Why TSMC is earning more for its old 90nm chips now than it did five years ago

The manufacture of integrated circuits continues to advance full steam ahead. The deficit that industries such as the automobile, consumer electronics or household appliances, among many others, have been facing for months, is not due to the fact that there are no chips. Semiconductor manufacturers have been insisting for months that are producing more than ever, but even then they are not able to respond to the increase in demand.

At this juncture, it is easy to intuit that there must be a huge demand for high-integration chips, which are those that are produced using the most advanced photolithographic technologies, such as, for example, the 5 and 7 nm nodes. What is not so clear is what is happening with older nodes implementing fully amortized and mature integration technologies, such as 40nm, or those that are even older than 40nm.

40, 45, 65 and 90nm nodes are still a key source of revenue for TSMC today

The Taiwanese semiconductor manufacturer TSMC, which is the largest chip producer in the world, presented a few hours ago the balance of its business during the last quarter of 2021, and many of the figures it collects are surprising. As we can guess, a very important part of its income comes from the integrated circuits it produces using the 5 and 7 nm nodes (the latter is the largest contributor to the company’s coffers since the third quarter of 2019).

However, and here comes the surprise, the older integration technologies are still a fundamental pillar of this company. That they are photolithographs that move in the range that extends between 10 and 28 nm falls within what is absolutely reasonable, but that a very important part of TSMC’s income come from the 40, 45, 65 and 90 nm nodes it is surprising. As we are about to verify, it is very reasonable that these photolithographs continue to be used, but what is not easy to foresee is that they are so important for this company.

Tsmc Nodos Anandtech

Source: Dr. Ian Cutress (AnandTech)

TSMC is getting more for 90nm chips now than it was five years ago

The graph that we publish above these lines has been prepared by Ian Cutress, one of the editors of AnandTech, and very clearly collects the contribution made to the coffers of TSMC by each of the nodes that remain active. The 5 and 7 nm, as expected, are extremely important because they are the most advanced that this company has, and for this reason they are being used to produce the highly integrated chips that we can find inside some of our devices, such as, for example, the Qualcomm Snapdragon 888 processor or the A15 of the iPhone 13, both 5nm.

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Manufacturing these chips is expensive not only because they use the most advanced and complex photolithographic technology that TSMC has in production, but also because economy of scale still has room for action on this integration technology. This simply means that as a company develops its resources to increase its production capacity, the more its manufacturing costs are reduced. However, it is not necessary to use high integration chips in all usage scenarios.

There are many usage scenarios where it is not necessary to use the most advanced and expensive integration technologies

Microprocessors in smartphones, desktop and laptop computers, servers, workstations, and communications equipment, among other devices, clearly benefit from the benefits of using more advanced photolithography, especially if we stick to to your performance per watt. However, there are many other usage scenarios where it is not necessary to use the more advanced and expensive integration technologies.

The automotive and appliance industries, to name just two with which most of us are familiar, do not require chips produced with these expensive photolithographs. In a last generation car we can find tens of chips, and possibly only one or two, such as those that deal with the execution of artificial intelligence algorithms to implement the most advanced driver assistance technologies, need to be produced using highly integrated technologies.

The increase in demand for chips that use consolidated photolithography is causing 28, 40, 45 and 65nm nodes to also increase their production

This is the juncture that explains why the older nodes remain crucial for TSMC. The surprising thing is that, as we can see in the graph, during the last quarter of 2021 this company has gained more for 90nm chips than in any other quarter of the last five years. But even more interesting is the trend shown in the graph: the increase in demand for chips that use consolidated photolithography is causing 28, 40, 45 and 65 nm nodes to also increase their production.

Who would have thought just two years ago, just before the chip crisis exploded that has placed us in the situation we find ourselves in today. The figures we’ve dug into in this article describe TSMC’s activity, but we can be sure that Samsung, Intel and GlobalFoundries, as well as other smaller semiconductor manufacturers, are also watching their older, established and fully amortized they are resurfacing. The demand for chips is so high that even the technologies that seemed outdated and destined to cease production are not escaping the stress that shakes this market.

Cover photo | TSMC

More information | TSMC

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