TSMC 4nm trial production semiconductor capacity upgrade one quarter ahead of schedule brings a new round of upstream market take-off?

Yesterday, at TSMC's 2021 technology forum, TSMC announced that trial production of 4nm was expected to begin in the third quarter of this year, one quarter earlier than previously planned, while the 3nm process was scheduled for mass production in the second half of 2022. At the meeting, TSMC launched N5A, a new process technology for automotive chips, which will be mass-produced in the third quarter of next year to meet newer and more enhanced automotive applications. At the same time, it also revealed that the 2nm process has just entered the stage of formal research and development.

Affected by the external epidemic, the economic business cycle, and the capacity / inventory of the industry, semiconductor production capacity has entered the current stage of serious imbalance between supply and demand. Zheng Zhenxiang of Guosheng Securities said that this round of Gaojing demeanor is expected to be maintained for a long time. The world's leading wafer foundry will invest in semiconductor equipment on a large scale between 2021 and 2023, and the current industry boom is expected to be the beginning of a new round of industrial leap.

Last week, TSMC held a law conference in the first quarter of 2021. TSMC's revenue and profit margins are close to the previous guidance. It forecasts that the semiconductor market (excluding memory) may grow by 12% in 2021, while the semiconductor contract manufacturing industry will grow by 16%.

In the short term, under the stimulation of demand for PMIC, driven IC and power devices, the utilization rate of main wafer foundry capacity has all exceeded 95%, maintaining a high position. Previously, TSMC raised its capital expenditure in 2021 to $30 billion (previously expected to be $25-28 billion), of which 80 per cent was spent on advanced processes such as N3, N5 and N7, 10 per cent on advanced packaging and masks, and 10 per cent on special processes. Guosheng Securities pointed out that with TSMC and other wafer manufacturers starting a new cycle of production expansion, technology upgrading, wafer production transfer to the mainland, and strong support from domestic policies, China's semiconductor equipment and materials market has ushered in a new upward cycle.

Specific to the investment route, the recommendations focus on: 1) semiconductor core design: optical chip, storage, simulation, RF, power, FPGA, processor and IP industry opportunities; 2) semiconductor contract manufacturing, closed testing and supporting service industry chain; 3) Apple industry chain core leader.

TSMC related listed companies, to pure technology high-purity process system has been cut into the first-line users, users are SMIC, Changjiang Storage, Samsung, TSMC and so on. Nanda Optoelectronics special gas customers cover TSMC, SMIC, BOE and other front-line manufacturers in the field of integrated circuits and panels. Others in TSMC's supply chain are Jacques Technology, Watt Gas, Anji Technology and other targets.