Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) new US investment plan would be positive for domestic equipment vendors, Yuanta Securities Investment Consulting Co (元大投顧) said yesterday.
The chipmaker’s expanded investment in Arizona is expected to benefit Taiwanese turnkey engineering companies in the initial stage of fab construction, Yuanta said in a report.
TSMC’s plan to build three more chip fabs, two advanced packaging plants, and one research and development center over the next four years will also have a constructive effect on Taiwanese original equipment manufacturing (OEM) firms and consumable vendors over the medium and long term, it said.
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“TSMC’s additional US$100 billion investment in Arizona highlights the company’s key role in the US semiconductor manufacturing ecosystem. This continues the trend in recent years in which advanced node technologies and supply chain localization will continue to drive the medium to long-term growth of the semiconductor equipment sector,” Yuanta said.
Front-end equipment for advanced semiconductor processes accounts for 70 to 80 percent of global semiconductor equipment spending, the report said.
However, the semiconductor equipment market is highly concentrated, with the top five global suppliers — ASML Holding NV, Applied Materials Inc, Lam Research Corp, Tokyo Electron Ltd and KLA Corp — capturing about 80 percent of the market, it said.
Taiwan’s forte is in front-end equipment OEM, turnkey automation service, back-end process equipment supply, component maintenance and repair service, and channel business, it said.
“With the experience of the first fab in Arizona, TSMC suppliers should see improved turnkey operations in the second fab in terms of contract allocation, project content and cost structure,” Yuanta said.
TSMC’s continued expansion of its US operations would benefit its major clean room — automated supply system and turnkey engineering vendors United Integrated Services Co (漢唐) and Marketech International Corp (帆宣), which derived 50 to 60 percent and 20 to 30 percent respectively of their revenue from TSMC’s US fabs in the past two to three years, the report said.
Other potential beneficiaries are OEM firms Foxsemicon Integrated Technology Inc (京鼎) and Feedback Technology Corp (翔名), as well as advanced packaging-related companies Grand Process Technology Corp (弘塑), Scientech Corp (辛耘) and All Ring Tech Co (萬潤), it said.
Suppliers of semiconductor consumables used in the manufacturing process, such as Topco Technologies Corp (崇越), Gudeng Precision Industrial Co (家登), Kinik Co (中砂) and Allied Supreme Corp (上品), were also named in the report.
Moore Securities Investment Consulting Co (摩爾證券投顧) analyst Hsieh Ming-che (謝明哲) yesterday said that TSMC’s new US investments could help Taiwanese equipment vendors attract new orders and boost their earnings.
“While the costs of shipping the equipment to the US and increased installation costs must be factored in, equipment vendors like Marketech and Allied Supreme would be among the major beneficiaries from demand growth for advanced node equipment and materials in the medium to long term,” Unique Satellite TV quoted Hsieh as saying.
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