Chinese semiconductor industry

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tokenanalyst

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BUT Apple relent, a victory of sort for TSMC, now let see IF Nvidia prevailed, they're more focus on established 5nm chip than the new 3nm ,with massive downturn on their business , will they fight tooth and nail or follow Apple example and settled for a small increase.

TSMC Reportedly Overpowers Apple in Negotiations Over Price Increases​

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TSMC

(Image credit: TSMC)

Reports published by Taiwan’s business-orientated media indicate that Apple has yielded to TSMC’s
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demands for 2023, but as with all unofficial news, take it with a grain of salt. Last week The Economic Daily (UDN) said that it heard several TSMC customers had received notices of the intended price changes but that Apple had indicated it would
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any increases – with Nvidia watching closely for signs that TSMC is willing to negotiate. Today, the same source reports that
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the requested extra money for TSMC’s services in the coming year.

According to the reports, TSMC intends to up 8-inch wafer output prices by 6% and 12-inch wafers by between 3 and 5%. UDN said that it knows of several sources who confirmed this range of foundry price increases. Apple is a significant customer of TSMC, said to account for approximately 25% of its business. However, this doesn’t appear to have given Cupertino any significant leverage over TSMC, as today’s report says that the foundry would not budge in its price increase demands.


Nvidia has reportedly been watching from the sidelines for signs that TSMC will negotiate. However, with the apparent cave-in of Apple over the price increase demands, it doesn’t give much hope for Nvidia to cut its costs by putting the squeeze on
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.


The ‘secret’ of TSMC’s seemingly unassailable bargaining position is its broad customer base. The industry has been slammed with consumer downturns, most notably in demand for consumer semiconductor-reliant consumer products like
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, smartphones, and storage devices. However, some of TSMC’s customers are still riding a strong wave of demand in H2 2022 and looking positive about the coming year. Technology segments highlighted by UDN for their continued buoyant demand include; automotive, data center, and HPC.



Lastly, UDN shares an anecdote about TSMC’s reputation for ‘reasonable’ behavior, which has softened opposition to its requests for price increases in the face of a worldwide recession. Apparently, TSMC only sought ‘modest’ price increases in previous boom periods. Hence, insiders see the current 5% or so increases as reasonable, especially with higher inflation, and raw materials costs swinging up in most regions.
Apple could still cut orders to make for the price hike.
 

tphuang

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So, I think it's important to examine the effect of such a sanction. It's well known that China had built 2 supercomputers back in 2021. One with Sunway CPUs and the other with Phytium. They were subsequently sanctioned. There is a good article here just talking about how you can build supercomputers with Phytium chips and later got sanctioned. Keep in mind that Phytium had been using "mature technology". It's S2500 is 16 nm process and D2000 is 14 nm process.
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In Nov 2020, Phytium came out with their 14 nm CPU produced by SMIC. This is now in mass production with over 2 million sales in just over a year.
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Now originally, Phytium had plans for more advanced S5000 to come out at Q3 of 2021 using TSMC 7 nm process and S6000 to come out at end of 2022 using TSMC 5 nm process. That plan got destroyed with the entity list. I guess TSMC was able to continue to produce S2500 chips since it was using 16 nm process, but anything below 14 nm is considered to sensitive.
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IIRC, @PopularScience mentioned that SMIC will be producing chips for Phytium with N+1 process this year. Since D3000 is still using 14 nm technology, I would assume this is an updated version of S5000 to be produced by S5000. From this, it seems like the entity list move effectively pushed back Phylum's progress with S5000 by probably a year (maybe even less than that). Now, you may ask, isn't SMIC's N+1 process between 7 and 10 nm, so won't be as good as TSMC's 7 nm improved process? Well ->

Back in January of this year, China mobile had signed partnership with Phytium to use their S2500 cloud CPUs. You see the certificate that says S2500 passed all the tests required by China mobile
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In March of this year, it was reported that 27% of the 200k server CPUs for China Telecom were using Chinese produced server CPUs.
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If you look at this, Intel had 71% market share and Chinese players at 27%. This is down from previous year when Chinese players had 35% market share. However, the overall bid almost tripled, so Chinese players actually won't pretty large order here. More importantly, Kunpeng and Hygon chips from a year ago are no longer options, so S2500 from Phytium must have won most of this. It's well known that they have been providing server CPUs to both China Telecom and China Mobile
据该公司相关人士介绍,这是飞腾首次进入运营商服务器领域,不过最终落地规模还需要看实际需求,“飞腾下一代服务器芯片产品将在性能、接口、IO等方面进行提升,适用不同场景对算力的需求”。
For a first time entry by Phytium into cloud CPU market, they've done well. Their next generation CPU should be significantly improved. So this indicates that S2500 is satisfactory for the domestic market now, but you probably want to move to N+1 process on the next procurement. Even with the old technology, S2500 has won a lot of orders. Its benchmarks look fine.

Moving away from Phytium, Chinese domestic GPU makers like Biren, Kunlun, Cambricon or Hanbo that are using 7 nm TSMC/Samsung tech could be facing a one year delay in their production if TSMC is cut off from them. As such, it would be best if they can stock up enough chips from TSMC for 1 year of supply at least. By this point next year, the SMIC N+2 process should be in mass production and be a good replacement for all the Server CPU/GPUs that are currently being designed around 7 nm process. The only concerning one from I can see is Alibaba's Yitian-710. That one is built with Samsung's 5 nm process. Alibaba might need to wait until 2024 for SMIC's N+2 improved process. As such, Alibaba will need to stock up a lot of Yitian-710 if at all possible.

It seems like such a move is going to hurt TSMC more than anyone else. Any of these HPC and auto chip designers that have been working with TSMC will no longer be able to work with TSMC.
 

manqiangrexue

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Number 4 is most impressive because it's the US making the same mistakes over and over again with China, giving China a little push and causing China to indigenize a tech. Bringing it up reveals the guy isn't balanced. No one has even done so much good for the Chinese semiconductor industry than the US and it will cost them everything in that realm going from leaders to laggards as they awaken Chinese industry to its perils. And America only flails this way because of desperation as China reminds it of the mortality of America's dominance.
 
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