TSMC(US:TSM)2025-09-25 05:58Summary of Conference Call on Global Semiconductors and SiC Technology Industry Overview - The focus is on the semiconductor industry, specifically the potential use of Silicon Carbide (SiC) in advanced packaging processes, particularly by Taiwan Semiconductor Manufacturing Company (TSMC) [1][12]. Key Points and Arguments 1. SiC Adoption in CoWoS: TSMC is considering SiC to replace existing materials in the CoWoS (Chip on Wafer on Substrate) process due to its high thermal conductivity, which is three times that of silicon [1][14]. 2. Applications of SiC: - Conductive SiC: Used for Thermal Interface Material (TIM) to improve heat transfer from silicon chips to cooling systems [2][13]. - Semi-insulating SiC: Proposed for interposers, replacing conventional silicon or RDL materials [2][13]. 3. Implementation Challenges: The transition to SiC technology faces challenges such as capacity limitations, extended production times, and increased contact resistance, indicating that widespread adoption may take time [3][15][17]. 4. Market Capacity Estimates: - Current CoWoS capacity is estimated at approximately 70 kilowatts per month (kwpm), projected to grow to around 110 kwpm by the end of the next year [4][16]. - If all interposers and TIM are replaced by SiC, the required capacity would be 220 kwpm, which is double the current SiC capacity of 92 kwpm by the end of 2025 [4][16]. 5. Company-Specific Insights: - DISCO: Expected to benefit significantly as its SiC revenue contribution has decreased from nearly 20% to one-third of previous levels. Higher consumables intensity of SiC could improve margins [5][25]. - Renesas: Holds a 35% stake in Wolfspeed, valued at approximately $400 million, which could provide upside if Wolfspeed benefits from advanced packaging [5][26]. - SUMCO: Currently overvalued with no direct benefits from SiC, presenting a potential short opportunity [5][28]. - Infineon: Does not produce substrates in-house and will not benefit from the SiC trend despite being a SiC maker [27]. Additional Important Insights - Wolfspeed's Capacity: Although capable of producing 12" substrates, Wolfspeed's financial constraints will limit its capacity expansion, impacting its ability to meet potential demand from CoWoS [27]. - Market Reactions: The market has reacted positively to news regarding SiC, with GlobalWafers' share price increasing by 36% since early September, although Japanese markets have not shown similar movements [25]. - Investment Ratings: - DISCO: Outperform with a price target of ¥52,800 [7]. - Renesas: Outperform with a price target of ¥2,300 [8]. - Infineon: Outperform with a price target of €49.00 [9]. - SUMCO: Market-Perform with a price target of ¥1,260 [10]. - TSMC: Outperform with a price target of NT$1,444.00 [11]. This summary encapsulates the critical insights from the conference call regarding the semiconductor industry and the implications of SiC technology for various companies involved.