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Taiwan’s TSMC looking to expand footprint in auto industry

TSMC car chips sales could reach US$4.56 billion in 2023

TSMC building. (Reuters photo)

TSMC building. (Reuters photo)

TAIPEI (Taiwan News) — Taiwan Semiconductor Manufacturing Co. (TSMC) is looking to bolster its position within the automotive sector, industry sources told DigiTimes.

TSMC is looking to focus on three areas to expand its automotive business, including signing long-term supply deals with automakers, developing special manufacturing processes for car chips, and building joint-venture fabs with automotive component makers overseas, the sources said.

Instead of signing deals with component suppliers, TSMC is focusing on landing supply contracts directly from carmakers. Sources told DigiTimes that the chipmaker has reportedly secured deals with VW, GM, Toyota, Honda, Tesla, Mercedes-Benz, and BMW.

For the second part of its EV strategy, TSMC is working to speed up the long verification process for automotive chips. The world’s largest contract chipmaker has been expanding tech support for a bigger range of car chips, including 28nm embedded flash memory, 28nm, 22nm, and 16nm mmWave chips and LiDAR sensors, DigiTimes said.

TSMC has also obtained certification for manufacturing 22nm MRAM, which is in accordance with automotive Grade-1 specifications, according to the report. TSMC also announced on April 26 its N3AE (Auto Early) chips, which offers automotive process design kits based on its 3nm node to allow customers to release designs on the advanced node for automotive applications.

The third part of TSMC’s automotive plan involves setting up joint-venture fabs abroad with car component manufacturers. It is currently building its first fab in Japan’s Kumamoto Prefecture in a deal with Sony Semiconductor Solutions Corporation and car components maker Denso.

Meanwhile, reports have said TSMC is also planning on a possible fab in Germany with NXP Semiconductors NV, Bosch, and Infineon Technologies. However, no final decision has been made yet on the possible German expansion.

In 2022, chips for the automotive sector made up around 5% of the Taiwanese company’s sales, while the first quarter of this year saw that rise to 7%. TSMC’s car chip sales could reach NT$140 billion (US$4.56 billion) this year, the report noted.