Mannerisms

"If TSMC was an IDM they'd be the No.2 in the industry - passing Samsung, challenging Intel," says Malcolm Penn, CEO of Europe's leading semiconductor industry analysts, Future Horizons, "in the foundry industry, TSMC's market lead is now unassailable in terms of sales, wafer starts and capacity."

TSMC now represents about 50 per cent of the foundry industry. It can pick and choose its customers.

"Being accepted as a customer of TSMC is a high bar, they're pretty picky about who they'll take", says Rupert Baines, vice president of marketing at picoChip which has its chips made at TSMC.

Penn reckons that a move by TSMC into design is: "Inevitable: both technically and commercially."

Meanwhile, there's a growing mismatch between industry growth and capex.

MOS capacity is growing at 1 per cent per quarter but needs to grow at 3 per cent per quarter to keep up with demand.

"The industry's saying: 'I've got too little capacity so I'm stopping investing in new capacity'", says Penn.

Asked why? he replies: "Because the industry is fed up with selling capacity too cheap."

TSMC is following the industry of under-investing compared to market growth.

The elephant wants more leaves.