Semiconductor industry is growing rapidly led by the juggernauts Tesla and Apple. Both famously designed their own chips but outsourced to get massive production. Hence to peek into the upstream of their supply chain could help investors to gain deeper insight on beneficiaries of irresistible and continuing growth of these two behemoths.
First, Tesla. In 2019, it introduced the Tesla Full Self-Driving (FSD) computer, which features a chip of Tesla’s own design, and is produced by Samsung. Tesla makes vehicles in only two facilities right now: Fremont, Calif. and Shanghai, China. During pandemic, it is able to have in-house production of semiconductors materials. I believe it’s also reliant on China suppliers including chip sourcing. On a side note, for years Tesla has been teasing the development of a new in-house supercomputer optimized for neural net video training because Tesla posses an insane amount of video data from its fleet of millions of vehicles. so it can utilize these video data to train its neural nets to be much smarter. In comparison to Google’s radir strategy, Tesla believes eye-mimicking camera system is sufficient to realize driverless driving.
EV manufacturing also is heavily reliant on some critical minerals and rare earths, which is almost domineered by China. In 2018 the U.S. derived 98% of its processed rare earths from China. Beijing also produced 62% of global rare earth raw materials in 2018, whereas the U.S. extracted just 12.2%. Exposing a significant vulnerability, the acquisition of crucial supply materials from a geopolitical adversary may ultimately generate supply cut-offs in projected conflict. Samsung supplied Tesla back then who are its suppliers now? There are 5 semiconductor suppliers: Video Multimedia Semiconductors Advanced Micro Devices, Inc.(AMD), General Analog and Mixed Signal Semiconductors STMicroelectronics NV, Power, Control and Mixed Signal Semiconductors Monolithic Power Systems, Inc., Specialty Analog and Mixed Signal Semiconductors InvenSense, Inc., and Other Nonvolatile Memory Semiconductors Giantec Semiconductor Corp. The key player is AMD.
Second, Apple. Apple use Qualcom, TSMC, Intel A15 Bionic of iPhone 13 and Apple silicon in the Mac per old news, digging into its supply chain now there are 22 semiconductors suppliers:
And a significant supplier – Taiwan Semiconductor Manufacturing Co., Ltd. Semiconductor Foundry Services.
ASML’s customers:
‘Intel Corp.’, ‘Samsung Electronics Co., Ltd.’,
‘Taiwan Semiconductor Manufacturing Co., Ltd.’,
‘Mitsui Chemicals, Inc.’,
‘Semiconductor Manufacturing International Corp.’,
‘GigaLane Co., Ltd.’, ‘Wuxi Chipown Micro-electronics Ltd.’,
‘United Microelectronics Corp.’, ‘Faraday Technology Corp.’,
‘Western Digital Corp.’,
‘Siliconware Precision Industries Co., Ltd.’, ‘TOSHIBA Corp.’,
‘Powertech Technology, Inc.’, ‘GLOBALFOUNDRIES, Inc.’,
‘ASML Holding NV’, ‘Ultratech, Inc.’, ‘Canon, Inc.’, ‘Nikon Corp.’,
‘ELAN Microelectronics Corp.’, ‘Mitsui & Co., Ltd.’,
‘Tianma Microelectronics Co., Ltd.’, ‘Innolux Corp.’, ‘NEC Corp.’,
‘Key Tronic Corp.’, ‘Shenzhen Qingyi Photomask Ltd.’], dtype=object)
the industry L6 they are in:
[‘Microprocessor (MPU) Semiconductors’,
‘Diversified Technology Hardware’,
‘Semiconductor Foundry Services’,
‘Multi-Type Fibers and Polymers Manufacturing’,
‘Electronic Interconnect Components’,
‘Power Module and Subassembly Electronic Components’,
‘Other Programmable Logic and ASIC Semiconductors’,
‘Data Storage Drives and Peripherals’,
‘Semiconductor Assembly and Packaging Services’,
‘Diversified Industrial Manufacturing’,
‘Photolithography Equipment Manufacturing’,
‘Specialty Analog and Mixed Signal Semiconductors’,
‘Diversified Materials’, ‘Other Computer Display Equipment’,
‘Conventional Flat Panel Display Equipment’,
‘General Infrastructure and Network Consulting’,
‘Multi-Type Electronic Manufacturing Services’], dtype=object)