The automotive chip industry has long been dominated by IDMs. Leading IDMs, including Infineon, NXP and Renesas have accounted for approximately 85% of the automotive chip market, while about 15% of the manufacturing process is typically outsourced to contract manufacturers like TSMC. In fact, TSMC has less than 5% of the market share. And, as of 2020, automotive chips accounted for less than 4% of TSMC’s quarterly revenue.
Despite this, recently TSMC is taking a two-pronged approach to expand its footprints in the automotive chip sector, especially amidst the rise of in-vehicle infotainment systems and advanced driver assistance systems (ADAS).
Securing the mature nodes
First, it is consolidating its position within the automotive sector in relation to the chips with component-level functions, such as various sensors, power controllers and microcontrollers.
Here, TSMC already have an advantage, since such chips typically use mature process nodes. For example, the microcontrollers used in vehicles are typically manufactured at nodes between 40nm to 60nm. Given the wide variety of the microcontrollers needed and the high costs of maintaining production lines, the fab-lite approach of IDMs has driven them to outsource 60%-70% of the world’s automotive microcontrollers to TSMC, while producing discrete units like IGBTs in-house.
To enable ADAS and autonomous driving, the growing importance of CMOS sensors, also using mature nodes between 0.5-micron (µm) and 28nm, has prompted TSMC to double down on the mature processes compatible with these new developments. As early as 2018, TSMC already made several achievements in relation to CMOS sensors, including the successful development of Ge-on-Si sensor for 3D range sensing applications with performance superior to Si sensor and the successful application of wafer stack technology to prototype Single Photon Avalanche Diode (SPAD).
Most recently, TSMC’s highly speculated move to establish a fab in Japan in close coordination with Sony, the world’s largest CMOS manufacturer, is also widely interpreted as another move into the automotive chip sector, especially given its close proximity to Sony’s CMOS fab.
Pushing ahead with the advanced nodes
At the same time, TSMC has also calibrated its advanced process nodes for automotive chips handling computing-focused workloads, such as autonomous driving, immersive infotainment and wireless connectivity.
In 2020, TSMC announced what it claimed to be the world’s first 7nm process for automotive – the Automotive Design Enablement Platform (ADEP). The platform, developed in collaboration with EDA toolmaker Ansys, aims to enhance the reliability of the 7nm process for ADAS and autonomous driving applications, especially in terms of the stringent safety standards required by the automotive industry. It has already received qualification such as AECQ-100 and ISO26262.
At the 2021 Online Technology Symposium, TSMC also revealed the recalibrated version of its 5nm process: the N5A. It is currently undergoing reviews to obtain the necessary qualifications, and will be available in the third quarter of 2022.
With Samsung stuck at 7nm and and Intel’s delayed release of its own 7nm process, it seems that TSMC is going to boost its share in the automotive market for the time being.