TSMC has entered a "one-man showdown" in advanced processes, with 2nm undergoing unprecedented investment and expansion. Etching is a critical equipment in the wafer fab's key processes. A unit of high-precision etching equipment costs upwards of 100 million yuan, and each 2nm fab requires more than 100 units of etching equipment, creating enormous business opportunities.

In the case of the leak of TSMC's advanced 2-nanometer process, the prosecutor found that the cause of the incident was an engineer from the equipment factory who collected data to improve the etching process equipment. The equipment industry revealed that TSMC has entered a "one-man showdown" in advanced processes. In response to the strong demand for AI (artificial intelligence) chips from international customers, 2-nanometer has entered an unprecedented large-scale investment and expansion. Etching is an important equipment for the key process of the wafer fab. The price of a high-precision etching equipment is as high as hundreds of millions of yuan. Each 2-nanometer factory requires more than 100 etching equipment. The business opportunities are huge. TSMC adopts a diversified supplier strategy, and the three major manufacturers in the United States and Japan share the pie. In order to win subsequent mass production orders, each supplier needs to make every effort to improve the equipment to meet TSMC's mass production needs in order to win a higher market share. It can be said that the competition is fierce. According to the reporter's investigation, TSMC's procurement strategy has always been to adopt diversified supply, firstly to disperse risks and secondly to achieve bargaining power. In terms of semiconductor equipment supply, Japanese company Tokyo Electron (TEL) has a market share of nearly 100% in yellow light process lithography coating/developing equipment, and a market share of 70-80% in furnace equipment. In these two key equipment, TEL has a strong competitive advantage and can be said to be an indispensable and important supplier to TSMC. Even if TSMC wants to adopt a diversified procurement strategy, no other equipment manufacturer can compete with TEL. However, in the field of etching equipment, TEL faces a "three-way competition" situation. TSMC's 2-nanometer etching equipment procurement is mainly divided into three parts, with Lam Research, Applied Materials and Tokyo Electron (TEL) as the three major suppliers. Equipment industry insiders said that etching equipment is divided into front-end conductor equipment and back-end non-conductor etching equipment. Lam Research mainly supplies front-end etching equipment, Applied Materials covers both the front and back ends, and TEL is more inclined to supply the back end. TSMC has become a "one-man show" in advanced processes, especially 2-nanometer, where it dominates the world. In response to strong demand for AI (artificial intelligence) chips from international customers, TSMC has entered an unprecedented generation of process expansion. The 2-nanometer family includes two plants planned in Hsinchu Science Park in Taiwan, 5-6 plants invested in Kaohsiung, and the US plant will also start production of 2-nanometer processes. Because the process is quite complex, 2-nanometer wafer fab equipment covers hundreds of sites. Industry insiders analyzed that etching is an important equipment in the key process of wafer fabs, mainly used to remove unnecessary materials on the surface of the chip to form the required circuit patterns or other fine structures; a high-precision etching equipment costs as much as 3 to 4 million US dollars (equivalent to about NT$100 million), and each 2-nanometer factory requires more than 100 etching equipment. The business opportunities are huge. In order to win subsequent mass production orders, each supplier needs to make every effort to improve the equipment to meet TSMC's mass production needs in order to win a higher market share. It can be said that the competition is fierce. It is understood that TSMC has increased its demand for suppliers, and TEL wants to extend from back-end etching equipment to front-end etching equipment, that is, to share TSMC's front-end conductor etching equipment orders. However, the equipment still needs room for improvement. Chen Liming, one of the sales persons, may be anxious and want to see good performance at work, so he asked his old TSMC colleagues Wu Bingjun and Ge Yiping for help. Through remote login to TSMC's remote database system, he viewed confidential files and copied photos of the manufacturing process diagram as a reference for improving the etching equipment. However, the photos were too large and were discovered by TSMC's information security personnel. After an internal investigation and a lawsuit, the Supreme Prosecutors Office recently prosecuted Chen, Wu, and Ge. Prosecutors believe that this case involves core national technologies that are the lifeblood of Taiwan's industries, posing a serious threat to the international competitiveness of the semiconductor industry. The three individuals committed serious crimes. Chen Liming is being asked to serve a 14-year sentence for "stealing trade secrets with intent to use overseas," a 3-year sentence for "stealing trade secrets," and an 8-year sentence for "using national core key technology trade secrets overseas" under the National Security Act. Wu Bingjun is being asked to serve a 9-year sentence for "stealing trade secrets with intent to use overseas" and a 7-year sentence for "using national core key technology trade secrets overseas." Ge Yiping is being asked to serve a 7-year sentence for "using national core key technology trade secrets overseas." Equipment manufacturers say the semiconductor industry has experienced numerous leaks. It was common for TSMC to collaborate with equipment manufacturers on advanced process development in the past, but when it came time to cite drawings to improve equipment, decisions were made through formal meeting minutes or senior management. It's unusual for engineers to use their personal connections to obtain large amounts of data. However, judging from TSMC's response, the prosecution's indictment and TEL's statement, there has been no loss to TSMC's operations, and the information has not been leaked to a third party. The impact on the cooperative relationship between TSMC and TEL is likely to be limited, but how TEL will "apologize" remains to be seen.

Source: Content compiled from ec.ltn

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