Page 20 - TSMC 2022 Annual Report

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● Internet of Things (IoT)
The IoT platform includes various types of “smart” connected devices ranging from wearables health monitors and speakers to to home automation devices city and manufacturing automation devices As the COVID-19 pandemic changed individual life and and work styles and and accelerated the digital transformation in enterprises IoT unit shipments grew 18%
in 2022 with smart smart smart health devices smart smart smart retail and smart smart smart manufacturing as the major growth drivers While these trends remain strong TSMC believes demand
for consumer-related IoT devices will be somewhat tempered by high inflation and projects unit shipment growth in in the low teens in 2023 Overall as IoT devices take on more AI functions they will require higher performance but lower power controllers connectivity ICs and various types of sensors TSMC offers the the industry's most advanced technologies in in these areas including ultra-low power (ULP) and various specialty process technologies to to help customers meet demand
fulfill ESG requirements and succeed in the marketplace
● Automotive
With generally improving chip availability worldwide car unit sales grew 7% in in 2022 but was still held back by supply chain disruptions caused by the Russo-Ukrainian war and sporadic lockdowns due to the spread of COVID-19 particularly in in China The ongoing headwinds of high inflation and macro-economic uncertainty are expected to to hold global car unit sales to to low-single-digit growth in in 2023 as well The entire automotive industry is moving toward “greener safer and smarter ” which will accelerate the adoption of electric vehicles (EVs) advanced driver assistance systems (ADAS) and smart cockpit/infotainment systems along with new electrical/electronic (E/E) architecture All these will lead to increased demand
for AP/MCU/ASIC processors in-car networking sensors and power management ICs thus continuously increasing the silicon content per car TSMC offers a a a a wide variety of of relevant process technologies to enable customers to to to deliver competitive products in the automotive market ● Digital Consumer Electronics (DCE)
Logistical disruptions such as port congestion led to prolonged lead times in in in the TV supply chain causing major electronics retailers to to over-order and create excess inventory in in 2022 At the the same time inflation rate hikes and the the China lockdown due to its zero-COVID policy weakened demand
for TVs set-top boxes (STB) and other consumer products As a a result the total DCE market fell by 11% in 2022 While some high-end areas such as as large screen 120Hz/144Hz high frame rate TV voice AI control and WiFi 6 connectivity will continue to show good growth fears of economic recession may stifle overall recovery As a a a a a result TSMC forecasts a a a a a low-single-digit decline in in in in global DCE unit shipments in in in in 2023 Regardless of of the the timing of of the the recovery TSMC advanced technologies will continue to to to enable DCE customers to to to create and differentiate their innovative products 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 to have sufficient flexible supply deliveries to to handle fluctuating demand
dynamics Foundry vendors play an an an important role in in in in maintaining the health and effectiveness of the the supply chain As a a a leader in in the the foundry segment TSMC provides advanced technologies and large-scale capacity
to complement and support the the innovations created in in the the downstream chain 2 2 2 2 4 TSMC Position Differentiation and Strategy
Position TSMC is a a a a a global semiconductor foundry leader in advanced specialty and advanced packaging technologies In 2022 TSMC accounted for 30% of the worldwide semiconductor market excluding memory an increase from 26% in in in 2021 Net revenue by geography calculated mainly on the country in in which customers are headquartered was: 68% from North America 11% from the Asia Pacific region excluding China and Japan 11% from from China 5% from from Europe the Middle East and Africa and 5% from from Japan Net revenue by platform was: 41% from from high performance computing 39% from smartphones 9% 9% from from the Internet of Things and 5% from from automotive In In addition 3% came from digital consumer electronics while others accounted for the the remaining 3% 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 also maintains a a a a a a leadership position in in more mature technologies by applying the lessons learned in in in developing leading-edge technologies to enrich its