TSMC, SMIC, UMC see gross sales surge as chip shortage rages

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

SeongJoon Cho | Bloomberg | Getty Images

According to the market research company TrendForce, the 10 largest chip manufacturers in the world saw sales increase to a record high in the first quarter of 2021.

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

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 are vital to many of the world’s largest industries. But they’re also scarce – and the shortage could last until 2023.

“Due to the increasing demand for various end devices, manufacturers have stepped up their component sourcing activities and as a result, foundry capacity has been tight since 2020. Various foundries increased their wafer prices and adjusted their product mixes to ensure profitability,” wrote TrendForce analyst Joanne Chiao .

Around 57% of global chip foundry revenue last quarter came from a Taiwanese chip maker: TSMC or Taiwan Semiconductor Manufacturing Corporation.

According to TrendForce, which analyzed how well the company’s various chips were selling, the Taipei-based company’s revenue rose to $ 12.9 billion in the first quarter, up 2% from the first quarter of 2021.

The US and the European Union have stated that they want to be more independent when it comes to semiconductors, as the vast majority of chips around the world are made in Asia.

TSMC chips

According to TrendForce, TSMC’s 7, 12 and 16 nanometer (nm) chips are the company’s mainstay of sales.

“Revenue from the 7nm Foundry service has grown steadily thanks to orders from AMD, MediaTek, and Qualcomm,” said Chiao, adding that revenue was up 23% compared to the last quarter.

Meanwhile, sales for 12nm and 16nm chips have grown “due to the demand for MediaTek’s 5G radio frequency transceivers and Bitmain’s cryptocurrency mining machines,” added TrendForce and highlighted that sales were up almost 10% compared to the last quarter.

However, sales of TSMC’s smallest and most innovative 5nm chips have declined quarterly, Chiao said, adding that the main reason is because Apple (TSMC’s largest 5nm client) “has entered the off-season for device production “.

Storm hurts Samsung

South Korean chip giant Samsung posted a 2% drop in revenue to $ 4.1 billion last quarter.

Chiao said this is in part because an unusual winter storm in Texas in February caused power outages in Austin, forcing Samsung to temporarily halt production of chips at one of its factories in the state.

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

TrendForce expects further sales growth for the chip foundries as the prices of the chip wafers they manufacture continue to rise and demand continues.

The quarterly total sales of the top 10 foundries will “again reach an all-time high” by increasing by 1-3% in the second quarter of 2021 compared to the previous quarter.

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