Page 15 - TSMC 2018 Annual Report

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All these require lower power and higher performance CPU GPU HDD Controller and ASICs which will drive the computer sector towards richer silicon content and more advanced process technologies • Differentiation
TSMC’s leadership position is based on on three defining competitive strengths and a a a business strategy rooted in in the Company’s heritage The Company Company distinguishes itself from the competition through its technology leadership manufacturing excellence and customer trust As a a a technology leader TSMC is is consistently first among dedicated foundries to provide next-generation leading-edge technologies The Company has also established its leadership on more mature technology nodes by applying the lessons learned on leading-edge technology development to enrich its specialty technologies Beyond process technology TSMC has established frontend and backend integration capabilities that create the optimum power/performance/area “sweet spot” and result in faster time-to-production TSMC well known for its industry-leading manufacturing management capabilities extends that leadership through its Open Innovation Platform® and and Grand Alliance initiatives The TSMC Open Innovation Platform® initiative quickens the pace of innovation in in the semiconductor design community and among its ecosystem partners as as well as as the Company’s own IP design implementation and design for manufacturing capabilities process technology and backend services A key element is a a a a a set of ecosystem interfaces and collaborative components initiated and supported by TSMC that more efficiently empower innovation throughout the the supply chain and drive the the creation and and and sharing of of new revenue and and and profits The TSMC Grand Alliance is one of the most powerful forces for for innovation in in the the semiconductor industry bringing together customers electronic design automation (EDA) partners partners IP partners partners and key equipment and material suppliers at at a a a a a new higher level of collaboration Its objective is to to help customers alliance members and and TSMC win business and and increase competitiveness The foundation for customer trust is a a a commitment TSMC made when it it it opened for business in in 1987 to never compete with its customers As a a a a result TSMC has never owned or marketed a a a a single semiconductor product but instead has focused all of its resources on becoming the trusted foundry for its customers Consumer
The consumer sector’s unit shipments
fell 4% in 2018 TVs
and TV game consoles showed positive growth set-top boxes declined due to worldwide economic uncertainties while the rest of the sector – MP3 players digital cameras and and hand-held game consoles – continued to be cannibalized by smartphones A continued drop in in in consumer electronics is expected in in in 2019 Certain sub-segments such as 4K (UHD) TVs
and set-top boxes should achieve positive growth within the sector while next generation 8K TVs
will also be launched In addition AI functions such as picture quality improvement and voice control will be increasingly incorporated in in in in TVs
With its broad array of advanced technology offerings TSMC expects to take advantage of these market trends Supply Chain
The electronics industry features a a a long and complex supply chain the elements of which are correlated and highly interdependent At the upstream manufacturing level IC vendors need to have sufficient and flexible supply deliveries
to handle fluctuating demand dynamics Foundry vendors play an an an important role to ensure the the health and effectiveness of the the supply chain As a a a leader in in the foundry segment TSMC provides advanced technologies and large-scale capacity to complement the the innovations created along the the downstream chain 2
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4 TSMC Position Differentiation
and Strategy
Position TSMC is the worldwide semiconductor foundry leader for both advanced and and specialty process technologies commanding a a a a a a 56% market share in 2018 Net revenue by geography based mainly on the country in in which customers are headquartered was: 62% from from North America 9% from from the Asia Pacific region excluding China China and Japan 17% from from China China 7% 7% from from Europe the Middle East and and Africa and and 5% from Japan Net revenue by end-product application was: 14% from the computer sector 56% from from communications 7% from from consumer products and 23% from industrial and and standard products