The 28nm process, a 10-year-old process, has once again been favored by global foundry giants, and TSMC, UMC, GF, SMIC, and Shanghai Huali have all strengthened their layout in 28nm.
28nm has been favored by foundry giants because of its innate advantage of attacking and retreating. The market driving force of 28nm mainly comes from the improvement of market demand for terminal products such as tablet PCs, wearable products, and smart home appliances.
However, the industry also has some concerns about whether there will be excess capacity in mature processes. JW insights believes that there will be no surplus in mature processes, on the one hand, because foundry companies have signed long-term cooperation with customers, which can reduce the risk of order fluctuations; on the other hand, China in the post-Moore era of strategic promotion path, is also constantly opening up a broader market space for the application of mature processes, the strong momentum of the Chinese market for foundry giants will naturally not be ignored.
Giants have laid out 28 nanometers because of their innate advantages
At present, the global wafer foundry giants have laid out 28 nanometers. Let's sort out the promotion of the former global foundry companies on 28 nanometers:
From the perspective of TSMC, in May this year, TSMC invested nearly $3 billion in the Nanjing plant to expand the mature process capacity of 28 nanometers. In November this year, TSMC announced that it will simultaneously launch the construction plan of the mature process of the Kaohsiung plant in Taiwan and the Japanese plant.
At the end of last year, UMC expanded the 28nm and 22nm production capacity of the 12-inch fab in Tainan. In the first half of 2021, the 28nm production capacity of the UMC Xiamen plant will be expanded. UMC has also partnered with IC design companies such as MediaTek, Lendlion, Realtek, and Samsung to further achieve the goal of expanding production capacity. In the near future, UMC will also expand its mature process production capacity in Singapore.
After exiting the high-end process competition, GF began to focus on mature process nodes such as 28nm. Globally, GF is investing more than $6 billion to increase production capacity, of which $4 billion is invested in expanding GF's plant in Singapore and $1 billion in expansion in the United States and Germany.
SMIC began mass production of the 28nm process in 2015 and announced the completion of the development of the 28nm HKMG in 2018. In mid-March, SMIC announced a $2.38 billion investment in a new 12-inch fab in Shenzhen to lock in on a full-fledged manufacturing contract. In September this year, SMIC and the Shanghai Lingang Management Committee established a joint venture to focus on providing foundry services for technology nodes of 28 nanometers and above.
The layout of the foundry giant 28-nanometer process stems from its inherent advantages, which are mainly manifested in two aspects:
First, the manufacturing process and production equipment used in the 28-nanometer process can be compatible with more mature processes such as 40nm and 60nm. In this way, even if companies expand the production line of the 28-nanometer process, when the demand for 28-nanometer capacity declines, they can also invest these devices in the production of more mature processes.
Second, the advantages are more prominent compared with 40 nanometers. In terms of performance, the 28nm gate density is higher and the speed of the transistor is increased by about 50%, which means that the energy consumption can be reduced by 50%. At present, the price difference between 28 nanometers and 40 nanometers is getting smaller and smaller, in the case of close cost, the use of 28 nanometers process can bring better performance advantages to products, IC design companies will naturally selectively choose 28nm with better prices.
Strong market demand opted for 28nm
At present, smart phone chips will reach 5 nanometers of advanced processes, computer CPUs will use 7 nanometers, in addition, many chips in daily life are still based on 28 nanometers and above mature processes.
In the face of the wave of core deficiency that is raging around the world, what is most lacking is not the chip of advanced process, but the chip of mature process, including 28 nanometers, 40 nanometers and other processes. Chip products involving mature processes mainly include MCUs, WiFi chips, power management chips, driver chips and so on. These demand sides mainly come from tablet computers, smart cars, smart home appliances, wearable products, etc.
From the tablet market data, according to the latest research report released by Strategy Analytics, global tablet shipments in 2020 were 188.3 million units, an increase of 18% year-on-year. According to IDC statistics, the global tablet market shipped 80.35 million units in the first half of 2021, an increase of 24.4% year-on-year.
From the perspective of smart home appliance market performance, according to the survey data released by market research agency Technavio, the global smart home appliance market is expected to grow by $31.66 billion in 2020-2024, decelerating at a compound annual growth rate of more than 16% during the forecast period. According to the latest report from Grand View Research, the global smart home appliance market size is expected to reach $92.72 billion by 2027, with a compound annual growth rate of 14.1% from 2020 to 2027.
From the perspective of the market performance of wearable products, with the in-depth application of the Internet of Things and the increasingly good user experience of consumers, the wearable products market has maintained a strong growth rate. IDC statistics show that wearable device shipments in 2020 were 444.7 million, up 28.4% from 2019. According to IDC data, a total of 104.6 million wearable devices were shipped in the first quarter of this year, an increase of 34.4% from 77.8 million units in the same period last year, which is also the first time that global wearable device shipments exceeded 100 million units in the first quarter. Global wearable device shipments in Q2 2021: 32.3% year-on-year to 114.2 million units; global wearable device shipments in Q3 2021 were 138.4 million units, an increase of 9.9% year-on-year. Global wearables shipments will reach 482 million units in 2023.
The intelligent car industry has just started, affected by the epidemic and lack of core, many automobile factories shut down, although the production capacity is limited, but the intelligent car is the next outlet after the mobile phone, the future of the automotive field on power management chips, display driver chips, automotive electronic chips Demand is still further improving.
Overcapacity at 28nm is less likely
For the industry's concern about whether the mature process is overcapacity, JW insights believes that at present, foundry companies have signed long-term contracts with customers, on the one hand, it can ensure that the demand of IC design enterprises can be sustained and there will be no interruption; on the other hand, it can effectively reduce the risk of chip foundry enterprises expanding production capacity.
Another factor that cannot be ignored is the development path of the post-Moore era advocated by China. In the promotion of advanced processes, due to the restrictions of the United States on advanced manufacturing key equipment such as EUV lithography machines, China cannot promote the landing of advanced processes, and the mature process itself has a huge market space. To this end, instead of following behind the United States and others, it is better to find another way to open up a semiconductor industry development path that suits the national conditions and development needs of the country.
The technical development route of Moore's Law is to continue Moore's Law and further develop more advanced processes, thereby reducing the size of digital integrated circuits. Beyond Moore's Law, it does not rely on the continuously micro-scaling process, but through advanced packaging technology, new materials and so on to improve the performance of integrated circuits.
To this end, the development path of the post-Moore era advocated by China provides a more open market space for mature process manufacturing.
As one of the largest markets in the global semiconductor industry, these giants naturally do not want to lose the huge cake corresponding to mature processes. (Proofreading/Sami)