TSMC's Chang Confident to Prevail Over Super IDMs

Taiwan Semiconductor Manufacturing Co. (TSMC) Chairman Morris Chang expressed confidence in his company, a major pure silicon foundry, and its strategic partners to prevail over mega integrated device manufacturers (IDMs) Intel Corp. and Samsung Electronics Co., Ltd. in global silicon foundry market.

Chang noted that TSMC gave birth to the silicon foundry sector, which is a “disruptive innovation” and has evolved into a new business model to integrate the foundry's resource with its strategic partners' R&D and innovations. The business model will allow his company and its partners to definitely outdo Intel and Samsung, suppliers of   production capacity for built-to-order manufacturing.

TSMC's resources include the Open Innovation Platform (OIP),  a set of ecosystem interfaces and collaborative elements for its partners developing innovative products, with its partners  composed of suppliers of key equipment and materials, customers, and silicon intellectual property suppliers.

Chang estimates fab-lite chipmakers, which are downsizing  in-house fabs to increase outsourced advanced foundry service, to generate revenue of around US$100 billion worldwide by the end of 2014. Intel and Samsung will be the only IDMs in chip-making to generate revenue of only US$80 billion in 2014. In the meantime, IC design houses will generate total revenue of approximately US$94 billion mostly thanks to contract manufacturing service from pure foundries.

He projects pure foundry sector to generate revenue of US$42 billion throughout 2014, with TSMC alone accounting for US$25 billion, that pure foundry suppliers and fabless houses to work together more closely in the years to come.

Commenting on China's development guideline for semiconductor industry, recently announced by the Ministry of Industry and Information Technology, Chang said TSMC will play a role in helping the development of China's  semiconductor industry, as well as the above at a conference attended by business executives from Taiwan and China, including Jack Ma, chairman of the Alibaba Group Holding Co., Ltd. (KL)