TSMC, SMIC, UMC See Sales Increase As Chip Shortage Increases

Memory chips are seen in a Samsung Electronics memory module in this photo arranged in Seoul, South Korea, Thursday, July 26, 2018.

SeongJoon Cho | Bloomberg | fake images

The world’s 10 largest chip-making companies saw their revenues rise to a record high in the first quarter of 2021, according to market research firm TrendForce.

The combined total quarterly revenue of chipmakers, known as foundries, rose to a record $ 22.75 billion in the first quarter, according to a TrendForce blog posted Monday.

The chips are used in everything from cars and game consoles to washing machines and toothbrushes. They are part of the lifeblood of the global economy and vital to many of the world’s most important industries. But they are also in short supply, and the shortage could last until 2023.

“Due to the increasing demand for various end devices, manufacturers have increased their component procurement activities and as a result, foundry capacities have been in short supply since 2020, and several foundries have increased wafer prices and adjusted their mixes. of products to ensure profitability. TrendForce analyst Joanne Chiao wrote.

About 57% of the world’s chip foundry revenue in the last quarter was generated by a Taiwanese chipmaker: TSMC, or Taiwan Semiconductor Manufacturing Corporation.

The Taipei-based firm saw its revenue rise to $ 12.9 billion in the first quarter, up 2% from the first quarter of 2021, according to TrendForce, which analyzed how well each of the various chips sold from the company.

And the European Union have said they want to be more self-sufficient when it comes to semiconductors, since the vast majority of the world’s chips are made in Asia.

TSMC Chips

TSMC’s 7, 12 and 16 nanometer (nm) chips are the company’s main revenue drivers, according to TrendForce.

“Revenues from the 7nm foundry service have continued to grow at a steady pace thanks to orders from AMD, MediaTek and Qualcomm,” said Chiao, adding that sales increased 23% in the last quarter.

Meanwhile, 12nm and 16nm chip revenue has “grown due to demand related to MediaTek’s 5G RF (radio frequency) transceivers and Bitmain’s cryptocurrency mining machines,” TrendForce added, highlighting how sales increased by almost 10% in the last quarter.

However, sales of TSMC’s smaller and more innovative 5nm chips saw a quarterly decline, Chiao said, adding that the main reason is that Apple (TSMC’s largest 5nm customer) “entered the off-season for the production of devices ”.

The storm hurts Samsung

On the other hand, South Korean chip giant Samsung saw its foundry revenue drop 2% in the latest quarter to $ 4.1 billion.

Chiao said that’s partly because a freak winter storm in February in Texas caused power outages in Austin and forced Samsung to temporarily stop producing chips at one of its plants in the state.

Elsewhere, United Microelectronics Corporation of Taiwan saw its quarterly revenue increase 5% quarter-over-quarter to $ 1.6 billion, while China’s SMIC saw a 15% increase to $ 1.1 billion.

TrendForce expects chip foundries to see further revenue growth as prices for the chip wafers they produce continue to rise and demand persists.

He said total quarterly revenue for the top 10 foundries “will again hit an all-time high” as they see a 1-3% increase on a quarterly basis for the second quarter of 2021.

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