Chips for cars still represent only 4 percent of TSMC’s turnover despite growth
TSMC’s quarterly sales grew 20 percent from April to June, primarily as sales of high-performance computing chips and the automotive sector grew. Despite this, the automotive turnover for TSMC remains limited.
TSMC’s quarterly sales increased 19.8 percent versus the same quarter last year and 2.7 percent versus the first quarter of 2021. The Taiwanese chip giant benefited from high demand for chips. Car manufacturers, among others, are having great difficulty in getting enough chips delivered.
TSMC’s automotive sales increased 12 percent. Despite this, the automotive sector still accounts for only 4 percent of the company’s turnover, just like last quarter and a year ago. According to TSMC, car chip shortages will decrease this quarter, although production capacity will remain under pressure until possibly next year. TSMC does have high expectations of the automotive market, which increasingly requires complex and therefore expensive chips. For example, when the company announced its quarterly figures, the Dutch chip company NXP is having two automotive processors with FinFET transistors made at TSMC.
Chips for cars are currently mainly based on less complex and therefore cheaper nodes. TSMC made to explain the quarterly figures according to Reuters announced that it plans to expand its 28nm factories in China Nanjing. The company is also considering building new chip factories in the US and Japan.
| TSMC’s revenue share by platform | Q2 2021 | Q1 2021 | Q2 2020 |
| Smartphone | 42% | 45% | 47% |
| High Performance Computing | 39% | 35% | 33% |
| internet of things | 8% | 9% | 8% |
| Automotive | 4% | 4% | 4% |
| Consumer electronics | 4% | 4% | 5% |
| Other | 3% | 3% | 3% |
Revenue from high performance computing chips such as Nvidia’s A100 accelerator also increased 12 percent from the previous quarter. This is currently a much more important growth market for TSMC, which now accounts for 39 percent of sales, almost as much as smartphone chips. Last quarter revenue from smartphone chips decreased slightly from the previous quarter, by 3 percent, probably due to seasonal influences.
TSMC’s 5nm process now accounts for 18 percent of wafer sales, compared to 31 percent for the 7nm node. Test production of 3nm will start this year. It should go into mass production next year and then offer performance improvements of 10 to 15 percent at the same consumption or achieve a reduction in consumption of 25 to 30 percent at the same performance.