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Only the logo is red, not the numbers:
lettering of the Taiwanese semiconductor contract manufacturer TSMC, which has made itself indispensable
Photo: ANN WANG / REUTERS
The fire in a factory of the Japanese chip manufacturer Renesas startles the automotive industry - and Japan's political leadership: The country's government is asking plant manufacturers in Japan and overseas to deliver parts to repair the damaged plant as soon as possible.
The chip crisis in the automotive industry is likely to get worse.
One company that only industry insiders have known so far will benefit significantly from this, at least in the medium term: the Taiwanese chip manufacturer TSMC, the world's largest contract manufacturer of semiconductors.
According to experts, many of the chips used in the automotive industry, so-called microcontrollers, are still manufactured in their own factories by specialized chip manufacturers.
The semiconductor manufacturer NXP was the market leader in this area with a 27.2 percent market share in 2019, followed by Japan's Renesas (27 percent market share in 2019) and the German manufacturer Infineon (16.8 percent).
With the latest generation of processors, however, the sizes of the transistors used on them continue to shrink - and these will soon also be used in vehicles.
For example, Apple relies on transistors with a size of 7 nanometers for its chips, but processors with a transistor size of 5 nanometers are already being produced - and it should go further down.
Enormous dominance in semiconductors with nano-transistors
The automotive chip specialists are not yet technically equipped for this and are therefore forced to outsource production to the Taiwanese technology leader TSMC.
This is also shown by a deal between NXP and TSMC to manufacture 5-nanometer processors from June 2020.
As a chip contract manufacturer, TSMC already has a market share of 56 percent, and in the contract manufacturing of chips with a size of 5 to 10 nanometers, the market share is well over 80 percent.
The largely unknown giant from Asia had presented excellent figures even in the Corona year: In 2020 as a whole, TSMC achieved sales of 45.5 billion dollars, an increase of around 25 percent compared to the previous year.
Profit in 2020 was $ 17.6 billion.
Taiwan's chip giant is currently investing in a new factory to build semiconductors with transistors as small as 3 nanometers.
That corresponds to one twenty thousandth of a human hair.
The advantage of such chips: They should be up to 70 percent faster and also significantly more energy efficient than the currently most advanced semiconductors.
According to a report by the Financial Times, the new plant for the world's most advanced processors will have an area of 160,000 square meters, the size of 22 soccer fields.
The importance of TSMC's role in contract manufacturing is already shown by a call for help from Federal Minister of Economics
Peter Altmaier
(62): In January, he asked the Taiwanese government by letter for help in solving the chip crisis in the auto industry.
The increasing dominance of TSMC is already calling the world powers China and the USA onto the scene: It was probably not entirely by chance that the US semiconductor giant Intel recently announced that it would invest 20 billion dollars in new plants and now also in the contract manufacturing of chips for third parties wanting to get in.
The American IT giant is also struggling with the latest technology: Even Intel has already placed orders for chip production with TSMC.
China's chip contract manufacturers, reports the FT, are technically still a long way from TNMC's manufacturing expertise.
And TSMC is determined to expand its lead: In January, the company announced that it would once again increase its investments significantly.
The company plans to invest between $ 25 billion and $ 28 billion this year.
According to information in local media, 80 percent of the sum will be used for the development of modern technologies such as 3-, 5- and 7-nanometer chips.
In 2019 it was $ 17.2 billion - and that was a new record for TSMC.
In terms of technology, only the Korean electronics company Samsung can keep up with the race for smaller transistor sizes, which also works as a chip contract manufacturer, albeit to a much smaller extent than TSMC.
In the past year, TSMC benefited greatly from the increasing global demand for laptops, smartphones and game consoles in the wake of the corona crisis.
Now TSMC is likely to rely even more on semiconductors for the automotive sector.
TSMC shouldn't worry too much about global competition.
According to experts, getting started with chip production and, above all, the production of such small transistors is very costly.
"The most innovative stuff is made on a campus in Taiwan"
TSMC has remained largely unknown until now.
The semiconductors that the company manufactures are developed by IT companies such as Apple, AMD or Qualcomm and sold under their names.
Over half of all chips produced by contract manufacturers worldwide now come from TSMC.
"The industry is" incredibly dependent on TSMC ", especially in the most technically advanced area, Bain consultant Peter Hanbury told the Financial Times.
Now the most innovative stuff is made on a single campus in Taiwan. "
This dependency is now causing irritation worldwide.
In the United States, politicians cite the lack of chips in the auto industry as an example of why the country should revive semiconductor manufacturing at home.
TSMC responded to pressure from then President Donald Trump - and promised to invest 12 billion dollars in building a plant in the USA.
Europe's chip manufacturers have to make an effort
Japan is also concerned about Taiwanese market power.
TSMC has therefore recently announced that it will set up a research and development department in Japan.
There are also efforts in the EU to break away from dependence on TSMC.
The EU countries have therefore started an initiative to invest in a chip factory for two-nanometer transistors, which would be the next technological step after TSMC's new plant.
The "FT" says that none of this really fits in with TSMC's previous business model.
According to analysts, the Taiwanese are so efficient and profitable because they concentrate a lot directly in the country.
TSMC would only have chosen the US site because the Americans had promised to offset the higher production costs in the country with subsidies.
TSMC does not want to risk a confrontation with Japan - probably also in view of the historically difficult relationship between Taiwan and the island nation.
In Europe, a TSMC spokesman indicated to the FT, the company sees little advantage in setting up its own plant.
Europe's chip giants NXP and Infineon will probably have to make an effort to catch up on the technology gap.
wed