TSMC logo./Courtesy of News1
Marvel, which is emerging as a strong player in the application-specific integrated circuit (ASIC) market, has revealed plans to collaborate with Taiwan Semiconductor Manufacturing Company (TSMC) on advanced processes below 3nm (nanometer, or one billionth of a meter). It is also reported that Marvel plans to utilize TSMC's silicon photonics process, which is gaining attention as next-generation optical semiconductor technology. TSMC, which holds over 60% of the foundry market share and has practically solidified its dominance from legacy to advanced processes, aims to seize the application-specific semiconductor manufacturing market, which has emerged as the next battleground in the foundry sector amid the growth of artificial intelligence (AI).
Application-specific semiconductors are customized semiconductors designed to be specialized for specific functions. Compared to graphics processing units (GPUs), which are designed for general use, they have lower prices, power consumption, and overall investment costs, making them stand out in various markets including AI data centers, automobiles, and the Internet of Things (IoT). According to JP Morgan, Broadcom holds the number one position in this market with a market share of 55% to 60%, followed by Marvel with a share of about 15%.
According to industry sources on the 20th, the next-generation AI application-specific semiconductors that Marvel will release are planned to utilize TSMC's 3nm and 2nm processes. Since last year, Marvel has initiated mass production using TSMC's 3nm process. The next-generation products are planned to adopt TSMC's 2nm process. It is reported that Marvel will enhance performance using silicon photonics technology, which converts data communication between semiconductors from electrical to optical, increasing data signal processing speeds by more than ten times.
Marvel has risen as a strong player in the application-specific semiconductor market alongside the blossoming AI market. In 2021, Marvel won its first order for application-specific semiconductors from Amazon Web Services (AWS). In October last year, it announced a design plan for application-specific semiconductors with Meta. Matthew Murphy, CEO of Marvel, noted that they plan to soon finalize a third application-specific semiconductor contract with a major cloud provider. Marvel's revenue last year was $5.76 billion (about 7.9344 trillion won), with more than $1.5 billion generated from AI, and this year's related revenue is expected to exceed $2.5 billion.
TSMC, which mass-produces over 70% of the semiconductors designed by Broadcom, is strengthening its collaboration with Marvel to seize the rapidly growing application-specific semiconductor market. According to market research firm Coherent Market Insights, the market size of application-specific semiconductors was approximately $20.29 billion (about 29 trillion won) last year and is expected to grow to about $32.84 billion (about 47 trillion won) by 2031.
The Taiwan Economic Daily reported, 'Marvel has launched data center chips manufactured using TSMC's 3nm process and announced that the collaboration between the two companies will expand to the 2nm process.' It also stated, 'As Marvel's custom AI chip business continues to expand, TSMC's investment will increase, leading to orders for advanced processes.'
There are indications that Samsung Electronics' foundry division, which is increasingly lagging behind TSMC, needs a strategy to target the application-specific semiconductor market. According to market research firm TrendForce, TSMC's global foundry market share in the first quarter of this year was 67.6%, far ahead in first place. Samsung Electronics held 7.7% during the same period, widening the gap in market share. An industry source noted, 'Samsung Electronics is also collaborating with Broadcom and Marvel in advanced processes,' but added, 'However, to mass-produce products, there is a need to enhance technological competitiveness through yield improvement and performance enhancement.'
Marvel and TSMC strengthen partnership to dominate custom semiconductor market
Marvel and TSMC strengthen partnership to dominate custom semiconductor market Marvel partners with TSMC to enhance their presence in the custom ASIC sector.
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