In recent years, the three giants of global wafer foundries TSMC, Intel, and Samsung have intensified their competition, announcing expansion plans and making large-scale investments.
Intel's New Model Starts Transformation
Originally, Intel only served self-produced products, and adopted the IDM model, covering all processes from chip design to production to sales. Most of the products are manufactured in-house. Later, Intel proposed the IDM 2.0 model, which not only needs to entrust an external chip foundry to produce its own chips, but also develop its own chip foundry business, establish Intel's foundry service IFS business, and return to the chip foundry industry.
Source: Intel
The basic idea of this model is that IFS has grown in the process of serving chip customers, chip manufacturing has become more and more advanced, and products have become more competitive, and IFS is not limited by external foundry capacity, forming a complementary and positive development trend. But in fact, Intel has to produce chips for itself, but also hand over its best chip products to competitors. This is a very contradictory issue.
However, TSMC and Samsung cannot meet the needs of all customers, and the diversified foundry strategy has become the choice of many chip design manufacturers. This also provides a fulcrum for Intel's IDM 2.0 plan.
In July 2022, Intel announced that it will manufacture chips for MediaTek. MediaTek maintains close cooperation with TSMC on advanced process nodes, and the cooperation with Intel will help strengthen its supply of mature process nodes.
In September 2022, Pat Gelsinger said that Intel foundry services will usher in The Era of System-level Foundry. Intel will provide wafer manufacturing, packaging, software and chips, bringing new options to chip companies.
Wafer manufacturing is aimed at providing customers with innovative advanced process technologies, such as RibbonFET transistors and PowerVia power supply technology and other innovations. Advanced packaging technologies include EMIB and Foveros. Intel's packaging technology will work with common chips through the Small Chip Interconnect Industry Alliance (UCle) to help chips from different suppliers, or produced by different process technologies, work better together. In addition, Intel's open source software tools including OpenVINO and oneAPI accelerate the delivery of products, enabling customers to test solutions before production.
In addition to System-level Foundry, Intel also plans to create a greater separation of decision-making between its chip design and manufacturing, make the production line operate like a fab business, and treat orders from Intel's internal and external chip companies equally.
Intel has also made progress in terms of development route and production capacity. Intel has made a plan to accelerate process development, overturned the traditional chip naming method, and formulated a detailed development route to 2025, which will promote Intel 7, Intel 4, Intel 3, Intel 20A, Intel 18A five process nodes.
Among them, Intel 20A is a process that competes with TSMC's 2nm, and the more advanced Intel 18A is a layout below 2nm. It can be seen that Intel is trying to form a tripartite pattern with TSMC and Samsung in the foundry industry and occupy a place in the advanced process chip market.
Samsung is the First to Mass Produce 3nm Process Technology
Intel plans to overtake Samsung's foundry business by 2030, but Samsung isn't without plans. As early as 2019, Samsung set a goal of surpassing TSMC in the next 10 years. Samsung invests heavily and recruits talents. In addition to the continuous increase in advanced manufacturing processes, semiconductor equipment and materials, IC substrates, advanced packaging and other fields related to foundry have become the focus of its aim.
Source: Internet
Samsung's achievements in advanced manufacturing processes cannot be underestimated. As one of the two foundries in the world that can produce processes below 5nm, Samsung's strength is beyond doubt. But in the previous stage, compared with TSMC, Samsung was always one move away. At this stage, Samsung's 3nm process is the first to adopt GAA technology, ahead of TSMC, and has become the world's first 3nm process foundry. It plans to launch a second-generation 3nm process in 2023, a 2nm process by 2025, and a 1.4nm process by 2027.
The plan is possible, but the scale and yield of mass production is the threshold that Samsung needs to cross. It is understood that Samsung’s 4nm yield rate has continued to increase from 35% in early 2022. Compared with TSMC’s 4nm rate of 70%, Samsung still has a way to go.
TSMC Still Has Great Advantages in Advanced Manufacturing Processes
Intel's transformation, Samsung's yield rate improvement, what strategy will TSMC adopt? In recent years, TSMC has been working hard to expand production to meet the needs of global customers. At present, TSMC's 5nm fab Fab21, which has invested US$12 billion in Arizona, USA, has held the first batch of machine equipment transfer ceremony on December 6, 2022, and a large number of engineers have already gone there. TSMC founder Zhang Zhongmou also confirmed the news that a 3nm factory will be built in the United States, which will be TSMC's third fab in the United States.
The main reason for TSMC to go to the United States to build an advanced process fab is that the proportion of American customers in total revenue is continuously increasing. According to statistics, the United States will be TSMC's largest sales market in 2021. In addition, going to the United States to build factories is also conducive to meeting the security needs of the supply chain.
Source: Internet
With the improvement of TSMC's process technology, the manufacturing cost of 3nm process technology has risen, and it is expected that the price of wafer foundry will also rise. This also means that the harsher the semiconductor equipment and materials, it will directly lead to an increase in manufacturing costs.
Compared with its competitors, TSMC occupies most of the market share, and its development in the field of advanced manufacturing is relatively smooth. Although the 3nm process technology has not yet been mass-produced, compared with Samsung, TSMC's yield rate has reached 80%. It is also reported that TSMC's 2nm risk trial production yield has exceeded 90%, and large companies such as Apple and Intel will also be the first customers of TSMC's 2nm process. At present, Apple has pre-ordered its M3 processor to use TSMC's 3nm process.
With TSMC's advantages in advanced manufacturing processes, Samsung and Intel are still unable to surpass for the time being. According to TSMC's 2021 financial report, advanced manufacturing processes accounted for almost half of its revenue. Among them, shipments of 5nm chips accounted for 20%, and 7nm chips accounted for 30%. Therefore, in the face of competitors catching up, TSMC is still very sure to stabilize its position in the market, and even further widen the gap with rivals.