Interesting notes from my most recent Taiwan trip: Taiwan unemployment is at a record low. Scooters once again fill the streets of Hsinchu! TSMC will be passing out record bonuses to a record amount of people. TSMC Fab expansions are ahead of schedule. The new Fab 15 in Taichung went up amazingly fast with equipment moving in later this year. When was the last time you saw a fab built ahead of schedule and under budget? Simply amazing! Taiwan is also ready to overtake Japan as the world’s largest semiconductor materials market. The Taiwan market grew from $6.9 billion in 2009 to estimated $9.1 billion in 2010, showing 36%+ growth. Go Taiwan!
The Motley Fool did a nice TSMC financial article with pretty pictures. I like pretty pictures. The bottom line is that not only is TSMC the largest semiconductor foundry, TSMC is also the most profitable. The important point here is margins. Margins translates into pricing flexibility as supply outpaces demand, which is coming, believe it! Semiconductor manufacturing capacity utilization today is running at 90%+ in most segments. With all the new fab space coming online from TSMC, Samsung, Intel, and GlobalFoundries in 2012 it may be a different story. Either way TSMC wins.
Unfortunately Motley Fool does not know semiconductors as they listed NVIDIA and LDK Solar as industry peers/competitors! DOH! One of the most amusing things I do for money is consult with Wall Street types and explain exactly what the semiconductor market is and who the real players are. I also slip in some EDA and Semi IP information whenever possible. Even with the recent acquisitions, Wall Street simply does not care about EDA, but I digress.
The one semi-relevant example Motley Fool uses is number four foundry, SMIC. TSMC Gross Margins are 49.6% versus SMIC at 20.8%. UMC, the number two foundry, is at 27.5%. GlobalFoundries financials are private but I will see what I can find out. Intel and Samsung will never tell foundry capacity or margin numbers so I shouldn’t even be mentioning them in the same paragraph as the real foundries.
Coming this fall from TSMC is the new and improved Open Innovation Platform Ecosystem Forum. TSMC is preparing a massive design ecosystem event on Tuesday, October 18th at the San Jose Convention Center. A call for papers already went out, 18 papers will be presented to an open forum of industry executives from TSMC, ecosystem partners, and customers. This is a DO NOT MISS event! There will be focused breakout sessions on all manner of design issues AND a pavilion with around 80 TSMC Design Ecosystem partners showing their wares. Plus, I will be there (free food), such a deal. The food is always good at TSMC events!
The Open Innovation Platform® is the substantiation of TSMC’s Open Innovation model that brings together the thinking of customers and partners under the common goal of shortening design time, minimizing time-to-volume and speeding time-to-market, and ultimately time-to-money.
No doubt this event will be sold out. Follow SemiWiki.com for TSMC OIP updates coming soon.
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Next Generation of Systems Design at Siemens