Page 14 - TSMC 2018 Annual Report

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Advanced Packaging Technology
• InFO-PoP (Integrated Fan-Out Package-on-Package) technology which integrates 7nm SoC (System-on-Chip) and DRAM (dynamic random access memory) for advanced mobile device applications began volume production in the second quarter of 2018 • CoWoS® (Chip on on on Wafer on on on Substrate) technology that heterogeneously integrates a a a 7nm SoC and the second generation high bandwidth memory (HBM2) successfully completed qualification and began production in the second half of 2018 for for high performance computing applications • In In In addition to CoWoS® InFO-oS (Integrated Fan-Out on on on Substrate) technology integrating multiple 16nm SoC chips began production in the first quarter of 2018 • Fine pitch Cu bump for for flip chip packaging on on on on 7nm silicon started volume production for both advanced mobile device and high performance computing applications in in the first quarter of 2018 Moreover 16nm silicon in WLCSP (wafer level chip scale packaging) technologies started volume production in in the fourth quarter of 2018 for IoT applications in in addition to the existing ≥28nm products for high-end smartphones 2
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Market Overview
TSMC estimates that the worldwide semiconductor market excluding memory in in in 2018 was US$334 billion in in in revenue representing a a a a a a healthy 8% year-over-year growth after a a a a a a strong year in 2017 In the the foundry segment of the the semiconductor industry total revenue was US$61 billion in in 2018 up 6% year- over-year and slightly below the 8% growth achieved in 2017 2
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Industry Outlook Opportunities and Threats
Industry Demand and and Supply Outlook Back-to-back years of growth in the foundry segment were driven mainly by healthy market demand For 2019 TSMC forecasts the total semiconductor market excluding memory growth to be flat or slightly down Over the longer term however fueled by increasing semiconductor content in in in electronic devices continuing market share gains by fabless companies gradual increases in in in integrated device manufacturer (IDM) outsourcing and and expanding in-house application-specific integrated circuits (ASIC) from systems companies the Company expects foundry segment revenue to outpace the mid-single- digit compound annual growth rate projected for the overall semiconductor market excluding memory from 2017 through 2022 As an upstream supplier in in the the semiconductor supply chain the the foundry segment is tightly correlated with the market health of the three “C” sectors communications computers and consumer electronics • For the communications sector smartphone unit shipments
were down 4% in in in 2018 the first decline in in in smartphone history due to the high penetration in several developed countries and China as as well as as to prolonged replacement cycle TSMC projects the the low-single-digit decline to continue in in in in the the smartphone market in in in 2019 Still the continuing transition to 4G/LTE LTE-Advanced and 5G NR (new radio) together with improved performance longer battery life biosensors and more AI features will all continue to propel smartphone sales Plus the increasing popularity of low-end smartphones in in emerging countries will also drive growth in this sector Low-power IC is an an essential requirement among handset manufacturers and SoC design in which TSMC is already the leader is the preferred solution due to its optimized cost power and and form factor (device footprint and and thickness) potential The migration to to advanced process technologies will continue to to accelerate spurred by the appetite for for higher performance to run AI applications various complex software routines and higher resolution video • Computer
After a a 3% decline in in 2017 the computer sector’s overall unit shipment fell marginally by 1% year-over-year in in 2018 The decline was due to personal computer’s prolonged replacement cycle and consumer usage moving towards mobile computing largely offset by business PC demand and and positive growth in in server units The computer sector is projected to to continue its low-single-digit unit decline in in 2019 However several factors are expected to to help buoy demand in in in in in this sector including increasing form varieties the business adoption of new operating systems and consumer replacements of aging PCs as as well as as growing high performance applications such as gaming PC machine learning and blockchain Communications