Rather than watch the World Cup battle for third place, my beautiful wife and I spent last Saturday afternoon at the CASPA Wearables Symposium. The most interesting presentation was from Samsung because it included slides on their foundry offering. In regards to wearables, I still don’t see the ROI I need to buy one, yet. We are getting close though and I will write more about that in another blog.
My good friend Kelvin Low presented for Samsung. Kelvin and I first met when he was at Chartered Semiconductor, then again at GlobalFoundries, today Kelvin is Senior Director of Marketing for the company’s foundry business. He is responsible for developing the strategic product direction of the foundry’s advanced process nodes – 28nm and below. In addition, he is working to develop the foundry ecosystem. It is nice to see someone with serious foundry experience in this position, absolutely.
One thing I noticed is that Samsung is not offering 20nm so the rumor that TSMC will share 20nm customers with Samsung is absolutely false. As I mentioned inThe iPhone6 will have TSMC 20nm, Absolutely!, the iPhone6 is all TSMC 20nm. Samsung skipped 20nm in favor of 14nm which seems to be a wise decision given the comments from Morris Chang on the TSMC Q2 2014 Conference Call last week:
Morris Chang: After two years of meticulous preparation, we began volume shipments of our 20 nanometer wafers in June. The steepness of our 20 nanometer ramp sets a record. We expect 20 nanometer to generate about 10% of our wafer revenue in the third quarter and more than 20% of our wafer revenue in the fourth quarter and we expect the demand for 20 nanometer will remain strong and will continue to contribute more than 20% of our wafer revenue in 2015.
TSMC 20nm production is about six months later than I had predicted but is timed perfectly for the Apple iPhone6 builds. And yes, TSMC will dominate the 20nm node just like they did 28nm. The 20nm delay also delayed 16nm of course since 16nm “leverages” the 20nm process. Even IF all goes well with 14nm, which is a big if, TSMC will have big profits from 20m for the next few years. Any 14nm delays will make those profits even bigger.
Morris Chang: Volume production of 16 nanometer is expected to begin in late 2015 and will be fast ramped up in 2016. The ecosystem for 16 nanometer designs is current and ready. A few years ago, in order to take advantage of special market opportunities, we chose to develop 20 SoC first and then quickly follow with 16 nanometer. We chose this sequence to maximize our market share in the 20 nanometer…
This means that Apple is back with Samsung for the iPhone6 refresh in 2015 using 14nm. As I have mentioned before, Samsung has a 6 month FinFET lead on TSMC with production starting in 1H 2015. I have also blogged that the big fabless companies will go back to second sourcing at 14nm (28nm and 20nm were single source to TSMC). The result being, per Morris Chang:
As the 2016 foundry competition unfolds we believe our decision to have been correct. Number one, in 20 SoC, we believe we will enjoy overwhelmingly large share in 2014, 2015 and onwards. Number two, in 16 nanometer, TSMC will have a smaller market share than a major competitor in 2015. But we’ll regain leading share in 2016, 2017 and onwards. Number three, if you look at the combined 20 and 16 technologies, TSMC will have an overwhelming leading share every year from 2014 on.
The major competitor of course is Samsung. This level of transparency is greatly appreciated even though it caused TSM stock to drop 6% the day after the call. In the race to foundry FinFETs Samsung wins, TSMC places, and Intel barely shows. 10nm FinFETs could be a very different story however.
Morris Chang:We work closely with our key customers to co-optimize our 10-nanometer process and design. We expect to have customer tape-outs in the second half of 2015.
Translation: Test chips will tape-out in 2015 but I do not expect 10nm production to start until 2017. Intel and Samsung are hot on the trail for 10nm which I will blog about in more detail later. Hopefully it will be a real three horse race this time, for the greater good of the semiconductor industry!
Also Read: Intel Custom Foundry Explained!