Semiconductor Manufacturing: Integrated Circuit Process

Recently, Intel announced that it will suspend the upgrade of a fab in Israel – a 10nm and 7nm process plant which planned to cost 11 billion USD in the pre-construction. This reason might be the presence of 10nm and 7nm processes, or the priority of investing in the 14nm process plant in Ireland, thus directly addressing the 14nm capacity shortage.

14nm or 10nm is the distance inside the integrated circuit. The length of the distance reflects the fineness, and this fineness depends on the process technology. The higher the density, the smaller the power consumption, the more complex the function, and the higher the price, and the higher density is the current trend.

More advanced process and smaller transistor— higher price

Unlike concepts, industries that are limited to machines and people have limits. Before reaching the expected limit of 5nm, the development of the process technology has slowed down and Moore's Law has gradually failed. At the same time, various enterprises are facing the development problems of process technology and product commercialization, and the whole industry has entered the post-Moore era.

TSMC and Intel is leading the process advancement

Because leading the development of the process needs to bear high R&D expenses, the leading companies have retreated before reaching the theoretical limit of the process. Global Foundries official announced the suspension of the 7nm FinFET project, and shifted its focus to 14/12nm FinFET derivatives and other differentiated products. UMC announced that it would abandon the research and development of technology process below 12nm. As for Intel, after delaying the production of 10nm chips several times, it changed its strategy to "manufacturing-architecture-optimization".

Overspending of leading the advancement is increasing

At the beginning of 2017, TSMC successfully manufactured 256Mbit SRAM chips with its first-generation 7nm process, and the pass rate was as high as 76%. However, while occupying a dominant position on the 7nm process node, TSMC's research and development costs continue to grow, reaching several times that of other enterprises’ research and development costs.

The high amount of R&D investment is also an important factor that distinguishes first-class companies from the chasers. TSMC currently holds an absolute leading position in the IC manufacturing industry, and its revenue is rising year by year.

TSMC is absolutely leading the industry

TSMC’s market share is staggering

As Moore's Law becomes ineffective, the research and development investment required to pursue a more sophisticated IC is growing. In order to gain more profits, while working on more advanced process technology, first-class enterprises are seizing the market share in the old node market relying on their own brand advantages. TSMC even extends the business to the end step of the industry – packaging and testing market.

To maintain sustainable development, first-class companies should use the advanced level of process technology to develop nodes that have reached commercial levels and yet not been overcome by second-rate companies.

28nm costs least

28nm is the node with the lowest cost per unit logic gate, and the long-cycle process property is obvious. It is expected that most products will gradually migrate to more advanced processes, and stay long after reaching the node of 28nm due to its higher value of cost and wide application fields.

After the second-tier manufacturers conquered 28nm node, it is enough to meet the process requirements of most semiconductor products. Therefore, they should grasp the existing process market while launching special process platforms to enhance competitiveness.