"Before the emergence of Xinxin, there were only three players in the field of chip foundry, TSMC, Intel and Samsung, because Intel and Samsung both have products for individual consumers, so only TSMC's customers among these three companies are completely from external companies.

Previously, our practitioners did not think that there was anything wrong with this, because of the high degree of professionalism of chip foundry and chip design, IDM was limited by risks and operating costs and could not compete with the Foundry model.

The risk of the IDM model is that you need to do chip design and manufacturing at the same time, and once the sales are not as expected, you will face high losses, and then you need to feed two types of talent at the same time, which is also the cost.

The Foundry model only requires you to do a good job in chip design, and while reducing the cost, you can also adjust the production strategy according to sales expectations, and the cost of the production end is borne by the foundry.

From the beginning of the 90s to the millennium, TSMC's Foundry model was welcomed by the industry because of its low cost, and the industry gradually believed that this model would be the main development direction of chips in the future.

So much so that the non-critical wafers of the industry giant Intel are handed over to TSMC foundry, and they are only responsible for the production of core wafers. And Xinxin has once again pulled the industry's attention back to the IDM model, IDM is to take more risks, and once your products can be sold, your profits will increase a lot.

This change in concept has led to IDM factories like Intel and Samsung choosing to hand over wafer manufacturing to their own factories, while small and medium-sized chip design companies are more willing to cooperate with new chips with low unit costs, and TSMC's market share is constantly being eroded.

TSMC is not only facing strong competition from Xinxin on the revenue side, but also not as good as a year in terms of talent attraction. In the past, TSMC was able to attract senior talents from Huaguo Semiconductor, but now their first target is Xinxin, followed by TSMC."

This blog is a relatively in-depth analysis of the problems faced by TSMC, and the blow of the new chip to the chip industry in the bend area is all-round.

Originally, TSMC walked on two legs, Intel and Apple, but now Intel has been poached by Xinxin, and a large part of TSMC's orders are either made by Intel itself or for Xinxin. Not to mention Apple, which has nothing to do with TSMC.

It is almost impossible for TSMC to take advantage of the mobile Internet to ride the dust in the field of chip foundry.

And the last issue mentioned in the blog, TSMC's declining attraction to talent is crucial.

After Zhang Zhongmou retired and Liu Deyin took over as CEO of TSMC, they relied on their strong position in the field of chip foundry and were able to siphon talents from all over Asia except neon and Korea.

Like Zhang Xiaoqiang, graduated from Tsinghua University, Tsinghua in Yenching is not the one from Hsinchu, Ph.D. in electrical engineering from Duke University, joined TSMC after coming out of Intel and became the vice president of the technology department all the way, and after Jin Pingzhong retired, Zhang Xiaoqiang took over the position of head of the business department.

There is also Huang Hansen, a bachelor's degree from the University of Hong Kong, a Ph.D. from Lehigh University, and a professor in the Department of Electrical Engineering at Stanford, who made the world's first computer assembled by carbon nanotubes in 2013 and appeared on the cover of Nature magazine.

After the rise of Xinxin, talents like Zhang Xiaoqiang and Huang Hansen will be attracted by Xinxin first, rather than TSMC.

"At the time of the general election, we like to use the golden cross to describe the support of the originally lagging candidate who has overtaken the leader, and the gap will get wider and wider after this overtake is realized.

Recently, with the completion of Xinxin's acquisition of ASPLA, a large number of practitioners in the chip industry and financial media on the island have used this word to describe the golden intersection between Xinxin and TSMC, what do you think about this, Mr. Liu? ”

In order to stabilize the morale of the military, Liu Deyin personally came out for TSMC and participated in a business talk show in Zhongtian.

It is also interesting to say that Liu Deyin expressed his views on Wutong in an exclusive interview with the New York Times in the future, and the headline of the media on the island was: "Liu Deyin said that if Wutong happens, the world order will collapse." ”

The headline in the mainland media was: "TSMC Chairman Personally Refuted Silicon Shield Claims to Protect Taiwan."

As for what the specific New York Times interview is and what Liu Deyin's real views are, the media doesn't want you to know.

To put it bluntly, Liu Deyin is the old blue man's point of view, and it is best to maintain the status quo and not delay TSMC to make money.

Now there is a new chip to put pressure on him in an all-round way, so that TSMC can not parry, and the financial crisis makes it very difficult for TSMC to raise funds at this point in time, and it needs to bear huge capital costs.

"I don't quite agree with this statement of the golden cross, because we are not a zero-sum game with Xinxin, and there is competition and cooperation between us at the same time.

The market for wafer foundry is very large, and it is not something that one manufacturer can do, it can accommodate us, Xinxin, Intel, Texas Instruments, and so on at the same time.

The golden cross describes a situation where there are only two competitors in the market, and then there is an absolute zero-sum game, and the winner takes all in the end, so I don't agree with this statement.

Not to mention Xinxin and Intel, they are one type, and we and SMIC are the same type. Liu Deyin needs to refute this kind of statement.

Because of the comparison between TSMC and Xinxin, the stock price of TSMC in the U.S. stock market will not want to turn over in a short time, and even have to fall.

He knows very well that in the face of new chips, TSMC has no advantage at all, and if investors benchmark TSMC and new chips, no one will choose TSMC.

For the primary market, it would be good for us to invest directly in the new new factory, and basically fix the dividend of about 7% to you every year, isn't it fragrant?

The investors who believe in value investing in the secondary market don't want to invest in TSMC, and not being a leader means that they can't enjoy added value.

Therefore, Liu Deyin wants to reshape the market's view of TSMC and Xinxin, TSMC's competitors are SMIC, Huahong, and Shenhai Belling, and we are a competitor on the track.

As long as your competitors change fast enough, you will always be number one.

"Oh, this statement is very interesting, so the view on the market is wrong, Xinxin and Intel are in direct competition, and Xinxin's biggest competitor is Intel?" The host wondered.

To put it bluntly, he is also here to cooperate with Liu Deyin to create this image, so he just needs to do a good job of praising it.

Liu Deyin nodded violently: "That's right, before the birth of Xinxin, Intel was the only company that survived to the IDM model, which is what we call design and manufacturing."

At the beginning of its birth, Xinxin's goal was to be a chip foundry, which was a chip manufacturing enterprise established against TSMC, but with the hot sales of Mphone around the world, Xinxin's main business goal became to help Mphone design and produce chips.

Later, with the launch of Xinxin's own brand Xiaomi and Bluetooth chips, this concept was further strengthened, and Xinxin can not even meet its own internal chip supply, let alone receive orders from outside companies.

On the contrary, part of the demand for Xinxin's internal chips will be given to TSMC. ”

What Liu Deyin said is true, but part of the information is hidden, that is, the orders handed over by Xinxin to TSMC are getting fewer and fewer, and with the growth of Xinxin's production capacity, they will sooner or later go to grab TSMC's orders.

In addition, the priority partners of Xinxin are Huahong and SMIC, and then TSMC.

The host suddenly realized: "It turns out that there is still a cooperative relationship between Xinxin and TSMC, which means that the better the development of Xinxin, TSMC can also benefit from it." ”

Liu Deyin wanted to refute in his heart, but on the surface, he still had to pretend to agree: "Yes."

In models like Xinxin and TSMC, they are equivalent to a single company with fewer restrictions on data sharing, so Intel can optimize each other's manufacturing and design more closely than AMD.

Their final chip pricing can be lower than AMD's because there is no need to pay additional foundry fees. ”

Most of AMD's foundry is handed over to TSMC.

"In the same way, Xinxin is also such a company, they can greatly use the advantages of data sharing to optimize the design scheme and manufacturing process.

It is precisely because Xinxin and Intel are the same type of enterprises, so in the field of mobile chips, Xinxin makes Intel very uncomfortable, and the leading edge of Intel and AMD has disappeared in the face of Xinxin. "Liu Deyin wants to pull Intel into the water.

His words will be disseminated to Silicon Valley by the media, and TSMC is much more connected to Silicon Valley than to Zhangjiang.

Intel has to wait until the 14nm process to start lagging behind, originally scheduled to break through the 10nm process in 2016 for the transition, the result is a complete collapse, TSMC in the 16nm, 10nm and 7nm process one after another, directly ahead of Intel for three years.

After Intel lost its leading position, the problem of inefficiency was exposed, and the yield rate of their manufactured wafers was significantly lower than that of TSMC, requiring more fabs to achieve the same output.

From cost to performance to yield, it is lagging behind in almost all aspects, and no one can even say why Intel is lagging behind.

So much so that when Intel itself carried out reforms, it adopted an internal foundry model, and the internal design department needed to pay to lock in orders.

Use a large number of in-house foundry models to save costs, for example, different chip design teams, how much was the sales of chips designed by your team last year, and then Intel allocates the money you can use according to your team's sales, and you use this money to lock in orders.

Instead of the previous kind of where all the teams lined up according to their importance, Team A occupied the production of the advanced process, and as a result, the things created relied on the defense and could not be sold at all.

And because Zhou Xin knows the disadvantages of the IDM model, Xinxin has adopted the internal foundry model from the beginning of its establishment.

Even because of the popularity of Yanque and Honghu, Xinxin has chip designers who have set up a separate team to design chips related to smartphones.

"So who do you think will have the advantage between Intel and Xinxin?" The host is also not too big to watch the excitement.

Liu Deyin said: "Intel has mastered the present, and Xinxin looks to have an advantage in the future.

We all know that personal PC is the mainstream electronic product in the past few decades, and Intel firmly occupies the monopoly position of personal PC chips, but Xinxin's leading position in smartphone chips is also solid, and smartphones are the future. ”

The host asked: "Mr. Liu, when you were interviewed about ten years ago, you said that the Fabless model is the future, and IDM is the backward model, and now with the emergence of Xinxin Technology, the IDM model seems to be revitalized.

As you find that other companies besides Intel can also do a good job in the IDM model, do you want to overturn your own view from ten years ago or continue to insist that Fabless is better than IDM? ”

Liu Deyin said: "Xinxin seems to be an exception, its strength is based on his strong position in smartphone chips, other companies can not be like Intel and Xinxin, occupy the absolute leading edge of a certain type of chip, Fabless is better than IDM." ”

The host laughed, "So you still insist on Fabless's better view, just patching that view." ”

Liu Deyin nodded: "Yes." ”

In the future, Intel will completely lag behind TSMC after 14nm, and they can't resist it after ten years of hard resistance, and split chip manufacturing and chip design.

Intel brand foundries can receive orders for Apple's A-series chips and M-series chips, and orders from Intel's design department can also be directly handed over to TSMC, instead of making various excuses to cover them up.

When Intel made the decision to split the split, it estimated that it would save $3 billion in costs and contribute 6% of profits in the first year after the split.

By 2023, the foundry's revenue is expected to exceed $20 billion, surpassing Samsung to become the world's second-largest foundry. With these cost reductions and efficiency gains, Intel aims to catch up with TSMC by 2026 and potentially win the business of big companies like Apple and Nvidia.

The result is that this is just a beautiful fantasy, the actual situation is far from their own expectations, Intel technology lags behind and bloated organizational relationships, and the organization loses vitality, not necessarily the IDM model is not good.

"What do you think about Xinxin's acquisition of ASPLA?" The host asked, "This is also a topic of great concern to the island recently, in such an environment, Samsung is expanding production, Xinxin is merging and acquisitions, is TSMC also going to take advantage of this opportunity to expand against the trend?" ”

"To be honest, although I don't want to admit it, Xinxin's acquisition of ASPLA is not good news for TSMC." Liu Deyin smiled bitterly: "Because this means that the process of Xinxin can be improved again, the production capacity has been increased, and there are fewer orders that can be separated to TSMC."

Samsung's expansion of production and the expansion of new chips both indicate one thing, that is, they have enough confidence in their own enterprises that they can survive the financial crisis and live until the day when the situation reverses and the cycle goes up.

TSMC also has such confidence, but compared with these two companies, TSMC's financial strength is indeed not so strong. ”

(End of chapter)