Core Viewpoint - TSMC's recent business adjustments, including exiting specific sectors and consolidating wafer fabs, are strategic moves to adapt to market changes and enhance its competitive position in the semiconductor industry [6]. Group 1: Business Adjustments - TSMC plans to exit the GaN foundry business within two years and close the 6-inch Fab 2 in Hsinchu Science Park, Taiwan [3]. - The company will consolidate three 8-inch fabs (Fab 3, Fab 5, and Fab 8) and redeploy up to 30% of its workforce to the Southern Taiwan Science Park (STSP) and Kaohsiung factories [3][4]. - These adjustments aim to address labor shortages, reduce costs, and optimize asset utilization by reallocating human resources and integrating wafer fabs [3]. Group 2: Advanced Packaging and Technology Development - TSMC is transforming the 6-inch fab into a CoPoS panel-level packaging facility to meet the increasing demands for advanced packaging technologies due to enhanced chip performance [4]. - The company is focusing on developing EUV protective film technology to improve yield and control costs, as EUV lithography is critical for new process nodes [5]. - TSMC has reduced orders for High NA EUV systems and is establishing the 8-inch Fab 3 as an internal R&D center for EUV protective films to decrease reliance on ASML and its supply chain [5]. Group 3: Market Position and Industry Impact - TSMC's strategic adjustments are expected to strengthen its leading position in the semiconductor industry and trigger a chain reaction that promotes higher industry standards [6]. - The shift towards proprietary protective films is anticipated to optimize processes, enhance yield, expand capacity, and lower costs, thereby improving profitability and maintaining TSMC's competitive edge [5].

Core Viewpoint - TSMC is exiting the GaN foundry business and restructuring its wafer fabs to optimize operations and reduce costs, while focusing on advanced packaging and internal development of EUV mask protection films [2][4][6]. Group 1: TSMC's Strategic Moves - TSMC will close its 6-inch GaN foundry in Hsinchu Science Park within two years and integrate its three 8-inch fabs to address labor shortages and improve asset utilization [2]. - The 6-inch fab will be repurposed for CoPoS advanced packaging, while the 8-inch fabs will focus on internal production of EUV mask protection films to reduce reliance on ASML and its supply chain [4]. - TSMC's investment in advanced process nodes has been significant over the past decade, but the high costs associated with EUV technology are prompting a shift in strategy to enhance yield and cost efficiency [4]. Group 2: Importance of Mask Protection Films - EUV technology requires new mask and protection film methods, as traditional organic films lack the necessary transparency and stability for EUV processes [5]. - TSMC's proprietary protection films are expected to optimize workflows, improve yields, expand capacity, and reduce costs, thereby enhancing profitability and maintaining its competitive edge [5]. - The transition to in-house mask protection film development is crucial for TSMC as it moves towards 2nm processes and expands CoWoS packaging technology [5]. Group 3: Market Dynamics and Competition - The exit from the GaN sector highlights intense price competition from Chinese competitors in the third-generation semiconductor market [6]. - Global IDM manufacturers, including Texas Instruments and Infineon, are also expanding their internal GaN capacities, indicating a growing focus on this technology [6].