According to Taiwan Economic Daily, the International semiconductor Industry Association (SEMI) released the latest report yesterday (22), pointing out that Taiwan’s semiconductor industry chain is becoming more and more important in the world. It is estimated that the global semiconductor industry output value will grow by 3.3% in 2020. The growth rate of Taiwan, China, is even greater, reaching 16.7%, and the total output value will reach a record high of more than 102.73 billion US dollars, surpassing South Korea and South Korea, ranking second in the world, second only to the United States. According to SEMI’s point of view, the output value of the global semiconductor industry is expected to increase to 426 billion US dollars this year.
SEMI Global Marketing Chief and President of China Taiwan, Cao Shilun, pointed out that Taiwan’s semiconductor industry continues to drive the growth of the overall industry with continuous breakthroughs in technology and strong purchasing momentum. In the past ten years, Taiwan has been the world’s largest semiconductor equipment for up to seven years. In the investment area, the investment momentum in the next ten years is expected to be deployed towards advanced manufacturing processes.
In terms of semiconductor equipment investment, Taiwanese companies’ equipment bills increased by 10.6% in the first seven months of this year to $8.63 billion, ranking third globally; data show that from January to July, China was the largest semiconductor equipment market , the investment amounted to 9.84 billion US dollars, an increase of 45.2% year-on-year; South Korea followed closely, with investment in semiconductor equipment soaring 54.1% to 9.49 billion US dollars.
The global semiconductor equipment market will climb to $65 billion this year and further climb to $70 billion next year, SEMI said. They stressed that the forecast did not take into account U.S. export restrictions on Huawei Technologies Co Ltd and potential sanctions on the Chinese chipmaker.
SEMI pointed out that Taiwan’s advanced semiconductor manufacturing process leads the world, the wafer foundry, packaging and testing output value ranks first in the world, and IC design ranks second in the world. Among them, TSMC’s 5-nanometer has been mass-produced in the second quarter of this year, and the more advanced 2-nanometer layout has also become visible.
Benefiting from the surge in demand for advanced packaging, ASE has become the global leader in semiconductor packaging and testing with a market share of over 21%. MediaTek has successfully deployed the 5G mid-range Model market and has jumped to the fourth largest IC design factory in the world. Novatek and Realtek are also among the top ten.
Affected by the epidemic, most terminal markets have been negatively affected this year, except for online services, data centers, and personal computer applications. SEMI estimates that the global semiconductor industry output value in 2020 will be 426 billion US dollars, with an annual growth rate of 3.3%, but it is still optimistic that market demand will gradually improve in the next few quarters. If the epidemic recurs, it may drag down the recovery momentum.
However, the epidemic has also driven new behaviors and business models, boosting the outlook for semiconductor equipment. Zeng Ruiyu, director of industry research at SEMI, said that cloud and server demand is the main driving force driving the growth of the semiconductor market, and the demand is expected to continue into the post-epidemic era.
In addition, PC demand is better than expected, and it is expected to continue until 2021; smartphone and automobile demand is affected by the epidemic, showing weakness in the first half of the year, but with the release of new mobile phones and the recovery of automobile production capacity in the second half of the year, it will also help drive related semiconductors Sales.
SEMI said that although the recent memory market has slowed down in server memory-related purchases, resulting in an increase in short-term inventory and a decline in prices, it is expected that the price trend in the second half of the year will show a downward trend. However, indicators to watch are the recovery of the mobile device market and the continuation of cloud and server demand.
As for the forecast for next year, Zeng Ruiyu said that although the progress of 5G introduction in various countries is expected to be delayed this year, the medium and long-term outlook is still promising. In addition, the government’s revitalization measures will help the economic recovery. On the premise that trade disputes will not expand, SEMI predicts that semiconductor chip sales, equipment and material markets will all grow in 2021.
Taiwan’s semiconductor industry lineup is expected to grow stronger
In the past, MediaTek’s main force in the chip market of copycat mobile phones was Dugu seeking defeat. Cai Mingjie once said, “Today’s copycat, tomorrow’s mainstream”, but the market did not follow its footsteps. Later, copycat mobile phones declined, and Chinese brand mobile phones such as Huawei, OPPO, vivo, Xiaomi has risen one after another, and MediaTek can only find business opportunities in the low-end mobile phone chip market.
In the past ten years, MediaTek has lagged behind Qualcomm for a long time in advanced process chips. This time, the announcement of 5G chips is ahead of Qualcomm, and the price is higher than that of Qualcomm. This is a very unusual signal. The advancement of MediaTek has further consolidated the strength of Taiwan’s semiconductor industry, the implementation of ASE and Silicon Products, coupled with the further advancement of the heterogeneous integration of the packaging and testing industry, ASE will also play an important role, and Taiwan’s semiconductor industry lineup will be stronger.
Last year, after the market value of TSMC jumped to 8 trillion yuan, the power to support the localization of semiconductor equipment manufacturers has become stronger and stronger. The focus of Taiwan’s next capital market will be on the TSMC supply chain. The most representative is the Dutch equipment supplier ASML, which must use EUV masks for 7 nanometers, and Taiwan Jiadeng, which manufactures mask boxes, also rose sharply last year because of the mass production of mask boxes.
From the popularity of the global semiconductor equipment supply chain, we can also look back to see the business opportunities for TSMC to gradually enter the three-nanometer process from seven nanometers and five nanometers.
Jiadeng is a prominent example of the rise of many TSMC supply chain members, and the earliest jump was the Han and Tang Dynasties with clean room control electromechanical and special process design. In 2019, Hantang also obtained the third phase of the TSMC Nanke Five Nano Factory, and the EPS reached ten in the first three quarters. Six or seven yuan, the whole year may have the strength to challenge fourteen yuan. Before 2017, the EPS of Han and Tang Dynasties were all around 5 yuan, but in 2018, with the blessing of TSMC’s new process, the EPS of Han and Tang Dynasties was as high as 9 yuan. Four or two yuan, and this year, ten yuan in cash will be distributed to shareholders.
Fanxuan, a shareholder of Hon Hai Group, has also won orders for TSMC’s new process, and its operating interests in the first three quarters of this year will be unchanged. Five and one billion, one. 8.6 billion to two. 4.9 billion yuan, and is expected to challenge the four-yuan record in EPS for two consecutive years.
Taiwan-series semiconductor equipment factories are gradually growing. For example, Hongsu, which is mainly engaged in the hard work of the equipment factory and the back-end wet process, is developing rapidly, and Shihe, who is responsible for equipment cleaning, is also growing gradually; Yankee Engineering, which specializes in clean room motors and air conditioners, is waiting for opportunities However, it is expected to maintain a high profit status in the next few years.
We often say that a grain of rice feeds a hundred kinds of people, and an apple saves Taiwan. Now that this phenomenon continues, we can see that the capital expenditure of one TSMC may be able to expand the entire TSMC supply chain. In the past, TSMC equipment came from overseas, and ASML and Applied Materials were big suppliers of TSMC; in the future, if the equipment is gradually localized, it will depend on the equipment factories under TSMC to shine, which is the confidence it brings.
After the start of the US-China trade war, you can also see that Taiwanese companies facing competition from IC design factories in mainland China are also relying on R&D fundamentals to improve their competitiveness. The rise of MediaTek is an example of Taiwanese industries thriving on both sides of the strait. Now MediaTek is accelerating its lead, and its technical level is catching up with Qualcomm, which is also the legend of Taiwan’s semiconductor industry.
This year, Hon Hai and Largan have performed very smoothly. In addition, TSMC and MediaTek have broken through. This is the biggest reason for Taiwan stocks to reach a new high in 30 years. The prestige of Taiwan’s Silicon Island is also growing stronger as TSMC and MediaTek strive to improve.
Taiwan’s semiconductors are facing a huge fault! Will it be destroyed without innovation?
Facing the challenges of Taiwan’s semiconductor industry, Lu Chaoqun, chairman of Etron Technology (5351), said that semiconductor innovation power and talent sustainability will be the “generational needs” of the 21st century, including the driving force for industry players to compete with each other. Breakthroughs in design, software, etc., and even cultivate leaders who can see the overall situation and have advanced R&D and management. “If there is no innovation in semiconductors, it will be destroyed!”
The development of semiconductors is good. Why do we need industrial upgrading? Lu Chaoqun pointed out that Moore’s law (Moore’s law) is that technology is reversed every two years. The competitors are all excellent, and the manufacturers are all “heavyweight”. Big, even the founder of TSMC Zhang Zhongmou described it as a “gorilla”; the other is the design world, that is, to use manufacturing materials to make products, it requires Zhuge Liang’s ingenuity, “Whoever is negligent will complete a generation. Boxer.”
After 50 years of struggle in Taiwan’s semiconductor industry, how can this industry avoid becoming a “miserable business”, Lu Chaoqun said, “Anything wrong will be wrong, this is semiconductor”, that is to say, if there is no innovation in semiconductor, it will Destruction, even if Taiwan, China has come out on top recently, and all semiconductor companies in the world are staring at it to defeat Taiwan, China, and now there is no gorilla force, no intelligence of Zhuge Liang, China Taiwan industry still has to be nervous.
“The driving force for upgrading comes from constant competition!” Lu Chaoqun believes that semiconductors will be destroyed if they do not move forward. There are at least three things in semiconductor upgrading, manufacturing, design and talent. The manufacturing industry is ready to enter the 2nm process, which is two atoms. In terms of size, it is bound to break through many physical, chemical, and material limitations, and talents must be improved; while the design industry and software technology are the introduction of artificial intelligence (AI), heterogeneous integration, and atomic and molecular-level design.
Lu Chaoqun said that the semiconductor industry is facing a huge fault. To struggle and upgrade and make breakthroughs in Taiwan, China needs talents, but he is worried about the cultivation of talents related to computing and design; semiconductors need various talents, and someone needs to look at the overall situation. Leaders in R&D and management must be as proud as Linghu Chong. No ordinary people can survive. They must use the power of manufacturing to enter the atomic field. We need talents from generation to generation.” I hope everyone can help young people to be ambitious, talented, and capable of seeing the overall situation and even changing the world.
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