Taiwan’s share of total component cost on the latest iPad Pro surged from 1.7% to 18.5%.
Thanks to Ennostar’s development of the Mini-LED display. Note this breakdown excludes the M1 chip, made by TSMC.
Early June TSMC broke ground on the $12bn Arizona plant. Apparently, Intel and TSMC are not as concerned about intensive water usage as they are about electricity.
In 2019 TSMC recycled 86.7% of it’s water intake vs 80% by Intel, but Intel announced that they aim to be net-positive water use by 2030.
IC packaging will be the next battleground as we near the end of Moore’s Law. This involves wire bonding the silicon to the metal leads that will connect it to the PCB, again using very costly equipment.
The leader in this category is Taiwan’s ASE Packaging Corporation, this year already generating over $7bn in chip packaging revenue compared to TSMC’s $3.6bn (+20% YoY on both counts).
The global chip shortage will cause delays until Q2 of 2022 according to Gartner.
Taiwan’s spike in domestic Covid-19 cases doesn’t help.
The world’s leading chip testing service, KYEC, has sent 2100 foreign workers home after a serious cluster infection. The incident will slow its production in June by 30 to 35%. Other Taiwanese tech companies have also begun to report their own clusters.
Good news is domestic cases have not yet affected export. May’s numbers are up 34.5% YoY with $13.27bn worth of electronic components.
Taiwan was ranked as the world’s No.8 most competitive economy by Swiss MBA school IMD.
18th May, 2021
IC’s are the new Toilet Paper and component shortages are getting increasingly serious.
Component shortages are getting increasingly serious. Voltage regulators that normally cost 50 cents have been selling for as much as $70.
Factories in China are hoarding like crazy, exacerbating things. Many factories now have half their design staff dedicated to finding, and redesigning for, replacement components.
If you need anything manufactured this year, you better – try to – order your silicon now.
#ASML’s latest EUV equipment uses an astonishing 20 TIMES as much energy as the previous gen. #TSMC already uses 5% of Taiwan’s total energy supply.
In the last 3 years, they bought 43 EUV’s, for ‘21 to ‘23 another 92 are ordered.
Perhaps building some fabs outside Taiwan is not such a bad idea after all.
TSMC uses 156 million liters of water every day. In Taiwan they already have a water supply problem, I’m not sure how this will work in Arizona’s desert.
Finding the talent to run the new fabs is of course a challenge as well. Taiwan’s Gvt has actually forbidden headhunters in Taiwan to list mainland positions.
26th March, 2021
Note the sanctioned Huawei sub Hi-Silicon fell from 15% to 0 all while TSMC stayed at peak capacity. All wafers just got gobbled up as the world’s hunger for advanced IC’s far outstrips supply.
#IntelCorp is spending US$20 B on two new plants in Arizona, to compete with TSMC and #Samsung in foundry: manufacturing IC’s for others.
Intel tried and failed at this before, but this time they say they will really offer their clients their best mfg technology, whereas before they held back.
Intel will have quite a bit of catching up to do with TSMC’s technology, which is charging ahead investing $28 B this year, starting 3nm node in 2022
New fabs in the US are great to relieve some of the strategic pressure on Taiwan, but it will be hard to find the people to run them. And who will package all those new IC’s? That is quite a specialist field in itself.
#Acer had a tough week having been hit by a $50 million ransomware attack. This is the highest in history — just two months after the same group’s $30 million offensive against HK’s Dairy Farm Group.
Happy 50th birthday to Delta Electronics. Decade-long investment in EVs is finally paying off and the company aims to capture 10% of the US$3 B global market in power and traction components in EVs.
15th March, 2021
We were always proud to keep lead-times for the whole BOM under 6 weeks, https://titoma.com/blog/reduce-component-lead-time
but now almost every IC, modem, GPS is quoting 26+ weeks… 🙁
We saw a #STM32 go from $2 to $14.
It seems IC packaging is a real bottleneck, this part of the chain is also dominated by Taiwanese firms, but it looks like they feel the current hause is temporary, and are loath to invest in expensive wire bonding machines.
Meanwhile Taiwan is dealing with a draught, and TSMC and UMC have been trucking in extra water because their municipal supply had to be cut 11%.
Businesses are now asking to drill their own wells for their own use right inside the park. Doesn’t sound very sustainable to me.
China’s Bitmain, world’s largest maker of bitcoin mining PCs planned to set up an R&D center in Taiwan. But when TSMC caught them poaching their talent they cut them loose, leaving Bitmain stranded as there is no alternate supply of IC’s.
Some 250K Taiwanese have come home from mostly the US, fleeing Covid. Many are working remotely, others are looking for opportunities, a good impetus for the local start-up scene.
After a decade of litigation, camera maker Largan settled with smaller rival Ability. Largan now owns 15% of Ability.
29 February, 2021
Google Opened Its First Ever Hardware Design Hub Outside the US
Google opened its first-ever #hardwaredesign hub outside the US, in New Taipei. It will house teams working on Pixel handsets, Nest thermostats, Chromecasts and more.
UMC profits surged 200% YoY on strong demand for IC’s. Factory utilization rate is at 99%.
MediaTek, now the largest smartphone chipmaker, unveiled 2 new 5G processors. The Dimensity 1100 uses #TSMC‘s 6-nm technology and is touted to be 22% higher in performance and 25% more power-efficient.
Global Wafers increased its offer price for Germany’s Siltronic AG two days in a row, up to to $145 per share, “the best and final consideration.”
The EU, US and Japan have all gone through diplomatic channels to ask the Taiwanese government to ease the shortage of automotive chips. But with production lines already running at full capacity and order books full, it’s going to be like squeezing blood from a stone.
The carmakers had cut back their orders too drastically under Covid, and the situation was made worse by Trump’s sanctions against Chinese chipmakers Huawei and SMIC.
This is unlikely to ease up under Biden. Gina Raimondo, the new Secretary of Commerce, has said she will be “very aggressive, to help Americans compete against the unfair practices of China.”
TSMC REPORTS RECORD REVENUE
18 January, 2021
#TSMC reports record revenue in Q4 and raises its projected capital spending to a whopping US$ 25 billion. The reason? A worldwide shortage of IC’s. The world’s largest chipmaker is struggling to keep up with demand.
Car production is being disrupted worldwide https://lnkd.in/dhxtfjk due to the lack of chips. Gasoline cars contain $400 of chips, EV’s $2K, an autonomous car uses about $15K worth.
Foxconn makes another move into automotive with a joint venture with China automaker Geely. As #Apple is rumored to venturing into EV’s, it looks like Foxconn is gearing up to make bigger things than phones for its top customer.
Taiwan’s MediaTek surpassed Qualcomm for the first time to become the largest smartphone IC vendor in Q3 2020.
Cisco is opening a new software center in Taipei’s Linkou district, the first of its kind in Asia.
Amidst rising costs and trade tensions, more and more Taiwanese companies are retracting from China. Good summary https://lnkd.in/dXG5yB9 from the Financial Times’s Kathrin Hille of a trend that’s been going on for a while.
ELECTRONICS SUPPLY CHAINS STAY IN CHINA & TAIWAN
Update 13 – 11 – 2020
Despite a lot of talk of companies considering other options, most of those evaluations have led to the conclusion that Greater China is still the best choice.
According to Anna-Katrina Shedletsky, most large firms stay in China.
Medium-sized companies are 50/50 between Taiwan and China, trending slightly further to Taiwan, which is supported by the overall US electronics import numbers.
A big impetus for moving away was to reduce risk. But Taiwan & China have actually proven to be among the world’s most effective in handling the Covid crisis.
Another interesting observation is that as Covid put a halt to most air travel, nobody was scouting new factories.
Moving production to another factory is a major event that can cause a lot of disruption.
Moving to a factory you have never audited, managed by people you have never physically sat down with, was often judged the bigger risk.
Start-ups, who do not yet have their go-to-guys in Asia, and through Covid are unable to go find & meet them, largely stay in the US for now.
TRUMPS ELECTRONICS TRADE WAR: WINNERS & LOSERS
Update 23-10-2020
Of the various categories impacted by the tradewar, electronics are the most strategic, so it’s interesting to see how much US imports were diverted, and to where.
Comparing the first 8 months of the year vs 2019, we see US electronics imports from China went down by $8 bn, some 10%.
The most surprising point to me is that Mexico didn’t pick up any of it, but actually lost, with Canada losing even more. The renegotiation of NAFTA may well be the cause.
Most final assembly was displaced to SE Asia, IMO because Chinese components are still key, logistics dictate supply lines be kept short. Taiwan was the big winner.
Another question is how much electronics production went up in the US itself.
TAIWAN SEES THE WORLD’S LOWEST ECONOMIC IMPACT FROM COVID19
Update 13-10-2020
Taiwan’s total exports reached a monthly record of US$31 b in August, up 2.6% YoY
US$12.5 b of that were electronic components, mostly IC’s. Masin drivers were: Huawei’s race for last-minute orders ahead of the ban, strong demand for 5G chips, IoT and high-performance computing, and Taiwanese factories returning home.
As Quanta moved production back from China to Taiwan, their cost went up by only $ 0.03 per server. While tax incentives surely played a role there, it does show that the 2 countries are now close to price-parity again.
HSMC, the proposed Chinese equivalent of TSMC, has run aground as funds dried up, being in Wuhan likely didn’t help. Their 7nm ASML lithography machine was never used and is now hocked to the bank for $85m.
Another US cabinet member, Keith Krach, is visiting Taiwan to attend the funeral of Taiwan’s “father of democracy” Lee Teng-hui. Another jab a China.
After Tsai Ing-wen recently lifted a ban on US meat imports, and TSMC agreed to open a fab in Arizona, it seems a bilateral trade agreement is in the making
