Taiwan-based chipmakers are mostly engaged in the non-memory semiconductor market, where demand is expected to start recovering gradually in the second quarter of 2019, according to Mark Liu, chairman for Taiwan Semiconductor Manufacturing Company (TSMC).

On the sideline of a TSIA (Taiwan Semiconductor Industry Association) event where Liu was elected as chairman of the association, Liu indicated that a number of variables including unfavorable global trade conditions and macro development are affecting negatively not only the semiconductor sector but also other industries. For the non-memory IC segment, the outlook is still promising amid opportunities arising from the emerging AI and 5G applications, Liu said.

The overall semiconductor market had a slow start in 2019, due mainly to sluggish smartphone sales. Nevertheless, the availability of forthcoming 5G devices is definitely a positive sign for semiconductors, Liu said.

Liu is also positive about more players involved in their in-house chip development. TSMC initially had fabless chipmakers as its major clients, but has expanded its customer portfolio to include IDMs and system vendors, and even Internet giants, according to Liu.

Liu believes that rather than competition, more cooperation has taken place among fabless chipmakers, system vendors and Internet companies. As a pure-play foundry, TSMC is positive about such development, he said.

Commenting on the defective photoresist chemical disrupting production at his foundry house earlier this year, Liu admitted the incident prompted TSMC to implement a thorough review of the entire system internally but allowed the company to realize that the progress of its advanced technology development should be made "faster and deeper" through more effective and efficient engineering work.

With regards to the establishment of TSMC's new 8-inch fab, Liu said the additional 8-inch fab capacity will add value to TSMC in terms of quality rather than quantity. At the new facility, TSMC intends to provide 8-inch fabrication services that differ from those of its counterparts, Liu noted. TSMC will be offering more complex and specialized 8-inch foundry services, Liu continued.

As for advanced packaging, Liu disclosed that nearly US$3 billion in revenues will be generated from the business in 2019. TSMC's advanced packaging is basically 3D IC packaging, said Liu, adding that the business will be growing thanks mainly to demand for high-performance computing applications. For TSMC, advanced packaging is considered a "high value-added business," and will play a critical role in its process technology advancement, according to Liu.

"We made some important concessions," he said, adding that if "the U.S. still wants more, then that starts to unbalance the agreement and there may be a growing opposition in Mexico."

By: DocMemory
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