TSMC’s premium over SMIC almost beats 2005 gap – 台北時報
The share price gap between Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and China’s biggest chipmaker is almost at its widest in nearly two decades, highlighting the difficulty Beijing faces in building up its domestic chip industry.
Bolstered partly by state-of-the-art chipmaking capabilities, TSMC has soared 48 percent this year in Taipei while Semiconductor Manufacturing International Corp (SMIC, 中芯國際) lost 7.5 percent, leaving the gap between the two stocks’ annual performance poised to be the biggest since 2005.
The chasm has occurred even as China’s largest semiconductor investment fund, known as Big Fund III, aims to develop the local sector amid US efforts to limit growth.
Photo: Ann Wang, Reuters
Boosting SMIC’s technology “is not something that can be achieved overnight, even with abundant funding,” said Shen Meng (沈萌), a director at Beijing-based investment bank Chanson & Co (香頌資本).
China is capable of making 7-nanometer chips, two generations behind the most sophisticated semiconductors in commercial production, but it is seeking to progress to 5-nanometer chips amid US curbs.
TSMC uses extreme ultraviolet (EUV) lithography equipment to produce more advanced 3-nanometer chips, but such tools cannot be sold to China due to export controls.
“Even if SMIC can produce chips using 5-nanometer technology, the cost would be at least 10 times higher than those produced at TSMC without EUV machines,” Bloomberg Intelligence analyst Charles Shum (沈明) said. “The technology gap isn’t just about reaching a certain level, it’s also about how effectively you can achieve it. ”
Although the Chinese government has unveiled few details on the third vehicle of the National Integrated Circuit Industry Investment Fund, Big Fund III’s formal name, investors are betting it would help solve some sector issues.
“The new fund is expected to focus on advanced technology, including wafer manufacturing, packaging, process control and equipment materials,” said Xiang Xiaotian, a director at Shanghai Chengzhou Investment Management Co (上海誠洲投資管理).
The fund might also target investments in AI chips, said Li Xun (李尋), an investment adviser at Guotai Junan Securities Co (國泰君安證券).
ASML Holding NV will ship its latest chipmaking machine to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) this year. Two of ASML’s biggest customers, TSMC and Intel Corp, will get the so-called high-NA extreme ultraviolet (EUV) machine by the end of this year, ASML chief financial officer Roger Dassen told analysts in a recent call, according to the company spokesperson. Intel has already placed orders for the latest high-NA EUV machine and got the first one shipped to a factory in Oregon in December last year. It wasn’t clear when TSMC, the biggest EUV customer of ASML, would receive the equipment. A representative
Nvidia Corp chief executive officer Jensen Huang (黃仁勳) made an appearance during a speech by Super Micro Computer Inc CEO Charles Liang (梁見後) at Computex Taipei yesterday to champion the benefits of direct liquid cooling for artificial intelligence (AI) data centers. US-based Super Micro manufactures server solutions and provides information technology infrastructure under the trade name of Supermicro. Describing himself as Liang’s long-time partner and Supermicro’s “best sales guy,” Huang said that with the widespread transition to generative AI capable of generating text, images and video, data centers would need to upgrade to greener, more efficient systems. Huang added that the estimated US$3
DISAGREEMENT: German Chancellor Olaf Scholz has spoken out against the tariffs, as it would affect his country’s auto industry, which benefits from business in China Volvo Car AB has started to shift manufacturing of Chinese-made electric vehicles (EVs) to Belgium as the EU prepares to impose tariffs on China-made EVs, the Times reported. On top of transferring production of Volvo’s EX30 and EX90 models to Belgium, the automaker might also move assembly of some Volvo models bound for the UK, the report said, citing unidentified people. Volvo, which is owned by Zhejiang Geely Holding Group Co (吉利控股集團), is seen as the most exposed among western automakers to the potential tariffs, the Times said. Trade frictions between the EU and China have led to a barrage of anti-dumping probes
The US is opening antitrust investigations into two of the world’s most valuable companies, Microsoft Corp and Nvidia Corp, over their dominance of the rapidly emerging field of artificial intelligence (AI), people familiar with the matter said. Microsoft has poured more than US$13 billion into its partnership with OpenAI, tapping the startup’s generative AI technology for the Bing search service, Edge internet browser and Windows. Nvidia, the world’s most valuable chipmaker, has acknowledged allocating its chips to customers it deems most likely to use them quickly, prompting concerns that it has too much power over the market for cutting-edge AI semiconductors. The