real power that owns US foreign policy since WW2, well beyond and above any political party or politician.
tsmc will not be immune to industry weakness for, according to them, for a few quarters until the middle of 2023. As such, tsmc being more conservative on CAPEx spending to maintain good balance sheet is understandable,
The key is they project 2023 to be another growth year and the Gross & Operating margin looks very healthy.
Weaker demand in 7nm is expected, but it sounds like this will be balanced out by strong demand in 5nm and 3nm. A weakness of significance will hit the top and bottom line. We don't see that happening. Like I said earlier, I believe tsmc will weather the storm better than others. tsmc has been pretty good at meeting their guidance, they know their business well. So if they say 2023 will be another growth year, I think this is a good sign....maybe not as a big a growth as some predicted earlier this year, but I think growth in 2023 is a good thing nevertheless.
It's been known since last year that there may be a patch of weakness in 2023 with most analyst predicting a single digit growth in 2023 when the growth in 2022 is in the mid teens. So the slow down was anticipated, it's not like it came out of the blue and surprised those in this in dusty.
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A true Manchurian Candidate...lol
I doubt the Chinese can commoditize 28nm when the total volume in China combined will probably not even be 1/3 of tsmc's 28nm capacity. tsmc's exposure to China is now at 8% in Q3 I think. How much more of that 8% can tsmc lose to make a difference?
SMIC's 28nm and tsmc's 28nm are also not at the same level. Given the choice, people are still paying a premium to buy 28nm from tsmc. So I don't see SMIC or HuaHong able to compete with tsmc on 28nm at the moment.
SMIC's decision to focus on 14nm & 28nm is not really by choice. I'm sure all else being equal, SMIC would not reject 7nm/5nm/3nm capability and business opportunity.
I there, thanks again for providing your article. I appreciate it so much to see such informative analysis. Just wondering, wouldn't it be most logical to predict that a lot of sales go to tel now that American companies can't sell to china anymore? That could offset the memory market downturn for them?
Also, how come amat estimated impact isn't higher given that they basically cant service the equipment they sold anymore.
I believe that China's market is big enough for both TSMC and SMIC for their 14nm and 28nm chips. And fear of sanctions will push Chinese users to domestic tools and chips even if they are of a lower quality. The lower cost and quality of SMIC chips are good enough for lower applications.
The sanctions has changed the calculus on IC matters in China. Without sanctions Chinese chips and toolmakers wouldn't stand a chance in the market. But now the market is wide open for them because the Americans has pulled themselves out and the demand is still there. So someone has to fill that void in the market.
Actually, I don't think most people here are talking about tsmc at all. Now, I think q3 revenue really isn't all that important since the slowdown is about future quarters as we have this slowdown in the worldwide economy.
Even if tsmc revenue goes up slightly, it will still have a lot of capacity coming online with reduced to flat demand around the world. The fact that they are producing 28 nm chips with their new plant is a good indication of current demand trend for advanced node. And all of this is despite the fact that Nvidia is over ordering GPUs to satisfy the Chinese demand before the bans go in effect. Just think what will happen in late 2023 when Nvidia no longer need this additional supply, Chinese chip designers all shift to smic and global economy is still in the dumpsters.
I would be long smic and short tsmc right now.
In the current push by us and china to produce their own chips, tsmc is likely a major loser.
Americans are making irrational decisions when it comes to China born out of fear. That fear in the years if not months ahead will turn into desperation as their economy will hit the skids. Which I think will be inevitable. Then people watch out! China and Russia are used to dealing with America from a position of weakness. But the US is not use to dealing with others from a position of weakness because they have been so strong for so long. Then they might start to do some really crazy things that is going to have unforeseen consequences for themselves and the world.
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