With the fast development of automotive technology, the demand for advanced semiconductor chips has surged dramatically in recent years. From enhancing vehicle safety features to enabling autonomous driving capabilities, these chips have become the backbone of modern automobiles. Among the key players in this sector, Taiwan Semiconductor Manufacturing Company (TSMC) stands out as a dominant force, able to “reshape” the landscape of the automotive chip market.
TSMC’s Automotive Chip Market Share
In recent years, the automotive sector has experienced a shift toward electrification, connectivity, and autonomous driving vehicles, resulting in high demand for advanced semiconductor chips. Within this rapidly evolving landscape, Taiwan Semiconductor Manufacturing Company (TSMC) has emerged as a formidable force, steadily expanding its footprint in the automotive chip market.
Apart from TSMC’s main focus on consumer electronics and high-performance computing, its strategic pivot towards the automotive sector reflects the growing significance of semiconductor chips in modern vehicles. By leveraging its cutting-edge manufacturing capabilities and domain expertise, TSMC has swiftly gained traction in providing automotive-grade chips that meet the stringent requirements of safety, reliability, and performance.
Automotive chips are predicted to reach the highest CAGR in revenue in the 2022- 2027 period, among semiconductor application categories. In TSMC’s case, in the second quarter of 2023, TSMC witnessed a rise in revenue contribution in the automotive applications sector, climbing from 4% in 2021 and 5% in 2022 to 8%. Furthermore, the automotive chips sector met a 51% surge in year-on-year growth in 2021, and up to 74% growth in 2022.
Although experiencing rapid growth in the automotive chip sector, TSMC doesn’t have a market share due to its customers are other automotive and industrial chipmakers, such as NXP, STMicroelectronics (STM), Infineon, and Sony. In other words, TSMC’s automotive chips are resold by its customers to carmakers or tier 1 components suppliers, which leads to the company’s now owning a market share in the terminal automotive chip-end market. Yet, it doesn’t mean that TSMC’s role is less significant in the automotive sector.
TSMC’s Effort in Empowering the Revolutionizing Mobility
With a view to developing and expanding its influence in the automotive market, TSMC has made significant moves.
On August 8, 2023, TSMC stated that its board of directors had approved a maximum investment of US$3.8 billion to establish a joint venture, European Semiconductor Manufacturing Company (ESMC), in Germany. TSMC will own 70% of ESMC, with Infineon, NXP, and Bosch owning 10% equity, each. The 12-inch wafer fab is scheduled to begin production process by the end of 2027, employing 12/16nm FinFET and 22/28nm planar CMOS 12/16 FinFET process technology and focused on chips for automotive and industrial control applications.
On the other hand, TSMC also partnered up with its customer- Sony to develop a 12-inch wafer fab in Kumamoto, Japan. In terms of the foundry’s joint venture fab with NXP and Infineon, it would depend on the collaboration with TSMC’s key clients and automakers in Europe.
In conclusion, TSMC’s growing influence in the automotive chip market reflects its rising prominence as a leading provider of semiconductor solutions for the automotive industry. With its advanced manufacturing capabilities and commitment to innovation, TSMC is poised to remain at the forefront of driving automotive innovation and shaping the future of mobility for years to come.