Recently, Taiwanese media "Apple News" invited Huang Chongren, founder of Taiwan Powerchip Group, to discuss the reasons behind the current wave of the largest shortage in semiconductor history.
The reason behind the biggest chip shortage in history
Huang Chongren said that this wave of strong demand comes from mature manufacturing processes. No one has expanded production in the past few years, and the development of applications such as 5G, AI, and automotive electronics has just begun. The current shortage of goods is difficult to solve. It is the "price decision" to get the capacity.
Huang Chongren explained that since 2016~2019, the global foundry business has been stable. Only TSMC’s advanced manufacturing process has been growing. However, the demand this time has all come from mature manufacturing processes over 40 nanometers. China's development has been hit by the trade war and not as expected, making the global production capacity of mature processes seriously in short supply.
Huang Chongren also said that this wave of shortages far exceeded expectations. I knew three months ago that there would be a shortage of materials. I had to answer many calls from my boss every day to produce capacity. I previously said that it would cost a few thousand pieces. There were hundreds of pieces, and it started to become dozens of pieces last week. It is conceivable that the production capacity of even dozens of pieces will be grabbed, which shows the tightness of the shortage.
When will the shortage of wafer manufacturing capacity be relieved? Huang Chongren called out, "It's really difficult!" Previously, we had a meeting with Taiwan's "Minister of Economy" Wang Meiguang to discuss car chips. All of our five manufacturers said that there was no capacity to squeeze out. The status of Taiwan's semiconductor industry has once again been valued by all countries due to the outbreak of the epidemic and the shortage of automotive chips.
First of all, Huang Chongren said that observing the world's semiconductor manufacturing, Huang Chongren said that from the six major regions of the United States, Japan, Taiwan, China, Singapore, and the European Union, Taiwan is the cheapest and most competitive, while TSMC is close Over the past few years, we have focused on advanced processes below 14nm. TSMC is dominated by advanced process technology. In addition, the customers served are Huida, Chaowei, Xilinx, Qualcomm, Apple, HiSilicon/Huawei, so the production capacity is easy planning.
Taking Chaowei as an example, Huang Chongren said that after Chaowei changed its strategy and outsourced its manufacturing to TSMC, it succeeded in catching up with Intel. After all, the investment cost to build a 12-inch factory was too great.
Second, Huang Chongren said that looking back from 2016 to 2019, the global foundry business was very stable. Only TSMC’s advanced manufacturing process has been growing. Therefore, in the past, almost no one expanded production in the mature process above 40 nanometers. It is hoped that the production capacity in mainland China will rise, but it is also suppressed by the US government and no new production capacity is available. Now everyone is unwilling to expand the production capacity of the mature process in the old 8-inch factory.
From the perspective of demand, Huang Chongren further said that applications such as 5G, AI, and automotive electronics have just begun to develop. For example, in the 4G era, there are up to 500 million information streams, and 5G has up to 60 billion information streams. There are as many as 60 billion devices, all of which require a variety of ICs, memory, etc. The power management chips in 5G mobile phones are 2 to 3 times more than 4G mobile phones.
Huang Chongren explained why the lack of capacity is so fierce. The power management chip has increased several times. The 8-inch production capacity of UMC and the world’s advanced has been filled, and further crowded out to the panel driver IC, resulting in the transfer of the order of the driver panel IC. Go to the mainland.
Another big business is CIS sensors. Huang Chongren said that in order to compete with Sony in the market share of CIS sensors, Samsung switched DRAM production equipment to CIS sensors. Huang has nearly 30 years of experience in the semiconductor industry. He said bluntly, "I am very precise about the price of DRAM. As soon as I saw Samsung and SK Hynix shift their consumer memory production lines to CIS sensors, I knew that DRAM would be out of stock. Up."
Huang Chongren sighed that it is already difficult to solve the needs of 5G and AI alone, not to mention automotive chips. Major automotive chip manufacturers include Infineon, STMicroelectronics, NXP, Renesas, etc. TSMC originally told customers not to cut orders. Once the orders are cut and the next customer fills them up, they can no longer release production capacity. Now there are millions of cars in the world that cannot be shipped. In fact, the chips are only a few hundred yuan. But the car is worth millions of dollars, but because the chip can't leave the factory.
Huang Chongren bluntly said that the shortage of stock this time is not driven by the previous demand for laptops, monitors, and TVs. There are also trends such as 5G, AI, and auto automation ushering in. Who should sacrifice now? In the global wafer shortage tide, every manufacturer is willing to accept price increases. When everyone wants to grab production capacity, they must use "price to determine victory or defeat," and bidding capacity has become a current phenomenon.
Huang Chongren is optimistic about the prospects of Taiwan’s foundry industry. He said, “The shortage of goods is difficult to solve. Now there is a shortage of everything. The only thing that is not short of goods is NAND Flash.” From the perspective of foundries, profits are not only It will go up, and the price will systematically go up. According to the Moore's law of semiconductors, the price will definitely fall. Now it is the other way round. This year's average price will increase a lot compared to last year.
How do you view the development of the semiconductor industry in the mainland?
Huang Chongren, founder of Powerchip Group, believes that it is difficult for China to develop semiconductors.
Huang Chongren said that the semiconductor industry is very sophisticated. The mainland does not have the same precision as Taiwan. The mainland will succeed in LED, solar, and panels. These are standardized, but semiconductors cannot. "The development of semiconductors requires a complete team. It is not enough to spend money to build a factory!" Huang Chongren explained the key.
He said, taking TSMC’s veteran Jiang Shangyi as an example, Jiang’s father does not have a team, and TSMC’s success is a consistent strategy, from beginning to end execution, the entire team is complete, and it can’t be done by just recruiting troops.
In addition, Huang Chongren also revealed that Fujian Jinhua, which was supported by UMC's technology at the beginning, was a complete team and the possibility of development was high. At that time, Micron also discovered one point, so it decided to take a big action to initiate an infringement lawsuit.
According to reports, from 1996 to 2010, UMC has accumulated nearly 15 years of DRAM manufacturing experience, and the internal DRAM team once exceeded 150 people. With this solid and stable team, UMC has a wealth of DRAM knowledge and experience. Shanjie Jian, currently one of the joint general managers of UMC, served as the RAM process development manager for the development of DRAM products in 1996. In addition to traditional DRAM technology, UMC has successfully developed its own embedded DRAM process technology in 2009, which is much more complicated than the process of manufacturing standard DRAM. In the cooperation with Jinhua, there are nearly 300 R&D team members responsible for the DRAM project. It can be seen that the lawsuit initiated by Micron against Jinhua and the subsequent sanctions imposed by the US government are more like a "self-help" operation initiated by fear of competitors growing up.
Recently, Samsung has also actively invested in CIS production capacity and advanced process layout. In this regard, Huang Chongren said that I am not afraid of Samsung, because Samsung is an IDM factory, and the largest department is memory. When it has its own products, all resources and benefits are To give your own products, outside customers will not get the best products.
For example, Huang Chongren pointed out that Samsung has adopted EUV for its own memory. For example, the graphics chip manufacturer nVidia was going to Samsung for filming for a while, and the price was 25% cheaper. It turned out that it was still not as good as TSMC’s. Product. In the past, as long as I heard about Samsung, I was frustrated. Looking forward to the next 3 to 5 years, whether it is TSMC or Taiwan’s foundry industry, it is very stable.
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