Monday, March 14th 2022
TSMC's Largest Customer Accounts for 26 Percent of Revenues
You're not going to get an award for guessing who TSMC's biggest customer is, but based on details in TSMC's latest earnings report, its biggest customer stands for no less than 26 percent of TSMC's total revenue. That's up a whole percentage in 2021 over 2020 and as you most likely have already guessed, that company should be Apple. TSMC doesn't, for obvious reasons, reveal who their customers are, but it's no secret that Apple is spending a lot of money with the company. TSMC had a consolidated revenue of NT$1.587 trillion (US$55.73 billion) in 2021, or up 18.53 percent from 2020. The second largest source of revenue for TSMC might surprise some, at least based on the kind of information that the usual analysts tend to claim in their reports.
Although second place in terms of revenue only accounts for another 10 percent of TSMC's total revenue, we're still looking at some serious money here. However, as both Qualcomm and NVIDIA departed for Samsung in 2021, second place is said to be taken by AMD, which might not have been everyone's first guess. Unsurprisingly, 64 percent of TSMC's revenue is coming from companies in the USA, with Taiwan being the second largest source of revenue at 12.8 percent. As far as the PRC is concerned, revenue is said to be down by 29.6 percent and only makes up 10.3 percent of TSMC's revenues for 2021. This is largely due to the US sanctions against Huawei, according to the Taipei Times. The 7 nm node is still the big money maker for TSMC, which pulled in over NT$440 billion, followed by the 5 nm node at over NT$262 billion. However, the 5 nm node revenue grew by 188 percent in 2021, while the 7 nm node only had a revenue growth of 11.5 percent.
Source:
Taipei Times
Although second place in terms of revenue only accounts for another 10 percent of TSMC's total revenue, we're still looking at some serious money here. However, as both Qualcomm and NVIDIA departed for Samsung in 2021, second place is said to be taken by AMD, which might not have been everyone's first guess. Unsurprisingly, 64 percent of TSMC's revenue is coming from companies in the USA, with Taiwan being the second largest source of revenue at 12.8 percent. As far as the PRC is concerned, revenue is said to be down by 29.6 percent and only makes up 10.3 percent of TSMC's revenues for 2021. This is largely due to the US sanctions against Huawei, according to the Taipei Times. The 7 nm node is still the big money maker for TSMC, which pulled in over NT$440 billion, followed by the 5 nm node at over NT$262 billion. However, the 5 nm node revenue grew by 188 percent in 2021, while the 7 nm node only had a revenue growth of 11.5 percent.
16 Comments on TSMC's Largest Customer Accounts for 26 Percent of Revenues
Couldn't locate the full year report on TSMCs website.
Also its quite interesting that 7 nm and lower nodes only make up 50% of TSMC revenue. Less dense nodes are still important.
looks more profitable now just to etch silicon then be an actual cpu company.
(yes over exaggerating but still)
I wonder what revenue was from all foundries combined??
www.techpowerup.com/292931/top-10-foundries-post-record-4q21-performance-for-10th-consecutive-quarter-at-ususd-29-55b-says-trendforce
Consoles are a lower margin product and represents a huge portion of AMD's spending. For example if 2.5 to 3 billion is spent annually to pay for console chips which is not a stretch considering consoles take up 25 millions chips in a year( assuming a $120 cost to make), it would mean AMD has 4 to 5 billion tops to spend on 5nm. AMD is not in a position yet where it can double it's TSMC spending to keep up its current position. Intel and Nvidia are better equipped because of their margins, cashflow and revenue(less so for Nvidia).
Consoles were nice for AMD to have when they were broke, but when AMD had competitive or superior products, they have become an anchor for revenue or growth. If were not in the console business or just servicing one of the console makers, imagine how many more ryzen 3 or RDNA 2 chips they could have sold at higher margins.
And although I am not sure, it is possible that MS and Sony are TSMC customers for console chips since technically the silicon belongs to them. At the very least, AMD probably charged an upfront NRE in addition to fee per chip.
*Now that we are in the 20s, hopefully it’s safe to use that word on the internet.
The 28 nm node is said to be the last one that's cheap (oh well) to design for - that has someting to do with the switch from planar FETs to FinFETs. An interesting analysis was published two years ago, I can't seem to find anything more recent, but it clearly shows that the costs of developing a chip are rising sharply with each new node:
www.researchgate.net/figure/Chip-Design-and-Manufacturing-Cost-under-Different-Process-Nodes-Data-Source-from-IBS_fig1_340843129
It's still best and safest to choose 28 nm or even some larger node if you're not designing a chip that will sell in tens of millions.Maybe. But they haven't stopped investing, and the path they have chosen can still be very profitable for several years to come - RF, analog, power, automotive, gallium nitride, government contracts. After that, they can buy used 7 nm equipment from Samsung. TPU alone reported many times what GF is up to:
www.techpowerup.com/news-tags/GLOBALFOUNDRIES
If AMD making a set amount per chip while SONY AND MS made the chips, that would be a licensing deal and AMD would not nearly have as much of an advantage in obtaining the console chip contract. That is Nvidia would be happy to give the console maker a contract since it would not eat into their wafer supply and it would help them dominate the market further. The reason Nvidia did not pursue it because it is a low margin revenue stream. Licensing technology is a not a low margin revenue stream. It's pure profit.
If Epyc and Instinct were actually taking the lionshare of Fab capacity, their margins would be much much higher. Have you looked at the price of EPYC and Instinct lines? How big are the chips for EPIC and Instinct for their price? AMD's margins are the lowest of the three and this would not be the case if their professional lines were taking up most of their manufacturing ability.
AMD likely has to service those console contract or a penalty will happen. It's why in terms of output, console system have actually been selling at a higher rate than usual(compared to PS4 and xbox one) and supply is pretty healthy considering the shortage of chips. However Ryzen 3 and RDNA2(particularly this one), have been generally short on supply. Look at the size of a console chip and the shear volume of them being sold to console makers and it should be pretty clear AMD should be manufacturing more RDNA 3 and Ryzen 3 chips and manufacturing less console chips but they can't.
The stuff used in space is decades old.