TSMC Logs First 10nm Sales

Release time:2017-07-14
source:Alan Patterson

Taiwan Semiconductor Manufacturing Co. (TSMC) has recognized its first revenue from 10nm products, trailing Samsung, its main rival in the foundry business, by nearly four months.

TSMC said that 10 nm accounted for 1 percent of its overall revenue during the second quarter of this year. In March, Samsung announced its first 10-nm products, including the company’s Exynos 8895 SoC as well as Qualcomm's Snapdragon 835.

TSMC expects to exit a slump that saw its second-quarter sales in dollar terms edge up just 3.2 percent from the same period a year ago. The company, which makes mobile communications products for Apple and MediaTek, said that an inventory correction among fabless customers will probably end during third quarter this year.

“We forecast our third-quarter revenue will grow by 15.7 percent quarter on quarter,” said TSMC Co-CEO Mark Liu at an event in Taipei to announce the company’s second-quarter results. “This growth is driven by a fast ramp-up of 10-nm mobile customer products.”

TSMC Co-CEO Mark Liu expects a fast ramp in 10-nm demand.
TSMC Co-CEO Mark Liu expects a fast ramp in 10-nm demand.

TSMC reiterated its expectation for 2017 sales growth to be in a range of 5 percent to 10 percent.

The company may see 10 nm sales climb during the second half this year as it uses the 10 nm process to make the A11 application processor for Apple’s iPhone 8. TSMC says it expects 10 nm to account for about 10 percent of its sales during the second half of this year.

Advanced Geometries
The company may gain an advantage over Samsung at the 7-nm node a year from now.

TSMC said its 7-nm yield is ahead of schedule and it expects a fast ramp in 2018. The company plans to insert several extreme ultraviolet (EUV) layers at 7 nm, but declined to provide details. The company also plans to offer a 7-nm plus node that it expects will allow customers easy migration from 7 nm.

At this point, TSMC has about 30 tape outs for 7-nm products.

TSMC added that its 5 nm roadmap is on track for a launch in the first quarter of 2019.

(Source: TSMC) 
Click here for larger image

Plugging the Gaps
In the meantime, the company has been filling gaps in its legacy process technology to blunt the competition.

TSMC has increased capacity for its 28 nm process, which accounted for more than a quarter of its revenue during the second quarter this year. The company, which has counted on 28 nm as a cash cow for more than five years, is hanging on to a 90 percent share of the market even as rivals such as Intel are trying to grab a chunk of that business.

“We aim to achieve full capacity at all nodes,” said Co-CEO CC Wei. “We believe we are the lowest-cost supplier.”

TSMC has introduced a 22-nm node between the 28 and 16-nm geometries that the company currently offers.

TSMC aims to offer 12 nm products based on its 16 nm technology after it completes 12 nm development work in the second half of this year. The 12 nm technology will be an “optical shrink” of 16 nm, which will allow customers to convert existing 16 nm designs easily, according to Wei.

Even so, there are some niches where TSMC plays second fiddle. At the 20/16 nm node, TSMC has faced strong competition from Samsung, which makes 14 nm products for Qualcomm.

Sales of TSMC’s 16/20 nm products dropped to 26 percent in the second quarter, sliding from 31 percent of total first quarter revenue and 33 percent during the fourth quarter of 2016. TSMC expects the 16/20 nm decline to continue during the third quarter this year.

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TSMC’s announcement last week that it expects its quarterly sales to decline precipitously quarter to quarter put the chip foundry market on notice as it begins what is expected to be a challenging year.TSMC (Hsinchu, Taiwan) said that it expects sales to decline nearly 14% quarter to quarter to between $7.3 billion and $7.4 billion. It would be the largest quarter-to-quarter sales decline for the world’s leading foundry since 2009.The expected shortfall has been largely blamed in weaker-than-expected sales of Apple’s newest iPhones, which features Apple-designed processors built by TSMC. But the weak sales guidance is also indicative of larger challenges facing the foundry industry, according to Bill McClean, a veteran semiconductor analyst and president of market research firm IC Insights.“The foundry market is in a difficult position in 2019,” McClean told EE Times in an email exchange. IC Insights said earlier this month that nearly all of the pure-play foundry industry’s growth in 2018 came from Chinese firms. TSMC alone saw its revenue from China increase by 61% last year, according to the firm.“Apple represented about 22% of TSMC’s sales last year, and we all know that Apple has backed down its expectations for this year,” McClean said. Apple earlier this month cut its sales forecast for the first time since 2002.Much of the growth in foundry business from China came from the cryptocurrency business, a market that has softened considerably amid a plunge in cryptocurrency prices, McClean said.According to McClean, the pure-play foundry market also faces technology challenges. “TSMC is the only pure-play foundry offering leading-edge feature-sized technology,” he said. “All of the other pure-play foundries are now labeling themselves as specialty foundries, offering embedded memory, image sensor, SOI, etc. technology at relaxed feature sizes.”The result has been a glut in specialty foundry capacity, according to McClean. Both TSMC and Samsung — an integrated device manufacturer that also offers leading-edge foundry capacity — are also players in the specialty foundry market, he said.“It is so bad now that most foundries talk about overcapacity at the 28-nm node lasting for a couple of years,” McClean said.IC Insights is currently forecasting that the foundry market will grow about 2% in 2019, the same growth rate that the firm has projected for the semiconductor industry as a whole.TSMC reported sales of $9.4 billion for the fourth quarter of 2018, up 10.7% compared to the third quarter of 2018 and up 2% compared to the fourth quarter of 2017. TSMC reported that 7-nm revenue was 23% of the company’s fourth-quarter total, while 10 nm accounted for 6% and 16/20 nm accounted for 21%.
2019-01-23 00:00 reading:768
On August 3, Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), the largest chip fabricator globally introduced a WannaCry Ransomware cryptowormvariant onto its information technology/operational technology (IT/OT) networks. A TSMC supplier installed infected software on a new fabrication tool and connected it to the network, facilitating the malware infestation.The infection spread quickly, taking out 10,000+ unpatched Windows 7 machines that run the chip fab company’s tool automation interface. The crypto worm crashed and rebooted systems endlessly, forcing several plants in Taichung, Hsinchu andTainan to shut down through much of the weekend.The infection crippled materials handling systems and production equipment as well as Windows 7 computers. Some of the plants were producing SoC chips for the AppleiPhone 8 and X models. The incident’s connection to Apple and the iPhone heightened its visibility in the news media.According to TSMC CEO C.C. Wei, patching for the Windows 7 machines requires computer downtime and collaboration with equipment suppliers. The absence of currentpatches created an environment where WannaCry could easily propagate.The 2018 Spotlight Report on Manufacturing published by Vectra a few weeks before the incident foretold TSMC’s infection, which could cost the company as much as $255 million.Smart manufacturer cybersecurity risks are increasingAccording to the TSMC website, the company had “introduced new applications such as IoT, intelligent mobile devices and mobile robots to consolidate data collection, yield traceability, workflow efficiency, and material transportation to continuously enhance fab operation efficiency.” Further, TSMC had “integrated automatic manufacturing systems,” according to its website.These innovations are typical in the evolution of Industry 4.0, which has increased the risk of cyber attacks against manufacturers.But as manufacturers moved from air-gapped industrial systems to cloud-connectedsystems as part of the IT/OT convergence – using unpartitioned networks and insufficient access controls for proliferating IIoT devices – they created a massive, vulnerable attack surface, according to the Vectra report.While air-gapped systems such as industrial controls have no connections by design to guard against malicious tampering, IT/OT convergence has connected these systems to information technologynetworks with little accounting for security vulnerabilities.Many factories connect IIoT devices to flat, unpartitioned networks that rely on communication with general computing devices and enterprise applications. Since IIoT devices support few if any native cybersecurity measures, connecting them to easily infected applications, computers and unsegregated IP networks only invites trouble.In the past, manufacturers relied on more customized, proprietary protocols, which made mounting an attack more difficult for cybercriminals. The conversion from proprietary protocols to standard protocols makes it easier to infiltrate networks to spy, spread and steal.Few if any cyberattackers know and understand the proprietary protocols those closed legacy systems used. But it’s easy for most criminal hackers and their exploits to access standard IP network protocols just as WannaCry abuses the SMB protocol where there is no patch.Real-time network visibility is crucial Industry 4.0 brings with it a new operational risk for connected, smart manufacturers and digital supply networks. The interconnected nature of Industry 4.0-driven operations and the pace of digital transformation mean that cyber attacks can have far more damaging effects than ever before, and manufacturers and their supply networks may not be preparedfor the risks.Wherever cyber attacks interfere business continuity for business and information processes, they can also disrupt operational technologies that render products and get them out the door.For cyber-risk to be adequately addressedin the age of Industry 4.0, manufacturing organizations need to ensure that proper visibility and response capabilities are in place to detect and respond to events as they occur. As in the case of the TSMC ransomware debacle, anything less than real-time detection and response is too little, too late to avoid production downtime.There is no visibility into these systems to enable real-time detection before cyber attacks spread. Visibility into these internal connected systems is necessary to curtail the extent of damage from a cyberattack.Manufacturing security operations now require automated, real-time analysis of entire networks to proactively detect and respond to in-progress threats before they do damage.The Vectra 2018 Spotlight Report on ManufacturingThe 2018 Spotlight Report on Manufacturing delineates the many attack types and behaviors that the Cognito platform captured. The Cognito threat-detection and hunting platform monitored traffic and collected rich metadata from more than 4million devices and workloads from customer cloud, data center, and enterprise environmentsto reveal the cyberattacker behaviors.Cyber attacks on manufacturers increased in severity from January to June 2018 based on data that the Vectra Cognito platform collected. The Vectra report confirms that all manufacturing industries are at equal risk of cyberattacks.To learn about other findings pertinent to your Industry 4.0 cybersecurity risk, download the 2018 Spotlight Report on Manufacturing.Christopher Morales is the head of security analytics at Vectra, a San Jose, Calif. cybersecurity firm that detects hidden cyberattacks and helps threat hunters improve the efficiency of incident investigations.
2018-08-28 00:00 reading:444
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