Menu
China's chip investments potentially more good than bad for TSMC

China's chip investments potentially more good than bad for TSMC

TSMC is hoping it has more to gain than lose from China's investments into its local semiconductor industry

Taiwan Semiconductor Manufacturing Co. is putting a positive spin on China's investments aimed at making its chip industry a competitive, global powerhouse.

"We think our business opportunity in China will grow, will be bigger, with this development," said Mark Liu, co-CEO of TSMC during a conference call to discuss earnings.

This week, China announced it had set up a fund to develop the country's semiconductor industry, with local media reporting that the initial investments could amount to 120 billion yuan (US$19.5 billion). The announcement came after the Chinese government in June unveiled a plan to turn the country into a leading semiconductor maker.

The government investment comes at a time when China has become a major market for electronics, but still imports vast amounts of chips made from foreign companies including Intel, Samsung and contract-chip manufacturer TSMC. China wants to change that, by increasing local chip production and pushing domestic manufacturers to develop new semiconductor technology.

The government subsidies could force some of TSMC's Chinese clients to use local chip foundries to build their processors, Liu said on Thursday. But on the plus side, many of China's chip designers have historically chosen TSMC foundries that have cutting-edge manufacturing technologies.

"We will be ready to capture the business," Liu said. He added that the government subsidies could help Chinese chip designers expand their business, and even lead to mergers. Companies such as Allwinner, Rockchip, Spreadtrum are among the emerging Chinese chip designers that are developing processors for smartphones and tablets.

A report from consulting firm McKinsey and Co. estimated that over the next five to 10 years, China could end up providing up to 1 trillion yuan in financial support to prop up China's semiconductor industry.

TSMC's existing business, however, remains strong, and has shown consistent growth on booming demand for smartphones. On Thursday, the company reported record net profit of NT$76.3 billion (US$2.5 billion) in the third quarter, up 47 percent year-over-year. For this year, TSMC estimates it will make a little over 50 percent of its revenue from producing smartphone chips.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags governmentregulationprocessorsComponentsTaiwan Semiconductor Manufacturing Co.

Featured

Slideshows

The making of an MSSP: a blueprint for growth in NZ

The making of an MSSP: a blueprint for growth in NZ

Partners are actively building out security practices and services to match, yet remain challenged by a lack of guidance in the market. This exclusive Reseller News Roundtable - in association with Sophos - assessed the making of an MSSP, outlining the blueprint for growth and how partners can differentiate in New Zealand.

The making of an MSSP: a blueprint for growth in NZ
Reseller News Platinum Club celebrates leading partners in 2018

Reseller News Platinum Club celebrates leading partners in 2018

The leading players of the New Zealand channel came together to celebrate a year of achievement at the inaugural Reseller News Platinum Club lunch in Auckland. Following the Reseller News Innovation Awards, Platinum Club provides a platform to showcase the top performing partners and start-ups of the past 12 months, with more than ​​50 organisations in the spotlight.​​​

Reseller News Platinum Club celebrates leading partners in 2018
Meet the top performing HP partners in NZ

Meet the top performing HP partners in NZ

HP has honoured its leading partners in New Zealand during 2018, following 12 months of growth through the local channel. Unveiled during the fourth running of the ceremony in Auckland, the awards recognise and celebrate excellence, growth, consistency and engagement of standout Kiwi partners.

Meet the top performing HP partners in NZ
Show Comments