As previously predicted TSMC is having another record breaking SoC quarter. TSMC is my favorite economic bellwether and from what I can see the semiconductor industry will continue to grow this year and next at a rapid rate thanks to TSMC and the fabless semiconductor ecosystem:
We have set a new record of revenue and profitability thanks to strong demand and our successful ramp of 20nm. Our revenue increased 14% sequentially and 29% on a year-over-year basis to reach $209 billionNT. Our gross margin exceeded 50% to reach 50.5% which is also a record since the second half 2006.
20nm is the focus of this quarter and rightly so. Let’s not forget that a famed semiconductor analyst, Dr. Handel Jones of IBS, predicted at the beginning of this year that:
- 20nm will be a high volume technology node in 2015 but mostly 2016.
- 16/14nm will provide low cost gates with volume production only in 2017.
- 10nm will be postponed. Cost per gate will be prohibitive and unclear where demand will come from outside high-speed processors and FPGAs.
To be clear, 20nm is in high volume production TODAY and 14nm/16nm will be in high volume production in 2015. In regards to 10nm:
On 10 nanometer development our 10 nanometer development is progressing according to plan. Currently we are working on early customer collaboration for product tape outs in 4Q of 2015. The risk production date remains targeted at the end of 2015. Our goal is to enable our customers’ production in 2016.
To meet this goal we are getting our 10 nanometer design ecosystem ready now. We have completed certification of over 35 EDA tools using ARM CPU core as a vehicle. In addition we have started the IP validation process six months earlier than previous nodes with our IP partners.
TSMC has a dozen 10nm early access customers designing SoCs, baseband/LTE chips, CPUs, GPUs, network processors, FPGAs, and game consoles. So, rather than postponing, TSMC has pulled in 10nm to better align with the Intel 10nm road map. The famed Intel process lead, in regards to SoCs, has slowed since 22nm. The Intel Bay Trail 22nm SoC was released in Q3 2013 while Apple’s 20nm A8 was released in Q3 2014. The Intel 14nm Cherry Trail SoC has now been delayed to Q1 2015 and the Intel 14nm Broxton SoC targeting phones is no longer being discussed publicly.
We are happy to say that 16 nanometer has achieved the best technology maturity at the same corresponding stage as compared to all TSMC’s previous nodes. On the yield the progress is much better than our original plan. This is because the 16 nanometer uses similar process to 20 SoC except for the transistors and since 20 SoC has been in mass production with good yield.
On the performance side compared with the 20 SoC, 16 FinFET is greater than 40% speed, faster than the 20 SoC at the same total power or consume less than 50% power at the same speed. Our data shows that in high-speed application it can run up to 2.3 GHz or on the other hand for low power application it consumes as low as 75 milliwatts per core.
Samsung still seems to have a production lead over TSMC at 14nm. My expectation is that Samsung 14nm SOCs will start revenue in Q2 2015 and TSMC 16nm FF+ SoCs will start in Q3 2015, so Intel’s process lead is narrowing. At 10nm I expect the foundries to be lockstep with Intel (for SoCs). Just my opinion of course.
You can find TSMC quarterly result and presentation materials HERE.