TSMC's 7nm process stands out, accounting for 100% market share

On January 18, TSMC, the leading semiconductor manufacturer and founder of the Tianzi No.1 project, held an investor conference. Zhang Zhongmou, the company’s chairman who is set to retire in June, highlighted that TSMC's revenue for 2018 is expected to grow by 10-15%, driven by strong demand in high-performance computing (HPC), the Internet of Things (IoT), and automotive applications. This growth reflects the company's expanding role across multiple high-tech sectors. The company also provided an update on its 7nm manufacturing process, revealing that it has secured orders from over 50 customers. These include major players in smartphones, gaming consoles, processors, AI systems, and even Bitcoin mining equipment. This positions TSMC as a clear leader in the 7nm space, with Zhang Zhongmou stating that the company holds a 100% market share for 7nm, implying that Samsung hasn’t yet secured any 7nm orders. Recent reports suggest that both Qualcomm’s upcoming flagship chip (likely the Snapdragon 855) and Apple’s next-generation A12 chip will be exclusively manufactured by TSMC using the 7nm process. This further solidifies TSMC’s position as a key supplier for top-tier chipmakers. TSMC expects mass production of its 7nm process to begin in the second quarter of this year, with full capacity reached by the fourth quarter. The process is expected to contribute up to 10% of the company’s total revenue by the end of the year. In addition, TSMC will continue to push forward with its 10nm process, which is expected to see an increased revenue contribution this year as well. However, there are challenges ahead. The price of silicon wafers is anticipated to rise throughout 2018, which could reduce TSMC’s gross profit margin by 0.5 to 1.0 percentage points. This is a key concern for investors as the company navigates rising input costs. As for Intel, the company has long claimed its technology is ahead of competitors by one generation. However, its 7nm process is still lagging, currently only matching its own 10nm node. While Intel continues to emphasize its capabilities, the reality is that the industry is moving quickly, and TSMC is setting the pace in cutting-edge manufacturing.

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