TSMC could buy memory company
TSMC has achieved great success as the semiconductor market de-aggregated and integrated device makers (IDMs) declined and the model moved towards fabless chip companies and their foundry suppliers. However, TSMC’s problems are exemplified by its recent sales figures, which were down on a year ago because of slow down in its major market – smartphones (see TSMC’s sales year awaits smartphone boost).
Liu was appointed as chairman after the retirement of founder Morris Chang earlier this year but almost immediately Liu has been hit by the problem of meeting Chang’s bullish final forecast for the company. At the beginning of the year Chang said TSMC would achieve between 10 and 15 percent year-on-year revenue growth. For the first eight months of the year TSMC’s growth stands at 5.8 percent.
Meanwhile the memory chip market has continued to be strong with Samsung, SK Hynix and Micron achieving sales growth for the first half of 2018 of 36, 56, and 45 percent respectively. It has been forecast that this DRAM undersupply boom could end soon.
However a memory-logic partnership makes increasing sense as the functionality of leading-edge chips is increasingly calling for large amounts of memory, sometimes non-volatile memory, to be included on the same chip as the logic.
Liu did not identify potential acquisition targets in his interview with Nikkei.
Most of the large candidates that would significantly add to TSMC’s sales revenue of $32 billion in 2017 are not available. While Micron, with annual sales of about $20 billion is a potential target it is likely that the United States would block any sale.
Next: Other options
A joint venture with Micron is one possibility, particularly because Micron’s partnership with Intel has cooled over recent quarters (see Intel, Micron end collaboration on 3D XPoint NVM).
This would leave some of the second-tier suppliers such as Nanya Technology or Macronix as potential acquisition targets. Nanya is focused more on DRAM while Macronix has extensive research interests in non-volatile memory. As both are headquartered in Taiwan they would be an easy acquisition by way of logisitics and corporate culture.
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