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2024-02-26

[News] Announcement on Additional Subsidies for Chip Act Expected This Week; Intel Could Receive Billions

U.S. Commerce Secretary Gina Raimondo previously mentioned during an online Intel foundry event that the U.S. must continue investing to regain global leadership and requires “Chip Act 2.”

According to a report from TechNews citing from global media Tom’s Hardware, the U.S. Department of Commerce plans to announce additional subsidies for the semiconductor bill as soon as this week.

Raimondo is scheduled to attend the “Revitalizing American Innovation” conference hosted by the Center for Strategic and International Studies (CSIS) in Washington on February 26th and will unveil the latest subsidies under the “Chip Act.”

In this regard, Intel is expected to receive a government subsidy of USD 10 billion, while TSMC and Samsung may also be included in the latest subsidy list. Samsung Electronics is, according to its own expectation, investing USD 17 billion to construct a foundry in Taylor, Texas, while TSMC is investing roughly USD 40 billion to build a foundry in Phoenix, Arizona. However, it’s rumored that due to the U.S. prioritizing domestic companies, the expected subsidy amounts may differ from those of Intel.

The U.S. government enacted the “Chip Act” in 2022, but subsidies have been modest, with only three American companies currently benefiting, including BAE Systems, GlobalFoundries, and Microchip Technology.

Due to Intel’s investment of USD 43.5 billion in the United States since 2021, constructing new semiconductor plants, sources cited by the report believe that the likelihood of Intel receiving USD 10 billion (equivalent to 23% of the investment amount) is quite high.

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(Photo credit: TSMC)

Please note that this article cites information from TechNews and Tom’s Hardware.

2024-02-24

[News] TSMC’s Kumamoto Plant – Semiconductor Bubble or Once-in-a-Century Opportunity?

TSMC’s establishment of a plant in Kumamoto, Japan, with its opening ceremony scheduled for February 24th, has sparked attention regarding the economic growth benefits it brings.

According to TechNews cited Kumamoto Governor Ikuo Kabashima, TSMC’s investment is expected to bring economic benefits to Kumamoto, reaching JPY 6.85 trillion within 10 years. Governor Kabashima even claimed it as a “once in a century” opportunity for Kumamoto.

Firstly, the most noticeable aspect as per the report is the salary increase.

According to the hiring conditions set by TSMC, starting salaries are JPY 280,000 (roughly USD 1,858.65) for university graduates, JPY 320,000 (roughly USD 2124.18) for master’s degree holders, and JPY 360,000 (roughly USD 2389.70) for PhD holders. With an additional four-month bonus and performance dividends, the package even exceeds the conditions offered to fresh graduates by Japanese company SONY Semiconductor.

Additionally, the hourly wage for dispatched workers is as high as JPY 3,000 (roughly USD 19.91), which is more than three times higher than local companies, prompting other industries to follow suit in retaining employees.

Furthermore, the Kumamoto plant has been mostly completed by 2023, with part of the office building already in use, resulting in 400 employees commuting from Taiwan to work. At the same time, TSMC has announced plans to construct a second fab, with construction expected to commence by the end of the year and operations slated to begin by the end of 2027.

Since TSMC’s investment in Japan, it has also attracted at least 35 related supply chain companies to follow suit with investments, thereby altering the local financial ecosystem.

This is because they must provide loan financing and consultation services for employee housing, among others. Consequently, Japanese financial institutions have also begun to focus on Taiwanese companies, including Kumamoto Bank and banks with nationwide reach.

In addition, as per comprehensive reports from Japanese media, some Japanese citizens believe that the establishment of the TSMC plant has significantly changed the atmosphere of the city, making it more vibrant.

A 32-year-old interior decorator from Kumamoto Prefecture mentioned that there are so many new residential decoration projects that he cannot finish them all, and he spends his salary and tips from his supervisor on nightclub expenses or buying cars. One night, he spent JPY 150,000 just at a hotel.

Another bar owner also revealed that he once encountered a customer with tanned skin who spent JPY 300,000 in one night, speculating that he might be the owner of a construction company. Some customers are decked out in designer brands, and one spent JPY 1 million drinking each day for three consecutive days. Additionally, local supermarkets in Kumamoto have even set up a “Taiwanese Food Section.”

Kikuyo Town, Home to 43,000, May Face the Arrival of the ‘Black Ships’

While TSMC has spurred the economy in Kumamoto, some Japanese media have dubbed it the “Black Ship” and “Semiconductor Bubble.”

With skyrocketing land prices and unprecedented hourly wages, some Japanese business owners are forced to make the decision to close shops because the land has become too expensive, and they may not be able to afford the rent in the future.

As per a report from the Japan Times, Kikuyo Town, home to TSMC’s Kumamoto plant, was originally a town of 43,000 people, but residential land prices have surged by over 20% this year, marking the largest increase in over 30 years.

Apart from soaring hourly wages and housing prices, Kikuyo Town will soon face an influx of over 1,700 employees, putting pressure on the town’s roads and transportation systems. Additionally, the high water consumption of fabs raises concerns among locals about whether industrial water usage will affect domestic water supply.

While TSMC has undoubtedly contributed significantly to the local economy, the most profound impact is felt by long-term residents of the town. Nevertheless, it cannot be denied that TSMC has injected vitality into this aging town, making local life more vibrant and dynamic.

TrendForce has previously reported that Japan’s resurgence in the semiconductor arena is palpable, with the Ministry of Economy, Trade, and Industry fostering multi-faceted collaborations with the private sector. With a favorable exchange rate policy aiding factory construction and investments, the future looks bright for exports.

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(Photo credit: TSMC)

Please note that this article cites information from TechNews and The Japan Times.

2024-02-24

[News] Latest Overview on TSMC’s Global Expansion Initiatives

2020 was undoubtedly a milestone year in the development of TSMC, the leading semiconductor foundry. According to a report from TechNews, TSMC’s global expansion has reached locations in China, the United States, Japan, and Germany, solidifying its goal of being a “long-term and trustworthy provider of technology and capacity.”

On February 24th, TSMC will hold an opening ceremony for the Kumamoto plant, which is scheduled to commence production by the end of the year. With the opening of the Kumamoto plant, let’s review TSMC’s global expansion plan:

Arizona, United States

In May 2020, TSMC officially announced the selection of Arizona, United States, as the location for constructing an advanced process fab.

Initially planned to invest USD 12 billion, the facility aims to build a N5 process fab with a monthly capacity of 20,000 wafers. Construction was scheduled to commence in 2021, with mass production slated to begin by the end of 2024, creating approximately 1,600 job opportunities in the local area. Subsequently, in 2022, TSMC announced plans to start N4 advanced process production at the Arizona fab to meet market demands.

In December 2022, the second phase of construction began at the fab in Arizona, United States. It is expected to commence production using N3 process technology by 2026. The total investment for both phases amounts to approximately USD 40 billion, creating 4,500 jobs opportunities at TSMC.

Upon completion of both phases, the combined annual capacity will exceed 600,000 wafers, with the market value of end products estimated to exceed USD 40 billion. This project ranks as one of the largest foreign direct investment projects in US history.

However, due to the delay in the first phase’s production timeline from the end of 2024 to the first half of 2025, the production schedule for the second phase will also be postponed to start after 2027.

Kumamoto, Japan

In October 2021, TSMC, in collaboration with its customer Sony Group’s wholly-owned subsidiary, Sony Semiconductor Solutions, announced the establishment of a subsidiary called Japan Advanced Semiconductor Manufacturing (JASM) in Kumamoto, Japan. Sony Semiconductor Solutions plans to invest approximately USD 500 million to acquire up to 20% of the shares of JASM.

Following this, Denso, a major Japanese automotive components manufacturer, also announced its investment in JASM. TSMC further increased its investment in the Kumamoto plant, raising the investment amount to nearly JPY 1 trillion.

It plans to introduce 12/16-nanometer processes in addition to the originally planned 22/28-nanometer processes, with a monthly capacity reaching 55,000 wafers. This project has received commitments of support from the Japanese government, with an expected subsidy of approximately JPY 476 billion.

It was previously rumored that one of the shareholders of JASM, Sony Semiconductor, was urged by its customer, Apple, to expedite the production of image sensors (CIS) at the Kumamoto plant. Consequently, trial production began even before the opening of the Kumamoto plant. However, TSMC responded that the production timeline remains according to plan and is scheduled to commence before the end of 2024.

Recently, TSMC announced a new project in collaboration with its Japanese partners Sony Semiconductor, Denso Corporation, and Toyota Motor Corporation to invest in JASM and construct a second fab, scheduled to commence operations by the end of 2027.

TSMC stated that in response to customer demand, construction of the second JASM fab in Japan is slated to begin by the end of 2024. The expansion of production capacity is also expected to optimize the overall cost structure and supply chain efficiency of JASM.

In the future, the two fabs under JASM will enable a total monthly production capacity of over 100,000 12-inch wafers, providing 40-nanometer, 22/28-nanometer, 12/16-nanometer, and 6/7-nanometer processes for automotive, industrial, consumer, and high-performance computing (HPC) applications.

Capacity planning may be adjusted according to customer demand, with the Kumamoto plant directly creating a total of over 3,400 high-tech job opportunities. Through the investment, TSMC, Sony Semiconductor, Denso Corporation, and Toyota Motor Corporation hold approximately 86.5%, 6.0%, 5.5%, and 2.0% of the JASM shares, respectively.

Dresden, Germany

In August 2023, TSMC, along with Robert Bosch GmbH, Infineon Technologies AG, and NXP Semiconductors N.V., jointly announced plans to invest in the European Semiconductor Manufacturing Company (ESMC) located in Dresden, Germany, to provide advanced semiconductor manufacturing services.

TSMC stated that the ESMC represents a significant step forward in the construction of a 12-inch fab to support the future capacity demands in the rapidly growing automotive and industrial markets. The final investment decision is subject to confirmation of government subsidies.

This project is developed within the framework of the European Chips Act. Following approval by regulatory authorities and meeting other conditions, TSMC will hold a 70% stake in the joint venture, while Bosch, Infineon, and NXP will each hold a 10% stake. The fab will be operated by TSMC.

TSMC emphasized that the fab planned for this project is expected to utilize TSMC’s 28/22-nanometer Complementary Metal-Oxide-Semiconductor (CMOS) technology and 16/12-nanometer FinFET processes, with a monthly capacity of approximately 40,000 12-inch wafers.

Through advanced FinFET technology, the aim is to further strengthen the semiconductor manufacturing ecosystem in Europe and create approximately 2,000 direct high-tech job opportunities. ESMC aims to commence construction of the fab in the second half of 2024, with production slated to begin by the end of 2027.

Continuing Advancements in Advanced Processes in Taiwan

In addition to its overseas expansions, TSMC continues to advance its most cutting-edge processes and advanced packaging technologies in Taiwan.

Given the strong demand for N3 process technology over the years, TSMC is expanding the N3 process capacity at its Tainan Science Park. Additionally, in preparation for the commencement of mass production of N2 process technology in 2025, TSMC plans to establish multi-stage N2 process technology capacity in the science parks of Hsinchu and Kaohsiung.

In Hsinchu’s Baoshan area, the first phase has been completed, and TSMC’s Global R&D Center has been in use since 2023. Baoshan Phase Two will serve as the base for TSMC’s N2 process technology.

Additionally, TSMC plans to construct two 2-nanometer advanced process fabs in Kaohsiung. The related land pollution remediation projects are expected to be completed by the end of 2024.

Finally, regarding the urban planning amendment for the expansion of the Central Taiwan Science Park Phase II, which concerns TSMC’s layout for constructing 2-nanometer fabs, TSMC also indicated that the review progress by the Taichung Science Park Administration is proceeding as scheduled.

This development will allow the land in the Central Taiwan Science Park to be handed over to TSMC for use as early as 2024, enabling subsequent commencement of the construction of the fabs.

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(Photo credit: Intel)

Please note that this article cites information from TechNews.

2024-02-23

[News] SK Hynix Announces Complete Sales of HBM for the Year, Memory Market Poised for Recovery

South Korean memory giant SK Hynix has confirmed record-breaking sales of High Bandwidth Memory (HBM) over the past few months, driving profitability in the fourth quarter and predicting an industry-wide recovery.

According to Wccftech, SK Hynix Vice President Kim Ki-tae stated on February 21st that the demand for HBM, as an AI memory solution, is experiencing explosive growth as generative AI services become increasingly diverse and continue to evolve.

The report has cited insights from Kim Ki-tae, who stated, “HBM, with its high-performance and high-capacity characteristics, is a monumental product that shakes the conventional wisdom that memory semiconductors are only a part of the overall system. ”

Kim Ki-tae also mentioned that despite ongoing external uncertainties, the memory market is expected to gradually warm up in 2024. This is attributed to the recovery in product demand from global tech giants.

Moreover, AI devices such as PCs or smartphones are expected to increase the demand for artificial intelligence. This surge is anticipated to boost the sales of HBM3E and potentially drive up the demand for products like DDR5 and LPDDR5T.

Kim Ki-tae emphasized that their HBM products have already sold out for this year. Although it’s just the beginning of 2024, the company has already begun gearing up for 2025.

SK Hynix Plans to Establish Advanced Packaging Plant in the US

SK Hynix is reportedly set to establish an advanced packaging plant in Indiana, with the US government aiming to reduce dependence on advanced chips from Taiwan.

As per the Financial Times on February 1st, citing unnamed sources, SK Hynix’s rumored new packaging facility in Indiana may specialize in 3D stacking processes to produce HBM, which will also be integrated into NVIDIA’s GPUs.

Currently, SK Hynix produces HBM in South Korea and then ships it to Taiwan for integration into NVIDIA GPUs by TSMC.

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(Photo credit: SK Hynix)

Please note that this article cites information from Wccftech and The Financial Times.

2024-02-23

[News] UMC Seamlessly Integrates Key 12-Nanometer Technology as Intel Joins Forces

As Intel’s January announced the collaboration with UMC on the 12-nanometer process platform, UMC’s Co-General Manager, Jason Wang, led a team to support Intel’s IFS event.

Cited by Commercial Times in its report, Wang emphasized that UMC’s existing customers would have more production location options and benefit from the platform strategy. UMC will seamlessly transition from the 28/22-nanometer to the critical 12-nanometer.

Followed by joint interviews to share insights into the future strategies of both parties, Wang stated that in the face of rapid changes and challenges in the external environment, industries need to strengthen their cooperative relationships and seize opportunities for collaboration.

Intel and UMC announced their collaboration at the end of January, focusing on the development of a shared platform for the 12-nanometer process. In the future, UMC will be able to expand its orders for the front-end of the 12-nanometer process, while Intel will secure orders for the 12-nanometer wafer manufacturing.

Jason Wang emphasized that UMC has a comprehensive solution for the 28/22-nanometer, with demand trending towards stability. However, due to past limitations in resource allocation , UMC has paused at the 14/16-nanometer. Advancing to more advanced processes is just a matter of timing.

Wang further stated that both parties will focus on creating customer value, breaking frameworks, and innovating in cooperation. The two companies complement each other’s strengths, accelerating the timeline for technological development and expanding their global footprint.

Wang revealed that Intel has already included UMC’s 12-nanometer process in its product roadmap and has begun deep collaboration. UMC has deployed personnel to oversee this, with Intel leveraging UMC’s know-how in management.

Additionally, the collaboration involves revenue sharing rather than the rumored licensing fees. They anticipate completing the Process Design Kit (PDK) by next year and achieving mass production by the end of 2026.

Overall, TrendForce views this alliance as a significant step. UMC brings its plentiful experience in mature processes, while Intel contributes its advanced technological prowess.

This partnership is not just about mutual benefits at the 10nm process level; it’s a watchpoint for potentially deeper and more extensive collaboration in their respective fields of expertise. In the dynamic world of semiconductor manufacturing, this Intel-UMC alliance is a fascinating development to keep an eye on.

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(Photo credit: Intel)

Please note that this article cites information from Commercial Times.

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