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TSMC accounts for 70% of global contract MCU production

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TSMC accounts for 70% of global contract MCU production

Taipei, May 26 (CNA) Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest pure wafer foundry operator, has accounted for about 70 percent of global contract production of micro control units (MCUs) used in cars, the government-sponsored Market Intelligence & Consulting Institute (MIC) said Tuesday.

Cheng Kai-an (鄭凱安), a senior MIC industry analyst, said integrated device manufacturers (IDMs) largely serve as the major suppliers of automotive chips and under their business models, these IDMs tend to outsource contract chipmakers like TSMC for production.

An IDM is a semiconductor company that designs, manufactures and sells integrated circuit (IC) products.

Cheng said that since MCUs need more complicated production processes that leads to higher production costs, outsourcing has become a major strategy for IDMs.

Under such circumstances, TSMC has secured a 60 percent-70 percent share in the MCU outsourcing market in the world and has played a critical role in the global automotive chip production at a time when the world's auto industry is suffering a shortage of chips to roll out their models, Cheng said.

According to the MIC, the top five IDMs that supply MCUs for car production are Netherlands-based NXP Semiconductors N.V., Japan's Renesas Electronics Corp., Germany's Infineon Technologies AG, U.S.-based Texas Instruments Inc. and Arizona-headquartered Microchip Technology Inc.

The MIC said the five IDMs largely outsource production of MCUs using the matured 28 nanometer to 65nm processes.

In the first half of last year, Cheng said, the global auto industry suffered a slowdown caused by the COVID-19 pandemic, seeing sales plunging, which prompted many automakers to cancel orders on automotive chips and lower their chip inventories.

Cheng said the world's auto market started to climb out of the previous doldrums since the fourth quarter of last year but found it faced a shortage as many chipmakers assigned more capacity to non-auto clients.

Last week, TSMC attended a virtual semiconductor meeting hosted by the U.S. Department of Commerce as automakers have urged the Taiwanese firm to supply more automotive chips.

After concluding the meeting, TSMC issued a statement that it would increase its production of MCUs by 60 percent this year and by 30 percent from 2019 before the COVID-19 hit the world to help alleviate the global automotive chip shortage.

TSMC said it had already taken unprecedented action such as reallocating its production capacity for non-auto chips to boost automotive chip production.

In early May, Reuters reported that U.S. Secretary of Commerce Gina M. Raimondo had pressed TSMC and other Taiwanese chipmakers to supply more chips to American automakers.

In response, TSMC said it had prioritized its automotive chip supply in a bid to ease the current global shortage, and its top priority at the time was reallocating production capacity.

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