The TSMC Supremacy
When Nvidia CEO Jensen Huang unveiled the H100 data center GPU last week (3/22), he said it was made with TSMC’s 4-nanometer process.
He also said Nvidia is talking to Intel as a new potential foundry partner.
But he warned:
Thread: 1/17
$TSM $INTC $NVDA
When Nvidia CEO Jensen Huang unveiled the H100 data center GPU last week (3/22), he said it was made with TSMC’s 4-nanometer process.
He also said Nvidia is talking to Intel as a new potential foundry partner.
But he warned:
Thread: 1/17
$TSM $INTC $NVDA
2/17
"Being a foundry the caliber of TSMC is not for the faint of heart. I mean this is a change not just in process technology and investment of capital. It's a change in culture." - Nvidia CEO Jensen Huang
$TSM $INTC $NVDA #semiconductors
"Being a foundry the caliber of TSMC is not for the faint of heart. I mean this is a change not just in process technology and investment of capital. It's a change in culture." - Nvidia CEO Jensen Huang
$TSM $INTC $NVDA #semiconductors
3/17
TSMC’s business runs on win-win relationships. As customers grow, so does TSMC.
By comparison, Intel makes and sell its own chips. It’s a fierce competitor, used to crushing rivals. Its customers are PC/server vendors, not other chip makers.
$TSM $INTC
TSMC’s business runs on win-win relationships. As customers grow, so does TSMC.
By comparison, Intel makes and sell its own chips. It’s a fierce competitor, used to crushing rivals. Its customers are PC/server vendors, not other chip makers.
$TSM $INTC
4/17
A story like the Nvidia-TSMC saga would not have been possible with Intel.
Intel sells graphics chips, just like Nvidia. They are rivals.
TSMC does not sell any chips. It only manufactures them for customers like Nvidia.
$INTC $TSM $NVDA
A story like the Nvidia-TSMC saga would not have been possible with Intel.
Intel sells graphics chips, just like Nvidia. They are rivals.
TSMC does not sell any chips. It only manufactures them for customers like Nvidia.
$INTC $TSM $NVDA
5/17
Nvidia’s Huang wasn't satisfied with his 1st manufacturing partner.
But he also couldn’t get a response from TSMC’s USA sales office.
So he wrote letters to TSMC founder Morris Chang, who phoned Nvidia soon after, and visited while on a trip to the US (his honeymoon).
Nvidia’s Huang wasn't satisfied with his 1st manufacturing partner.
But he also couldn’t get a response from TSMC’s USA sales office.
So he wrote letters to TSMC founder Morris Chang, who phoned Nvidia soon after, and visited while on a trip to the US (his honeymoon).
6/17
Nvidia’s CEO liked TSMC's key principles:
-TSMC will never be your competitor, but will only work for you
-TSMC believes in long-term partnerships, not just customers
-Business partners create win-win situations so both grow
-TSMC will "jump through hoops" for partners
$TSM
Nvidia’s CEO liked TSMC's key principles:
-TSMC will never be your competitor, but will only work for you
-TSMC believes in long-term partnerships, not just customers
-Business partners create win-win situations so both grow
-TSMC will "jump through hoops" for partners
$TSM
7/17
That philosophy has worked well over the past few decades.
TSMC now serves over 510 customers, up from 114 in 1993.
$TSM
That philosophy has worked well over the past few decades.
TSMC now serves over 510 customers, up from 114 in 1993.
$TSM
8/17
Revenue among Top TSMC Customers in 2021 (US$):
Apple+33% to $365.82 billion
Qualcomm+43% to $33.57 billion
MediaTek+53% to $17.78 billion
Nvidia+53% to $16.68 billion
AMD+68% to $16.4 billion
Hence
TSMC+24% to $56.82 billion
$TSM $NVDA $AAPL $QCOM $AMD
Revenue among Top TSMC Customers in 2021 (US$):
Apple+33% to $365.82 billion
Qualcomm+43% to $33.57 billion
MediaTek+53% to $17.78 billion
Nvidia+53% to $16.68 billion
AMD+68% to $16.4 billion
Hence
TSMC+24% to $56.82 billion
$TSM $NVDA $AAPL $QCOM $AMD
9/17
TSMC gets more than just money from customers. Every new type of chip TSMC manufactures requires new expertise.
Last year, TSMC made 12,302 different chip products, up from 11,617 in 2020.
Every new chip is an arrow in TSMC’s quiver, a new tool in its belt.
$TSM
TSMC gets more than just money from customers. Every new type of chip TSMC manufactures requires new expertise.
Last year, TSMC made 12,302 different chip products, up from 11,617 in 2020.
Every new chip is an arrow in TSMC’s quiver, a new tool in its belt.
$TSM
10/17
Nvidia made TSMC an expert in graphics processing units (GPUs).
TSMC started manufacturing Nvidia chips in 1998
By 1999 – 10 million GPUs
By 2001 – 100 million
By 2011 – 1 Billion
By 2017, TSMC had shipped nearly 6 million 12-inch wafers for Nvidia.
$NVDA $TSM
Nvidia made TSMC an expert in graphics processing units (GPUs).
TSMC started manufacturing Nvidia chips in 1998
By 1999 – 10 million GPUs
By 2001 – 100 million
By 2011 – 1 Billion
By 2017, TSMC had shipped nearly 6 million 12-inch wafers for Nvidia.
$NVDA $TSM
11/17
A key to understanding TSMC is its range of production expertise.
TSMC deployed 291 distinct manufacturing technologies in 2021, up from 281 in 2020.
Although 3-nanometer gets most of the press, TSMC develops and upgrades a range of processes each year. $TSM
A key to understanding TSMC is its range of production expertise.
TSMC deployed 291 distinct manufacturing technologies in 2021, up from 281 in 2020.
Although 3-nanometer gets most of the press, TSMC develops and upgrades a range of processes each year. $TSM
12/17
Upgrades are highlighted in TSMC’s 2020 Annual Report (pages 10-14) from new 4nm to much older 180nm processes.
Example: 55nm ultra-low power (55ULP) process, to reduce power use from prior 55nm low power (55LP) process.
$TSM
Upgrades are highlighted in TSMC’s 2020 Annual Report (pages 10-14) from new 4nm to much older 180nm processes.
Example: 55nm ultra-low power (55ULP) process, to reduce power use from prior 55nm low power (55LP) process.
$TSM
13/17
Intel bought Tower Semi for customer service and the wider range of chip manufacturing expertise a foundry needs.
Intel listed a few in its announcement: radio frequency (RF), power, silicon-germanium (SiGe) and industrial sensors. $INTC $TSEM
Intel bought Tower Semi for customer service and the wider range of chip manufacturing expertise a foundry needs.
Intel listed a few in its announcement: radio frequency (RF), power, silicon-germanium (SiGe) and industrial sensors. $INTC $TSEM
14/17
Intel also said Tower offers more than 2 million wafer starts per year of capacity, similar to Intel’s 2021 production of over 2 million wafers.
By comparison, TSMC shipped 14.18 million wafers (12-inch equivalent) last year, up from 12.4 million in 2020.
$INTC $TSEM $TSM
Intel also said Tower offers more than 2 million wafer starts per year of capacity, similar to Intel’s 2021 production of over 2 million wafers.
By comparison, TSMC shipped 14.18 million wafers (12-inch equivalent) last year, up from 12.4 million in 2020.
$INTC $TSEM $TSM
15/17
TSMC produced 26% of the world’s logic (non-memory) semiconductors last year, up from 24% in 2020.
$TSM
TSMC produced 26% of the world’s logic (non-memory) semiconductors last year, up from 24% in 2020.
$TSM
16/17
Intel is a great company. It has the money and engineering talent to build a world-class chip foundry business.
But it will be an uphill battle.
Building a reputation like TSMC has won’t be easy.
$INTC $TSM
Intel is a great company. It has the money and engineering talent to build a world-class chip foundry business.
But it will be an uphill battle.
Building a reputation like TSMC has won’t be easy.
$INTC $TSM
17/17
Nvidia CEO Jensen Huang’s praise has been loud and clear.
-“Without TSMC, Nvidia wouldn’t be where it is today.”
-“In every important battle Nvidia has faced, TSMC has been its most powerful ally.”
Intel should aim for praise like that.
$TSM $NVDA $INTC #semiconductors
Nvidia CEO Jensen Huang’s praise has been loud and clear.
-“Without TSMC, Nvidia wouldn’t be where it is today.”
-“In every important battle Nvidia has faced, TSMC has been its most powerful ally.”
Intel should aim for praise like that.
$TSM $NVDA $INTC #semiconductors
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