China's SMIC is world's fifth-largest semiconductor chip foundry

[Martian]

China's SMIC is world's fifth-largest semiconductor chip foundry | IC Insights

Semiconductor Manufacturing International Corporation (SMIC) is China's largest semiconductor manufacturer. (Photo credit: Wafer manufacturing - Semiconductor Manufacturing International Corporation)

According to the latest data from IC Insights (see chart below), China's Semiconductor Manufacturing International Corporation (SMIC) is the world's fifth-largest semiconductor chip foundry.

As China's largest semiconductor manufacturer, SMIC had a great year in 2013. SMIC revenue boomed year-over-year by 28% to total $1.97 billion.

There is more good news. SMIC has started initial production of 28nm chips.
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TSMC and GlobalFoundries Led Foundry Market in 2013 – IC Insights.

TSMC and GlobalFoundries Led Foundry Market in 2013 – IC Insights.

Top 13 Foundries Account for 91% of Total Foundry Sales in 2013
[01/29/2014 11:55 PM]
by Anton Shilov

[Note: IDM is an acronym for "integrated device manufacturer." An IDM manufactures semiconductor chips like a foundry and also sells the chips inside its own consumer electronics products.]
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SMIC Starts Supplying 28nm CMOS | Electronics360

"SMIC Starts Supplying 28nm CMOS
Peter Clarke
27 January 2014

China's leading indigenous chip manufacturer Semiconductor Manufacturing International Corp. (Shanghai, China) has announced that it has completed the development of two manufacturing processes at the 28nm node and put its first 28nm multiproject wafer (MPW) run through a fab at the end of 2013.

SMIC is now able to supply 28nm polysilicon gate and 28nm high-k dielectric metal gate (HKMG) processes and said it has a library of over 100 cores available developed by third-party IP partners and internally at SMIC.

SMIC said the first MPW run was used by SMIC and customers for verification of process and circuits and that it would run more MPWs during 2014 but did not indicate how quickly it would move to volume production of 28nm wafers. Previously it had been reported that SMIC would gain first revenues from 28nm polysilicon-gate in 3Q14 and from 28 HKMG in 2H15.

SMIC is offering two 28nm processes in a manner similar to Taiwan foundries TSMC and United Microelectronics Corp. and no doubt in the hope it can take some of their business on price. TSMC has dominated the ramp up of 28nm foundry manufacturing and in the fourth quarter of 2013 28nm process technology was responsible for about one third of its sales of NT$145.81 billion (about $4.8 billion). According to IHS' forecasts, the pure-play foundry revenue potential for 28nm will continue to rise with a CAGR of 19.4 percent from 2012 to 2017.

The 28nm manufacturing processes have been mainly used for mobile and consumer equipment such as smartphones and tablet computers, set-top boxes and networking ICs. TSMC ramped the volume supply of 28nm wafers to customers in 2011 which puts SMIC about three years behind TSMC but only a couple of years behind Globalfoundries and UMC. (article continues)"
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SMIC Unveils 28nm Readiness and MPW Milestone | Design & Reuse

"SMIC Unveils 28nm Readiness and MPW Milestone

SHANGHAI, Jan. 26, 2014 -- Semiconductor Manufacturing International Corporation ("SMIC"，NYSE: SMI; SEHK: 981) , China's largest and most advanced semiconductor foundry, announced today that its 28nm technology has been process frozen and the company has successfully entered Multi Project Wafer (MPW) stage to support customer's requirements on both 28nm PolySiON (PS) and 28nm high-k dielectrics metal gate (HKMG) processes. Over 100 IPs from multiple third party IP partners as well as SMIC's internal IP team are prepared to serve various projects from worldwide design houses that have been showing interest in SMIC 28nm processes.

28nm process technologies primarily target mobile computing and consumer electronics related applications, such as Smartphone, Tablets, TV, Set-top Boxes and networking. It provides customers high performance application processors, cellular baseband, wireless connectivity etc. According to IHS' forecasts, the pure-play foundry revenue potential for 28nm will continue to rise with a CAGR of 19.4% from 2012 to 2017.

'I am pleased to announce the successful 28nm process milestone, which enables SMIC to better position itself in engaging and serving mobile computing related customers," said Dr. Tzu-Yin Chiu, Chief Executive Officer & Executive Director of SMIC. "As the first foundry in mainland China to offer 28nm process technologies, this significant milestone demonstrates SMIC's continuous growing capabilities in offering leading foundry technologies to worldwide IC designers.'

"The first SMIC 28nm MPW shuttle included both 28PS and 28HKMG related customer products for verification, which was already launched at the end of 2013 as planned," said Dr. Shiuh-Wuu Lee, Executive Vice President of Technology Development of SMIC. 'By taking more MPW shuttles in 2014, we will continue to take more positive steps to strengthen and diversify our technology offerings and meet customers' growing demands on both advanced and differentiated technologies.'"

 

[Martian]

China's SMIC will need many years to catch industry leader TSMC, which has 50% market share in the global foundry business.

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TSMC Showing 20nm HKMG and 16nm FinFET Wafers at ARM TechCon - Legit Reviews

TSMC Showing 20nm HKMG and 16nm FinFET Wafers at ARM TechCon
Posted by Nathan Kirsch | Wed, Oct 30, 2013 - 4:31 PM

Taiwan Semiconductor Manufacturing Co. (TSMC) is at ARM TechCon showing off 20nm Soc and 16nm FinFET-based development wafers. The 20 and 16nm nodes both posed significant hurdles for TSMC, so to see wafers being produced on those nodes is a good sign. The 20nm node is the first to use double patterning, requiring more masks and additional runs under an immersion lithography machine. The 16nm node represents TSMC's first use of FinFETs (multi-gate or tri-gate architectures) for even lower power use and higher performance.

TSMC has taped out several 20nm HKMG processor designs and is ready for volume production in early 2014. TSMC expects to let customers start designing and taping out 16nm FinFET chips before the end of the year and production 16nm FinFET wafers to enter production a year later in Q1 2015.

 

[Martian]

Taiwan Semiconductor Manufacturing Company (TSMC), with its 20nm technology, is the world leader in ARM (RISC-based) chips for mobile computing. In comparison, Intel chips are CISC (ie. complex instruction set computing) based for desktop PCs.

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TSMC Begins Volume Production of Chips Using 20nm Process Technology

"TSMC Begins Volume Production of Chips Using 20nm Process Technology
January 16th, 2014 at 11:36 pm - Author Anton Shilov

Taiwan Semiconductor Manufacturing Co. on Thursday said it had begun mass production of chips using 20nm process technology ahead of its own schedule. The new fabrication process will help fabless chip designers (e.g., AMD, Nvidia, Qualcomm, etc.) to create processors with higher transistor count, lower power consumption and improved performance.

TSMC's 20nm technology (which the company calls CLN20SOC) is mainly designed for highly-integrated system-on-chip devices that benefit from increased transistor density. The fabrication technology relies on high-k metal gate technology that should ensure fairly high clock-rates of chips without increase of leakage currents. TSMC will offer only one version of the 20nm-class manufacturing process, which will help the company to ramp up volume production using the tech in a short period of time.

"We have two fabs, fab 12 and fab 14 that complete the core of the 20nm-SoC. As a matter of fact, we have started production. We are in the [high]-volume [20nm] production as we speak right now," said C. C. Wei, co-chief executive officer and co-president of TSMC.

At present, certain modules of TSMC's fabs 12 and fab 16 are producing chips using 20nm process technology. The fab 15 modules 3 and 4 will initiate production using 20nm process tech sometimes in May, 2014.

While TSMC is tight-lipped regarding nature of chips it makes using 20nm fabrication process, last year it said that the first five 20nm products will be aimed at mobile computing, CPU and PLD [programmable logic device] segments.

TSMC expects wafers processed using 20nm process technologies to account for around 10 per cent of this year's wafer revenue. In the fourth quarter the 20nm fabrication process is projected to account for 20 per cent of TSMC revenue."

 

[Martian]

TSMC, SMIC, IBM, Samsung, GlobalFoundries, and UMC. Four uncertainties. Also Intel's SoFIA.

28nm (TSMC 2011, SMIC sometime in 2014) volume production
20nm (TSMC in January 2014) volume production
14/16nm (TSMC 16nm FinFET in fourth quarter 2014) risk production in Dec. 2013 with volume production in fourth quarter 2014
10nm (TSMC says they are ready to go in fourth quarter 2015) risk/trial production before ramp up

The citation from Electronics360: "TSMC ramped the volume supply of 28nm wafers to customers in 2011 which puts SMIC about three years behind TSMC but only a couple of years behind Globalfoundries and UMC."

Taiwan Semiconductor Manufacturing Company (TSMC) is the world leader in RISC-based ARM semiconductor chips for mobile phones and tablets. TSMC started volume production of 20nm in January 2014. TSMC will begin volume production of 16nm FinFET (ie. 3D chip architecture) in the fourth quarter of this year.

I can only compare TSMC and SMIC based on the current snapshot. If SMIC is able to proceed as fast as TSMC then SMIC is three years behind TSMC, which introduced volume production of 28nm in 2011. GlobalFoundries and UMC did not start small-volume production of 28nm until early last year. They are both in the process of increasing their yield. This puts SMIC about two years behind GlobalFoundries and UMC.

SMIC, GlobalFoundries, UMC, and Samsung license the 28nm fabrication technology from IBM. IBM has shown test-wafers of 20nm and 14nm. However, it is not clear whether the IBM wafers were memory chips (which are simple repeated patterns) or the more advanced logic chips (which are more difficult to manufacture). With a few minor exceptions, TSMC generally does not manufacture memory chips due to the lower margin.

IBM's problem has always been taking the technology to build one cutting-edge wafer in the lab and transforming it into a reliable mass-manufacturing process. Ten years ago, IBM went into the foundry business to compete against TSMC. IBM wooed away TSMC's largest customer NVIDIA.

However, IBM failed miserably and was late to market by six months. Due to IBM's inability to reliably mass-manufacture the semiconductor chips on its wafers, ATI (which remained a TSMC customer) surpassed NVIDIA and became the world's largest graphics card seller for that year. NVIDIA learned its lesson and moved its orders back to TSMC.

The reason I can't give a good answer (to the question of how far SMIC lags) is that there are too many uncertainties. IBM's 20nm and 14nm technology (both gate-last) are different from its 28nm technology (gate-first). IBM was stuck at 28nm for an extra two years in comparison to TSMC (which has been consistently gate-last). Can IBM make a smooth transition from gate-first 28nm to 20nm gate-last?

Without additional problems, IBM is currently two years behind TSMC. Technically speaking, IBM provides "consultation" services. However, the Common Platform Alliance members (ie. IBM, Samsung and GlobalFoundries) are all relying on IBM's expertise. IBM has individual licensing side-deals with UMC and SMIC.

The issue is further complicated by IBM's recent effort to sell its chip business.

In conclusion, there are four large uncertainties. Firstly, IBM has a history of encountering delays in transitioning from a single lab wafer to mass manufacture. Secondly, IBM's partners are currently two years behind TSMC and their yield (70%?) is probably still lower than TSMC (95%?). This means TSMC still has better technology at 28nm, lower cost for itself and customers per wafer, and higher profit margins. This gives TSMC an advantage to invest more money into R&D for the next generation of semiconductors.

Thirdly, can IBM make a smooth transition from 28nm gate-first to 20nm gate-last? Finally, will IBM's effort to sell its chip business result in delays for the Common Platform Alliance, UMC, and SMIC?

There is a fifth major problem. Let's say SMIC catches up to TSMC in manufacturing technology. Does that mean it's a level playing field? No. TSMC has 30 years of libraries, IP (intellectual property), and tools. That is the reason Intel's SoFIA chips will be manufactured at TSMC in 2015.

TSMC's advantages in addition to cutting-edge 20nm RISC-based process technology.

"TSMC is the world's largest dedicated semiconductor foundry, providing the industry's leading process technology and the foundry's largest portfolio of process-proven libraries, IP, design tools and reference flows."

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"Intel's SoFIA Could Be A Real Bombshell - Seeking Alpha

Dec 2, 2013 - SoFIA is Intel's integrated applications processor, cellular baseband, and ... The shocker, however, is that this chip will be built at TSMC."

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"How Intel is buying, building a piece of the tablet market | PCWorld

Jan 18, 2014 - Intel has an ambitious goal for 2014: get its Atom chips into 40 million tablets, ... Bay Trail until new Atom chips code-named Broxton and SoFIA come out in 2015. ... not in Intel's own fabs but by contract manufacturer TSMC."

 

[Martian]

Semiconductor showdown: TSMC, Intel, Samsung, Global Foundries, IBM, SMIC, and UMC

This thread is for people who are interested in semiconductors. I'll start with two posts about SMIC and TSMC's 16nm FinFET. Afterwards, I'll start analyzing the strengths and weaknesses of the various competing firms. Also, I will illuminate the reasons behind TSMC's current technological lead and evaluate the probability of other companies in closing the gap.

In essence, this thread will keep an eye on the semiconductor industry and keep track of who's winning or losing.
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SMIC is China's largest semiconductor manufacturer. Its future prospect looks really good.

Firstly, SMIC derives an astounding 40 percent of its revenue from China. With a strong home market, SMIC will continue to prosper as the Chinese economy grows at 7.5% annually.

Secondly, SMIC has caught up to Global Foundries, Samsung, and UMC at 28nm. This means SMIC is no longer confined to the low end of the semiconductor industry. SMIC can now compete at the middle of the market, which comprises the bulk of industry sales.

In October 2011, TSMC was the first foundry to mass manufacture wafers (and chips) at 28nm. TSMC was able to charge a premium for about two years until Global Foundries and Samsung caught up in technology and yield.

In January 2014, TSMC transitioned to a more advanced 20nm process. Currently, Qualcomm and Apple are paying a premium to mass manufacture chips with TSMC's 20nm technology. 28nm has become a commodity and no longer commands a premium.
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SMIC caps two-year turnaround with record-high earnings | South China Morning Post

"SMIC caps two-year turnaround with record-high earnings
by Bien Perez
19 February, 2014

SMIC's wafer foundry in Shanghai expects more orders for chips on the back of China's 4G mobile network expansion.
(Photo: Bloomberg)

Semiconductor Manufacturing International Corp (SMIC), the mainland's largest contract chipmaker, expects business in its core mainland market to pick up later this year on the back of the country's 4G mobile network expansion and the growing adoption of smart cards.

"We expect more significant ramp-up in 2015," SMIC chief executive Chiu Tzu-yin said in a conference call with analysts yesterday.

The once-struggling, Shanghai-based company capped a remarkable two-year turnaround under Chiu when it reported record earnings for the 12 months to December.

Its net profit last year rose 660 per cent to a record US$173.2 million, from US$22.8 million in 2012, due to strong demand from customers on the mainland, increased wafer revenue and greater use of capacity at its chip fabrication plants.

China continues to be a source of high growth "¦ 40.4 per cent of our total revenue

CHIU TZU-YIN, SMIC CHIEF EXECUTIVE

Revenue increased about 22 per cent to a record US$2.07 billion from US$1.70 billion in 2012.

'China continues to be a leading source of high growth for SMIC,' Chiu said. 'In 2013, China accounted for 40.4 per cent of our total revenue.'

Mainland customers consist of domestic 'fabless' semiconductor companies, which design chips and outsource fabrication to semiconductor foundries like SMIC.

The company's biggest multinational customers include Texas Instruments and Qualcomm, which supply most of the essential semiconductors used in smartphones.

Inventory correction, however, saw SMIC post a 68.5 per cent year-on-year decline in fourth-quarter net profit to US$14.68 million. Revenue advanced 1.2 per cent to US$491.79 million.

In a research note, Bernstein Research forecast SMIC's 40/45-nanometre foundry process, which primarily makes chips for applications such as smartphones and media tablets, would contribute up to 25 per cent of total revenue this year, compared with 13 per cent last year.

Bernstein said it expected further growth for SMIC to come from capacity expansion. Last June, SMIC formed a US$3.6 billion joint venture with Beijing's municipal government to build a new chip fabrication plant in the capital.

SMIC's capital expenditure this year will reach US$880 million, of which US$570 million will be for the Beijing project."

 

[Martian]

TSMC, ARM announce first 16nm FinFET tapeout of big.LITTLE Cortex-A57 SoC | ExtremeTech

There are four distinct stages in semiconductor production.

1. Test wafer. This is a proof-of-concept. It shows the underlying technology is capable of producing an advanced chip.

2. Tape-out. "Taping out refers to the initial design of the chip having been completed for creation of the masks that will be used to print the actual chips, although further tweaks are likely as test production is carried out."[1]

3. Risk production. "'Risk production' is used in the semiconductor industry to describe the first general availability of a new IC process, following the preceding test chip phase that manufacturers use to wring out a new technology."[2] In plain English, risk production refers to creating a few batches of wafers to determine yield and an opportunity to improve the process technology.

4. Mass production.

4a. Initial mass production. If there are serious problems with the process technology, yield per wafer can be as low as single digits to 30%.

A decent initial mass production yield is 50%.

4b. Ramp up. Mature mass production yield is 95%.[3] The time between initial mass production (with relatively low yield) and mature mass production after ramp up (with high yield per wafer) is typically one to two years.

References:

1. Apple and TSMC Reportedly Completing Designs for 20-nm A7 Chip With Early 2014 Availability - Mac Rumors
2. EDA vendors roll out advances for 20 nm design - DSP-FPGA.com
3. Report: Low yields force TSMC to revert to 8 inch wafers for Apple iPhone 6 fingerprint sensors
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6-core 16nm FinFET ARM Cortex-A57 chips spotted in the wild | SemiAccurate

"6-core 16nm FinFET ARM Cortex-A57 chips spotted in the wild
MWC 2014: Not just one, a full wafer of them fresh from the oven
Mar 3, 2014 by Charlie Demerjian

What do you get when you put a 6-core ARM A57 on TSMC's 16nm FinFET process? A lot of pretty pictures and a really big bunch of test chips to play with too.

At MWC last week, SemiAccurate spotted a nice A57 wafer hidden away in the ARM booth. Not much was said about it other than 16nm, TSMC, and A57 cores all of which, "Taped-out February, 2014"³. That means it is as fresh tasting as it is pretty.

If you look at the wafer below, it is pretty obvious that there are six cores on the die plus a bunch of other test structures. This is a test chip after all, and the purpose is to optimize the A57 core for the upcoming process, and given the time from tape-out, it is hot from the oven. This means the work on the process is still ongoing and likely far from done.

[My personal comment to explain a physical phenomenon: The different structures on the chip act as a diffraction grating, because the geometry is smaller than the wavelength of visible light. Hence, the spectrum of colors.]

Pretty, shiny FinFETs make big cores from small transistors

Why would you do something as complex as a multi-core A57 SoC that will never actually be a product? Remember ARM's PoP IP? It takes a lot of work to get to the point of having an almost turnkey solution for licensees, and if a foundry does it right, it is a serious competitive advantage for them. In short this kind of thing is the homework that makes a licensee's life easier. For the rest of us we get pretty pictures and SoCs with new cores faster. Hard to argue that one."

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TSMC, ARM announce first 16nm FinFET tapeout of big.LITTLE Cortex-A57 SoC | ExtremeTech

"TSMC, ARM announce first 16nm FinFET tapeout of big.LITTLE Cortex-A57 SoC
By Joel Hruska on February 25, 2014 at 11:45 am

TSMC and ARM have announced a further milestone on the road towards 16nm FinFET production, with the first successful tapeout of an asynchronous big.LITTLE SoC that pairs four Cortex-A53 cores with two Cortex-A57s. This follows the two company's joint collaboration on a single Cortex-A57 core 10 months ago, and means that 16nm FinFET designs are moving towards fruition — though full production is still a little ways down the road.

For ARM, advancing an asynchronous big.LITTLE chip is a critical part of its strategy to drive adoption of its power reduction technology. The first generation big.LITTLE devices are all synchronous, meaning that companies like Samsung implemented four small cores alongside four large ones (typically a Cortex-A7/Cortex-A15 pairing). This made it easier to switch between operating modes — the operating system never saw more than four cores at any time, so it couldn't become confused about which processors to run on which CPUs. A 4:2 pairing makes more sense from an optimization perspective where manufacturers may only want two cores for occasional burst activity and heavy lifting, but it requires more tuning on the OS front.

According to ARM, this new SoC more closely resembles the kind of test chip that a customer might actually build in a shipping product — though it's still a test chip and not a commercial design. (article continues)"

 

[Martian]

My comment on BusinessWeek.

Taiwan's Protests Point to a Deeper Crisis | BusinessWeek

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Business is booming at Taiwan Semiconductor Manufacturing Company (TSMC). They are fully booked for the next six months.

TSMC capacity booked to the end of 3Q14 | DigiTimes

 

[Martian]

Staring down the TSMC semiconductor gun barrel

Why is IBM (the leader of the Common Platform Alliance) trying to sell its fabs in New York?[1]
Why is Global Foundries trying to sell its business via an IPO in 2015?[2]
Why is Samsung desperate to "Kill Taiwan" (ie. "Kill TSMC")?[3]

The answer is the same for all three questions. TSMC has 50% of the global foundry business[4] (ie. they own leading-edge process technology and manufacture the chips) and it is growing at double-digits.[5]

The reason for TSMC's relentless and astonishing growth is technology leadership in ARM-based RISC (reduced instruction set computing) chips.

TSMC looks unbeatable for years to come. Here's why.

2011 (4th quarter) TSMC mass produces 28nm logic chips and ships to customers.[6]
2014 (1st quarter) TSMC announces mass production of 20nm logic chips.[7]
2015 (early 2015) TSMC announces commencement mass production date for 16nm FINFET logic chips.[8]

eInfochips launches design services for 16nm silicon chips - Financial Express
"A recent TSMC report suggests that 16nm FinFET technology will achieve 55 percent power reduction and 35 percent higher speed as compared to the standard 28nm HK/MG planar process."

[Additional technological improvements]
2014 (end 2014) TSMC announces 16nm FINFET+ with performance enhancement and/or lower power supply requirement[8]
2015-2016 TSMC announces 16nm FINFET Turbo with improved performance enhancement and/or improved lower power supply requirement[8]

2015 (4th quarter) TSMC announces risk production date for 10nm logic chips.[9]

The only company in the world that can match TSMC technology is Intel. However, Intel process technology is specialized for CISC logic chips. It takes two to three years to customize a design for Intel process technology.[10] Also, Intel has stated it has no intention of competing against TSMC on price.[11]

In conclusion, TSMC's revenue and profit will continue to scale with the growth in the mobile market. TSMC looks unbeatable for the next five years. As an example, TSMC's 28nm debuted in 2011. After three years, TSMC continues to dominate the 28nm market.[12]

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References:

1. IBM Is Looking Forward to Sell Semiconductor Fabs - X-bit labs
2. Globalfoundries eyes IPO as ATIC sets expectations | EE Times
3. Samsung wants to kill Taiwan - Targets Hon Hai, TSMC | TechEye
4. TSMC eyes 50% global market share - Taipei Times (Wed, Mar 26, 2014)

5. TSMC 1Q14 sales beat guidance | DigiTimes
"TSMC 1Q14 sales beat guidance
Steve Shen, DIGITIMES, Taipei [Thursday 10 April 2014]

Taiwan Semiconductor Manufacturing Company (TSMC) has announced consolidated revenues of NT$49.96 billion (US$1.66 billion) for March, up 6.7% sequentially and 13.2% on year."

6. TSMC 28nm Technology in Volume Production
"Hsinchu, Taiwan – October 24, 2011 –TSMC (TWSE: 2330, NYSE: TSM) today announced that its 28nm process is in volume production and production wafers have been shipped to customers. TSMC leads the foundry segment to achieve volume production at 28nm node."

7. TSMC Begins Volume Production of Chips Using 20nm Process Technology - X-bit labs
8. TSMC Fighting for Apple's 16nm A9 Processor Business - Patently Apple
9. Taiwan Semiconductor Manufacturing Company Limited
10. Electronics Weekly News | General | Intel's 14nm for mobile delayed till 2015
"Intel's 14nm for mobile delayed till 2015
David Manners
13th February 2014
...
Intel's 14nm delay must be worrying Altera which had been promised access to the process this year."

11. TSMC: Intel's Threat In Foundry Business Is Overstated, Says Citi - Emerging Markets Daily - Barrons.com
"Jan 15, 2014 - Intel's CEO said the company won't compete on price with lower cost chipmakers such as TSMC. When Intel's factory capacity is opened to ..."

12. TSMC capacity booked to the end of 3Q14 | DigiTimes