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Samsung and TSMC all the more dependent on the loyalty of their customers


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Samsung and TSMC all the more dependent on the loyalty of their customers


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POSTER: computer news   ||   SAMSUNG AND TSMC ALL THE MORE DEPENDENT ON THE LOYALTY OF THEIR CUSTOMERS

DATE:2015-02-18

Every new step lithography process technology requires the manufacturer of semiconductor products not only better and more expensive equipment, but also the significant amount of time to implement.  However, some physical laws do not provide that changes in consumer quality of products, which took place during the migration to the previous step process technology.  That is, the costs are rising significantly, and the returns from them may fall behind.  Few developers of chips, including Intel and Samsung, can afford the content of modern lithographic production - other services seek to contract manufacturers like TSMC, Globalfoundries and UMC.  The opposite trend is true to a lesser extent: Intel is trying to attract customers to release their products at its facilities, but makes it more likely for sharing some technologies and developments, rather than from the banal desire to finish loading capacity.

Bloomberg News by analyzing information from open sources and expert survey found that contract manufacturers of semiconductor products is steadily increasing capital costs.  For example, TSMC and Samsung are currently referred to these needs up to 40% of its revenue, and it is not the limit.  The fact that these manufacturers are very dependent on customers such as Apple and Qualcomm, which require speedy development of new technologies and the construction of additional facilities.  And the cost of construction of a modern factory for the production of chips and processors up to $ 5 billion. Of course, these costs to return the contract manufacturer can only be obtained at the expense of funds for their services from the customer.  In this sense, TSMC and Samsung interesting to work with large clients that provide good momentum.  Suffice  to recall, as Apple has left many customers without access to TSMC 20-nm technology at a certain stage, to understand how important are the priorities in the relationship of partners.  Even Samsung's struggle for orders Apple is ready to forgive all the wrongs of the smartphone market.  

It turns out that Samsung and TSMC themselves driven into a vicious circle.  New process technologies and new factories require funds, companies need new orders, they are all more dependent on large customers.  In this specific unit costs with the transition to a more modern process technologies in the early stages of implementation may be 50% higher than under the previous stage process technology, and only with the passage of time and the expansion of production is gradually decreasing.  Large customers such as Apple, Qualcomm and MediaTek aware of contractors depending on their production program, and so boldly traded for the best from their point of view, the terms of contracts.  Profitability of contractors with the suffering, because large customers tend to push lower prices.


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