PCB materials and equipment manufacturers form alliance to grab big orders from Shenshan

2024/11/05

Business Times
October 21, 2024
Author Business Times Li Shuhui

TSMC estimates that capital expenditures in 2024 will be US$30 billion, and capital expenditures in 2025 are expected to overtake this year. The huge capital expenditures are like releasing a large order of nearly NT$1 trillion to the semiconductor upstream and downstream supply chains, attracting PCB material factories and equipment Companies are accelerating their entry into semiconductor applications and have become prominent in forming alliances to enter TSMC's supply chain.

TSMC recently held a press conference and estimated that capital expenditures in 2024 will be slightly more than US$30 billion. Although capital expenditures in 2025 have not yet been decided, TSMC expects that there is a high probability that it will exceed this year. This year, it will be used in CPU, GPU, AI accelerator and other related applications. Revenue has tripled year-on-year, proving that the demand for AI is real and not a bubble.

The industry points out that the semiconductor industry is closed. In particular, specialty chemicals account for less than 1% of the bill of materials (BOM). The proportion is extremely low, but it will affect product performance. The supply chain has always been difficult to replace. In addition, the semiconductor industry has equipment. The business model is tied to materials, so finding an alliance with the existing TSMC supply chain as a guide has become a shortcut for the PCB supply chain to join the TSMC supply chain.

FCCL leader Taihong recently signed an MOU with Japanese equipment manufacturer TAZMO. It is reported that TAZMO is a well-known manufacturer of wet process and handling equipment in the semiconductor and panel industries, and is already part of TSMC's supply chain. Taihong is aggressively targeting specialty chemicals. There are only two suppliers in TSMC, and one of them owns 90%. The legal person believes that Taihong will form an alliance with Japanese companies and cut into TSMC's supply.

Taihong believes that the alliance with Japanese companies will shorten the development time. Considering the rigid nature of the supply chain, Taihong's revenue investment will show a step-by-step growth, and there will be a period of dormancy. It is expected that the revenue share will have an opportunity in 2026 Reaching double digits.

Shengmao, the world's third largest tin products factory, is taking advantage of semiconductor business opportunities through the acquisition of Darui Technology. It is understood that TSMC’s BGA solder balls are mainly supplied by Nippon Senju and Singapore’s Hengshuo. Darui has passed the test of the semiconductor giant. However, Darui’s parent company Shanghai Feikai Materials’ mainland-owned status has become a negative factor in entering TSMC’s supply chain. After Shengmao acquires 100% of Darui's equity, it is expected to reduce the sensitivity of Lenovo.

Shengmao predicts that the acquisition will be completed before the end of this year, and the proportion of semiconductor-related revenue will surge from the current 3 to 5% to 15%.

The trend of PCB equipment manufacturers seeking alliances with TSMC's supply chain is even more obvious. Equipment manufacturers Mude and Xunde introduced ASE and Jiadeng respectively through private placements. Xunde's stock price last week stood at the 200 yuan mark. According to the stock exchange announcement, Shareholder Jiadeng increased his holdings of Xunde by 728 and 14 consecutively in August and September.

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