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TSMC’s Earnings-per-Wafer and Market Share increased significantly in 2020: Reports

In the wake of pandemic-induced remote working and entertainment shifts, consumer electronics have seen a global demand surge. The Taiwan Semiconductor Manufacturing Company (TSMC)’s revenue earned in 2020 is $1,634 per wafer, a six-year record high for the company, which had earned $1,530 per wafer in the year before, according to data compiled by IC Insights. Its overall market share in 2020 also grew significantly. 

TSMC Earned 2x/Wafer More Than SMIC and 66% More Than Global Foundries Shows Data

While TSMC’s revenue-per-wafer grew by $104 in 2020, Global Foundries’ revenue dipped slightly $7. The Santa Clara-based foundry earned $984/wafer in the year down from $991 in the previous year.

According to a report by WCCFTECH, “in the chip fabrication process, integrated circuits are first ‘printed’ into wafers of different sizes that are then cut into individual processors for post-processing such as packaging and integration. Revenue per wafer represents the amount that a foundry earns from a single wafer and after reflecting the costs that the company undertakes to prepare the product.” 

IBS Research firm in 2019 calculated the price of a 5nm chip wafer at $12,500 and the price of a 7nm chip wafer at $9,965. If the chip fabrication process is more advanced, the more processors can be extracted from a wafer by the fab- a fact that increases earnings from a single wafer.

Following Global Foundries is the Chinese chipmaker SMIC and Taiwanese chipmaker UMC respectively, with both fabs currently offering 14nm products and earning roughly the same in 2020. However, UMC made a sharp recovery from its revenue drop in the year before. 

IC INSIGHTS CHIP FABRICATION TSMC's Earnings-per-Wafer and Market Share increased significantly in 2020: Reports
IC Insight’s process node roadmap. A caveat: As IC notes, similarly named nodes do not necessarily represent similar underlying technologies, which might have different dimensions for a transistor. Image: IC Insights

In addition to a significant increase in its revenue-per-wafer, TSMC also commanded a huge share of the chip market last year. TrendForce, a market research firm revealed that the foundry was responsible for 54% of the total global foundry revenue in 2020 and that it is expected to increase to 55% this year.

With TSMC’s share increasing, Taiwan is also gaining market share from other foundries including China. TrendForce believes that at the end of this year, from 2020’s 5%, SMIC will have decreased its chip market share to 4%. Other fabs which include GlobalFoundries and, an Israeli chipmaker, TowerJazz, will have further lost another one percent to Taiwan.

Importantly, TrendForce confirms that U.S. sanctions against China see SMIC having to reallocate its capital expenditures to mature nodes such as 14nm. The research firm believes that SMIC will see a drop of 25% in capital expenditure this year due to the sanctions and that the Chinese fab is refocusing its efforts towards the 20nm/40nm and 0.18μm nodes.

As for TSMC, as it faces a water shortage in Taiwan, the fab is expected to enter risk production of 3nm chips later this year. TSMC is responsible for supplying products to American tech giant Apple Inc and chip designer AMD Inc. amongst a number of other companies that have placed it at the forefront of the global contract chip manufacturing industry.

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