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Tech Giant in One Chart: Who Are the Key Suppliers of TSMC?

$Taiwan Semiconductor Manufacturing(TSM)$   , the leader in semiconductor foundry, recently revealed plans to increase capital expenditure during its earnings call. This will broadly benefit the previously overlooked semiconductor equipment industry. Additionally, some material companies will benefit from the capacity shortage in the chip manufacturing supply chain. Based on TSMC's capital expenditure allocation, the relevant equipment companies are ranked as follows:

Detailed Semiconductor Manufacturing Process and Related Companies

Photolithography: Drawing Circuit Diagrams on Wafers

Photolithography is the most complex and expensive step in chip manufacturing. It's a process that precisely prints circuit designs onto silicon wafers, with the core technology transferring designs to photoresist-coated silicon wafers through photochemical reactions. Only $ASML Holding NV(ASML)$   can provide the most advanced lithography machines. Recently, market expectations for ASML's shipments have been raised. EUV shipment expectations for 2026 increased from 20 to 29 units, and for 2027 from 28 to 40 units, due to TSMC's need to build A14 process capacity in advance for use in 2028. Additionally, rising DRAM prices in the storage sector will lead to increased CapEx from companies like Samsung.

Deposition: Adding Materials to Chips

Thin film deposition adds layers of materials, such as metals, to the wafer surface. These layers form complex 3D structures inside the chip. $Tokyo Electron (8035.JP)$, $Lam Research(LRCX)$  , and $Applied Materials(AMAT)$   all supply equipment for this stage.

Etching

Etching removes unwanted parts from the wafer, leaving only the required circuit shapes. $Lam Research (LRCX.US)$ is the leader in this field. Due to memory chips' greater dependence on etching equipment and their growth rate exceeding that of the overall chip sector, Lam Research has shown stronger momentum than its competitor Applied Materials in recent years.

The etching stage is often followed by a cleaning stage. Companies in this field include $ACM Research (ACMR.US)$ and Japan's $Screen Holdings (7735.JP)$ . However, etching equipment companies often also produce cleaning equipment.

Ion Implantation

This stage involves injecting specific ions (such as boron or phosphorus) into silicon, making certain areas conductive or insulating. This step determines the transistor's switching characteristics. $Axcelis Technologies (ACLS.US)$ is a company involved in this stage.

Front-end Inspection: Identifying Faulty Chips

The inspection stage looks for defects, short circuits, and performance issues. The production of 2nm chips will increase manufacturing costs. Consequently, inspection will shift from sampling to full inspection, leading to exponential growth in demand for inspection equipment. $KLA Corp (KLAC.US)$ is the absolute leader in this stage, with profit margins higher than companies like Applied Materials.

Packaging

Chips themselves are fragile and need protective packaging. This stage uses plastic or ceramic to encase the bare chip for water and heat protection. Packaging also brings out the chip's pins so it can be inserted into the motherboard.

Final Testing

Packaged chips undergo another comprehensive test. Only those that pass can leave the factory. Companies involved in this stage include $Teradyne (TER.US)$ , $Advantest (6857.JP)$ , and $Onto Innovation (ONTO.US)$.

Materials in Semiconductor Manufacturing

In addition to the steps and companies mentioned above, the chip production process involves many types of consumables/materials, such as silicon wafers, photoresist, mask consumables, specialty gas, and wet electronic chemicals.

$Shin-Etsu Chemical (ADR) (SHECY.US)$ is a global giant in the semiconductor materials field, particularly dominant in silicon wafers. It's also one of the world's top three photoresist producers. $Tokyo Ohka Kogyo (4186.JP)$ is the world's largest photoresist manufacturer.

Other related companies include $Photronics (PLAB.US)$ for photomask production, $MKS Inc (MKSI.US)$ in the pneumatic testing field, and $Air Liquide SA Unsponsored ADR (AIQUY.US)$ in France for electronic specialty gases. Companies providing high-purity chemical materials for semiconductors include $Entegris (ENTG.US)$ and $Cabot (CBT.US)$.

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