Revenues at Taiwan-based chip foundry TSMC are expected to overtake those of semiconductor giant Intel in the second quarter, according to Yahoo Finance estimates. Such a development would make TSMC the second-largest firm in the semiconductor industry, just behind Samsung.
Why it matters: TSMC’s rise in some ways indicates the rise of the foundry business model compared to Intel’s integrated device manufacturer (IDM) model. IDMs design and fabricate chips, whereas foundries focus only on fabrication and leave design work to other companies.
- The firm’s growth has also precipitated Intel accelerating its moves away from less advanced processes toward adopting more advanced techniques to stay competitive.
Details: Since 2021, TSMC has quickly closed the revenue gap with Intel.
- TSMC has enjoyed an average 8% quarterly growth since the first quarter of 2021. The firm’s quarterly revenue is projected to grow 43% in the second quarter this year, compared to the same period in 2021, according to Yahoo Finance’s data.
- Intel largely plateaued in 2021 and saw revenue drastically decline by 11% quarter-over-quarter in the fourth quarter of 2021. Yahoo Finance projected a 2% quarterly decline for the second quarter of 2022 for the firm.
- Taiwan media outlet UDN cited sources from the semiconductor industry, saying that TSMC’s overtaking of Intel was due to structural changes in the sector. Nowadays, more chip firms prefer to design chips and hand them to foundries like TSMC and Samsung to produce.
Context: As one of the world’s top foundries, TSMC plays an essential part in this industry. The firm’s production capacity broadly affects its upstream chip designers like Qualcomm and downstream device makers such as Apple and Xiaomi.
- Since 2020, TSMC has been planning the construction of 18 factories around the world. The firm plans to build five new factories this year, including three in Taiwan, one in Nanjing, and another in Japan, UDN reported on Monday.
Ward Zhou is a tech reporter based in Shanghai. He covers stories about industry of digital content, hardware, and anything geek. Reach him at ward.zhou[a]technode.com.
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