More recently, attention on TSMC has been heightened by the opening of its U.S. factories.

On the one hand, U.S. President Joe Biden said during a tour of the plant, "These are the most advanced chips on the ground. These chips will power iphones and MacBooks. Apple used to have to buy all of its advanced chips from overseas. Now they will get more from their local supply chain."

"This could change the whole picture." Biden emphasized in his speech.

Taiwan Semiconductor founder Morris Chang also noted that he had dreamed for years of setting up a factory in the United States, but that his first attempt in Washington state in the late 1990s turned out to be a nightmare, but he believes he is more prepared this time. With this, he fulfilled his dream of building a wafer factory in the United States. Chang also stressed in his speech, Globalization is close to death, and free trade is on its way out. A lot of people hope they will come back, but I don't think they will, at least for a while.

Judging from the public discussion, some people are happy that the United States has advanced chip manufacturing; Some worry that Taiwan Semiconductor Manufacturing will become US Semiconductor Manufacturing. But it is not just the US that covets TSMC.

Why is everyone focusing on TSMC? Will Taiwan lose TSMC?

Who is Taiwan Semiconductor Manufacturing?

Founded in 1987, TSMC pioneered the professional integrated circuit manufacturing service model in the semiconductor industry, according to its website. TSMC serves approximately 535 customers and produces more than 12,302 different products, which are widely used in various end markets such as smartphones, high efficiency computing, Internet of Things, automotive electronics and consumer electronics. In 2021, TSMC and its subsidiaries will own and manage an annual production capacity of over 13 million 12-inch wafers equivalent.

TSMC operates four twelve-inch superfab fab, four eight-inch Fab and one six-inch fab in Taiwan. In addition, we have one 100% owned overseas subsidiary, Taiwan Semiconductor Manufacturing (Nanjing) Co., LTD., and two 100% owned overseas subsidiaries, WaferTech USA and Taiwan Semiconductor Manufacturing (China) Co., LTD., to support the production capacity of our 12-inch fabs.

In December 2021, TSMC established a subsidiary (Japan Advanced Semiconductor Manufacturing, Inc., JASM) in Kumamoto Prefecture, Japan. JASM will build and operate a 12-inch wafer plant and is expected to begin production by the end of 2024. Meanwhile, TSMC continues to implement its plan to build an advanced wafer fab in Arizona, USA, with production to begin in 2024.

In terms of performance, according to its latest report, its revenue increased by 5.9% month on month in November, and its cumulative annual revenue increased by 44.6% year on year in terms of new Taiwan dollars, thanks to the implementation of new 5-nanometer capacity. According to TSMC's forecast, fourth-quarter revenue is expected to increase slightly, continuing to hit a single-quarter high. Consolidated revenue for November 2022 was about T $227.26 billion, up 5.9 percent from the previous month and 50.2 percent from the same period last year, according to the company's November 2022 revenue report released yesterday. Cumulative revenue for the January-November period of 2022 was NT $2.71.31 trillion, up 44.6 percent from the same period last year.

Taiwan Semiconductor's shares are down more than 20 percent this year after more than doubling during the pandemic, according to Bloomberg. The global economic slowdown has reduced consumer demand for many of the products used in TSMC's chips, but the company and its customers still expect long-term trends in electronics demand to continue to rise. TSMC has committed to capital expenditure of about $36bn this year.

In its third-quarter report, Taiwan Semiconductor had forecast consolidated revenue of between $19.9 billion and $20.7 billion. That would mean TSMC's revenue in 2022 would be between $73.17 billion and $73.97 billion. For comparison, Taiwan Semiconductor Manufacturing Co., LTD. 's full-year 2021 revenue is $56.84 billion. That is in line with the 30% growth forecast by Taiwan Semiconductor's Liu Deyin in the middle of this year.

Thanks to such revenues, TSMC has become the world's leader in contract wafer manufacturing.

According to the latest data statistics of Jibang Consulting, Taiwan Semiconductor Manufacturing Co., LTD., with the strong stock momentum brought by the new main chip of iPhone, had a revenue of $20.16 billion in the third quarter, with a quarterly increase of 11.1%. The proportion of advanced manufacturing process revenue below 7 nm continued to grow to 54%, driving the market share of Taiwan Semiconductor to 56.1% in the third quarter. Conversely, Samsung's revenue fell 0.1 percent quarter on quarter and its market share slipped to 15.5 percent due to the impact of a weaker Korean won, although it also grew on the back of some iPhone components.

In particular, the top five players -- Samsung, UMC, GlobalFoundries and SMIC, led by Taiwan Semiconductor Manufacturing (TSMC) -- saw their combined market share rise to 89.6 percent.

Why Taiwan Semiconductor Manufacturing?

To answer this question, we need to understand the current state of the semiconductor market.

In the early days of integrated circuits, all chip suppliers had their own wafer manufacturing plants. But then, as the process evolved, the increased cost of upgrading fabs, combined with the pressure from the cyclical nature of integrated circuits, gave birth to Foundry, a field in which Taiwan Semiconductor was a pioneer, and led to a boom in Fabless.

Fabless's share of global IC sales hit an all-time high of 34.8% in 2021, according to statistics compiled by ICinsights. The data further states that Fabless/Systems IC's sales increased 2.7 times ($66.4 billion to $177.7 billion) from 2011 to 2021, while IDM vendors' total sales increased 63 percent from $203.9 billion in 2011 to $332.8 billion in 2021 during the same period.

According to ICinsights, the number fluctuates a lot because of the storage industry cycle. As we all know, the world's leading storage providers are IDMs, and their share is among the best in the integrated circuit category.

According to WSTS data, the total size of the global semiconductor market in 2021 reached $555.893 billion. Among them, the integrated circuit market size reached 463.02 billion, accounting for 83.29% of the global semiconductor market. Integrated circuits are divided into analog chips, microprocessors, logic chips and memory chips, with a market size of $74.105 billion, $8.21 billion, $154.837 billion and $153.838 billion, accounting for 16.01%, 17.33%, 33.44% and 33.23% of integrated circuits respectively.

As you can see from the above data, ahead of storage are logic chips, which are also the main products produced by the fabs. As mentioned earlier, Taiwan Semiconductor Manufacturing is an important player. Especially now, because of data centers, artificial intelligence, self-driving cars and supercomputing, the increasing demand for chip performance is driving the demand for advanced capacity, and Taiwan Semiconductor is the preferred manufacturer to be able to produce those chips.

Looking back at the development of wafer manufacturing industry over the past years, with the withdrawal of wafer chip and United Electric, only Taiwan Semiconductor, Samsung and Intel are still working on advanced technology. On the one hand, in addition to the high technical requirements of advanced processes, on the other hand, investment in advanced fabs requires a huge amount of capital, which also becomes another threshold to enter this industry.

digitimes asia estimated in an article published last year that the cost of building semiconductor fabs has increased dramatically with each generation since the 90nm process began using 12-inch wafers. For example, the 28nm process costs $6 billion to build, and the 14nm process costs $10 billion. Below 10nm, costs soar further. For example, 7nm processes cost more than $12 billion and 5nm nodes cost $16 billion. It should be emphasized that such an investment is completed to complete the fab production capacity of only 50K per month.

This shows how important TSMC, with its advanced technology and large production capacity, is. According to the company's third-quarter results report, TSMC's 7nm accounted for 26% of revenue, 5nm for 28%, and the lagging 16nm for 12%. This is remarkable considering the total revenue of Taiwan Semiconductor. From the perspective of customers, including Apple, Qualcomm, Nvidia, AMD, Mediatek, even Intel and other advanced technology players are TSMC customers.

Add in the geopolitical and COVID-19 impacts of the past few years, and owning your own TSMC has become a dream.

Who is robbing Taiwan Semiconductor?

Who is robbing Taiwan Semiconductor? When you ask this question, the first thing that comes to mind is the United States. Since former President Trump, Uncle Sam has been coveting China's jewel in Taiwan.

According to a report in the Wall Street Journal on May 11, 2020, the Trump administration is in talks with Taiwan Semiconductor Manufacturing and other manufacturers to build factories in the US. A senior US official said in a statement at the time: "The administration is committed to ensuring that the US remains a technology leader." "The U.S. government continues to coordinate with state, local, and private sector partners, as well as our Allies and partners abroad, to collaborate on research and development, production, supply chain management, and workforce development opportunities," the official added.

On May 15, TSMC officially announced on its official website that it plans to build and operate an advanced fab in the United States with the mutual understanding and commitment of the U.S. federal government and the state of Arizona. The facility, to be located in Arizona, will use TSMC's 5-nm process technology to produce semiconductor wafers, with a planned capacity of 20,000 wafers per month, according to the company.

Biden and TSMC chairman Liu Deyin and TSMC President Wei Cheijia

Then, two days earlier, Taiwan Semiconductor finally announced that it had taken a major step forward with its U.S. fab, Many semiconductor industry experts attended the event, including US President Joe Biden, TSMC founder Morris Chang, TSMC Chairman Andy Lau, TSMC President William Wei, US Secretary of Commerce Raymond, Apple CEO Tim Cook, Nvidia CEO Jen-Hsun Huang and AMD CEO Lisa Su.

Taiwan Semiconductor founder Morris Chang gives a speech

At the ceremony, TSMC also announced that the plant's first process will be upgraded from the initial 5nm to 4nm, and production will begin in 2024. Meanwhile, TSMC has also broken ground on a second wafer plant, which is scheduled to begin production of its 3nm technology in 2026. TSMC stressed that the total investment in the two fabs would be about $40bn. When completed, TSMC's two Arizona fabs will produce more than 600,000 wafers a year. When the two Arizona plants open, they will generate an estimated $10 billion in annual revenue, according to Liu Deyin, TSMC chairman.

In addition to the United States, Japan has become another country vying for Taiwan Semiconductor.

According to the Nikkei, in the 1970s, the Japanese semiconductor industry was dominated by the state, and integrated machinery manufacturers such as Hitachi and NEC were highly competitive. In the second half of the 1980s, Japanese companies took up 50 percent of the global market, and Japanese products swept the global market. However, due to trade friction between Japan and the U.S., the profitability of Japanese companies has declined, while the strength of Korean and Taiwanese companies has increased rapidly. Meanwhile, Japan has lost the investment capacity necessary for the development and mass production of cutting-edge products.

Like the United States, Japan has renewed its enthusiasm for advanced integrated circuits in the wake of COVID-19 and geopolitics, making it a goal to lure Taiwan Semiconductor to set up shop there in addition to continuing its efforts at home.

In November 2021. Taiwan Semiconductor announced that it and SONY will invest US $7 billion to build Advanced Semiconductor Manufacturing Corporation of Japan (" JASM ") in Japan, a partnership that has been supported by the Japanese government. SONY also said it would invest about $500 million in the plant. Construction of the plant is expected to begin in 2022, with production beginning in late 2024, the companies said in a news release.

In February Denso, another Japanese IC company, announced a stake in JASM. According to the press release, in order to support market demand, in addition to adopting 22/28 nanometer process technology, TSMC will also use 12/16 nanometer process technology to enhance the strength of JASM and increase the monthly production capacity to 55,000 12-inch wafers per month. With increased capacity and strong support from the Japanese government, the total capital expenditure for the JASM Kumamoto plant is estimated at approximately US $8.6 billion.

In a recent interview with TV Tokyo, Hou Yung-ching, senior vice president of Asia and Europe operations of Taiwan Semiconductor Manufacturing Co., LTD., also pointed out that in addition to the plant currently under construction in Kumamoto Prefecture, TSMC is also considering building another new plant in Japan. Taiwan Semiconductor said it would not rule it out, but noted that it had no specific plans.

This shows Japan's eagerness for advanced wafer manufacturing. In addition, Germany and Italy in Europe are also said to be interested in wooing TSMC to build local plants.

Will Taiwan lose TSMC?

After the announcement of the new plans for TSMC's U.S. plant, combine that with the previously reported news that TSMC is sending thousands of engineers to TSMC. Therefore, the whole land of China has TSMC was moved to empty, TSMC into the "United States semiconductor". Countries, including the US, are "de-Taiwanising".

In response to this view, Wu Min-qiu, chairman of Wanhong, said recently that when Taiwan Semiconductor Manufacturing Company set up a factory in Arizona, it could be seen that the company sent many Taiwanese engineers to carry out factory work, and Taiwanese people were in charge of wafer factory operation. This means that Taiwan has a lot of scientific and technological talents, and the technical ability, efficiency and quality are better than Americans. "Only Taiwan people can make the factory, the cost is the lowest", when Taiwan people show their advantages in semiconductor, and can grasp the key with strength, it also proves that "semiconductor must be made in Taiwan!"

The manufacturing technology used in TSMC's US fab will be a generation behind Taiwan's most advanced manufacturing processes, the Financial Times said, citing people familiar with the matter. This means that when TSMC's Taiwan plant produces 3-nanometer chips, the Arizona plant will produce 4-nanometer chips, and when the Taiwan plant starts producing 2-nanometer chips, the Arizona plant will switch to the nano-process.

Chen Junning, head of research for CLSA in Taiwan, estimates that if TSMC fully ramps up production at its Arizona plant, it could supply 15% of its chips to customers made in the US.

Taiwan's Ministry of Economic Affairs directly refuted the idea on Facebook. And the reasons for TSMC to stay in Taiwan are summarized as four points:

1. Taiwan Semiconductor went to the United States to set up a factory, the semiconductor did not go to Taiwan