According to Nikkei Asia Review, TSMC, the world's largest chip contractor, is testing the industry's leading 7-nanometer process chips, with 12 customers. Large-scale production is expected to start in the first half of 2018. Wei Zhejia, the joint CEO of TSMC, said that TSMC was ready to face fierce competition from Samsung. "We will always be the most trustworthy technology and capacity supplier for customers in the coming years," Wei said.
The executive also reconfirmed that TSMC would release the world's first 5-nanometer chip in the second quarter of 2019.
Earlier this year, TSMC said it had formed a team to develop 3-NaNO chips. No company in the world has declared such advanced technology.
Nanoparticles represent the size of transistors on a chip. The smaller the transistor size, the more convenient it is to implant into the chip, and the stronger the chip will be, and the faster it will run.
But at the same time, the smaller the transistor size, the more difficult it is to build such a sophisticated chip.
Wei Zhejia said that the R&D Department of TSMC would spend an astonishing amount in 2017, which would far exceed the R&D cost in 2016, but did not give a specific figure.
In 2016, TSMC spent $2.2 billion on R&D, accounting for more than 7.4% of the company's annual revenue, with 5,400 engineers engaged in R&D activities.
Wei's response came hours after Samsung announced plans to build chips using 8, 7, 6, 5 and 4 nanotechnologies.
Samsung and TSMC have been competing for market share, and TSMC is now looking to dominate.
Apple will use TSMC's 10-nanometer chip for the upcoming 10th anniversary version of the iPhone.
According to recent reports in Korean media, Samsung Electronics will promote and spin off its chip-making department for other companies. The move is widely seen as Samsung's move to get more orders from technology giants such as Apple, Nvidia and Qualcomm.
Samsung's chip division relies heavily on orders from its parent company for handheld devices and television businesses to generate revenue. Samsung's flagship smartphone Galaxy S8 has just been released, using its own 10-nanometer chip.
Nobunaga Chai, an analyst at Taiwan's Electronic Times, said Samsung's chip division would still be affected by its core business.
"Because Samsung designs its own chips and builds its own terminal products, it may somehow compete with customers it wants to catch up with, such as Apple," Chai said. "It's doubtful whether Samsung can convince its potential competitors to hand over their blueprints."
In addition, according to Cai Zhiqun of TSMC, smartphone brands in China will be hit hard this year, and it may be difficult to achieve a 10% increase in shipments, because the new iPhone will seriously affect the market demand of other brands of mobile phones.
Cai said that changes in the new iPhone, such as the cancellation of the home screen button and the increase in the screen share of the flagship model, are all functions that Chinese brands are flocking to.
Moreover, the tight supply of NAND flash memory will also exert great pressure on Chinese smartphone brand manufacturers, especially the entry-level and mid-level will bear the brunt.
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