Monday, July 17, 2017
Taiwan Semiconductor Manufacturing Co. (TSMC) has recognized its first revenue from 10nm products, trailing Samsung, its main rival in the foundry business, by nearly four months.
TSMC said that 10 nm accounted for 1 percent of its overall revenue during the second quarter of this year. In March, Samsung announced its first 10-nm products, including the company’s Exynos 8895 SoC as well as Qualcomm's Snapdragon 835.
TSMC expects to exit a slump that saw its second-quarter sales in dollar terms edge up just 3.2 percent from the same period a year ago. The company, which makes mobile communications products for Apple and MediaTek, said that an inventory correction among fabless customers will probably end during third quarter this year.
“We forecast our third-quarter revenue will grow by 15.7 percent quarter on quarter,” said TSMC Co-CEO Mark Liu at an event in Taipei to announce the company’s second-quarter results. “This growth is driven by a fast ramp-up of 10-nm mobile customer products.”
TSMC reiterated its expectation for 2017 sales growth to be in a range of 5 percent to 10 percent.
The company may see 10 nm sales climb during the second half this year as it uses the 10 nm process to make the A11 application processor for Apple’s iPhone 8. TSMC says it expects 10 nm to account for about 10 percent of its sales during the second half of this year.
The company may gain an advantage over Samsung at the 7-nm node a year from now.
TSMC said its 7-nm yield is ahead of schedule and it expects a fast ramp in 2018. The company plans to insert several extreme ultraviolet (EUV) layers at 7 nm, but declined to provide details. The company also plans to offer a 7-nm plus node that it expects will allow customers easy migration from 7 nm.
At this point, TSMC has about 30 tape outs for 7-nm products.
TSMC added that its 5 nm roadmap is on track for a launch in the first quarter of 2019.
In the meantime, the company has been filling gaps in its legacy process technology to blunt the competition.
TSMC has increased capacity for its 28 nm process, which accounted for more than a quarter of its revenue during the second quarter this year. The company, which has counted on 28 nm as a cash cow for more than five years, is hanging on to a 90 percent share of the market even as rivals such as Intel are trying to grab a chunk of that business.
“We aim to achieve full capacity at all nodes,” said Co-CEO CC Wei. “We believe we are the lowest-cost supplier.”
TSMC has introduced a 22-nm node between the 28 and 16-nm geometries that the company currently offers.
TSMC aims to offer 12 nm products based on its 16 nm technology after it completes 12 nm development work in the second half of this year. The 12 nm technology will be an “optical shrink” of 16 nm, which will allow customers to convert existing 16 nm designs easily, according to Wei.
Even so, there are some niches where TSMC plays second fiddle. At the 20/16 nm node, TSMC has faced strong competition from Samsung, which makes 14 nm products for Qualcomm.
Sales of TSMC’s 16/20 nm products dropped to 26 percent in the second quarter, sliding from 31 percent of total first quarter revenue and 33 percent during the fourth quarter of 2016. TSMC expects the 16/20 nm decline to continue during the third quarter this year.
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