TSMC Stays on Top

An interesting article on EE Times shows Taiwan's foundry giant TSMC continues to grow and gain market share. According to EE Times:

Amid the downturn, which up and which is seeing red? An analysis from FBR Capital Markets found that Taiwan Semiconductor Manufacturing Co. Ltd is looking up, but the rest are down.

According to FBR, recent checks suggest that the average foundry wafer shipment in Q 09 will be down by nearly 40 percent q-on-q (versus the historical average of down 5percent), following a 30 percent decline in Q4 08 (versus a historical average of up 5 percent). "Our current assessment for Q2 09 is for the average foundry wafer shipment to be flat to up 2 percent quarter-over-quarter (versus a historical average of up 10 percent) with the exception of TSMC, where we expect wafer shipment to be up 8 percent quarter-over-quarter."

The firm believes that TSMC has remained on track with an overall wafer shipment decline of 35 percent to 40 percent q-on-q in Q1 09, though Q2 09 wafer shipment forecasts have recently been revised up from up 3 percent to 5 percent q-on-q to up 8 percent q-on-q.

"Additionally, we believe that TSMC has gained incremental market share at AMD at the expense of Chartered Semi. Foundry checks indicate TSMC is well positioned to continue to outperform and gain market share, while demonstrating superior cost/margin structure," FBR said.

I have personally argued for a while now (not on this blog) that the economic downturn is going to force bad companies to close and the well managed companies that pay attention to scale, cost, efficiency, market share and debt/equity ratios will suffer but survive. TSMC is one of those companies that will continue to survive. It does help that they have significant market share but there capabilities and continued progress in developing and maintaining their know-how should see them through. Of course they will also suffer in the downturn, but their continued success does not surprise me. But, as a word of caution, we can never really know what tomorrow brings!

EE Times: Foundry watch: TSMC stays on top