Taiwan Semiconductor Manufacturing Company (TSMC) has obtained a bunch of new orders, mainly advanced AI solutions, however requiring 7nm and 5nm process capacities in 2019, according to industry sources. Yes, there now already is talk of 5nm in 2019.
TSMC has started commercial production of 7nm chips for smartphone SoCs, and is gearing up for 5nm chip production next year. The foundry has secured new 7nm and 5nm chip orders for 2019 from mainly AI chip developers, the sources indicated.
TSMC is expected to see demand for 7nm and 5nm chips from AI chip companies stronger than that from other chip firms in 2019, given that AI solutions demand greater computing performance and lower power consumption, the sources said. AI chip developers' ability to attract additional capital is also encouraging the firms to pursue sub-10nm node technologies, the sources continued.
Instead of smartphone SoCs, orders for AI chips are set to be the key driver of demand for TSMC's 7nm and 5nm process technologies, the sources believe.
Qualcomm and MediaTek have introduced recently smartphone chips utilizing 12/14nm process indicating their efforts to enhance offerings for the mid-range and upper mid-range segments, the sources noted. Fabless chipmakers have increasingly put emphasis on the development of cost-efficient solutions, and put less focus on pursuing state-of-the-art semiconductor technology, the sources said.
As handset SoC suppliers have been encountering deceleration in the smartphone market and falling product ASPs, they have been cautious about advanced chip development and are taking a more rigorous R&D expense control prior to the arrival of 5G, the sources indicated.
On the other hand, demand for AI chip solutions is looking to boom for emerging applications such as data centers, smart cities and connected health, as well as niche-market applications including autonomous driving, big data analytics, robotics, and FinTech.