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2024-06-25

[News] Leading IC Packaging and Testing Services Provider ASE Expands Globally Amid AI Demand

On June 21, ASE Group announced that ASE Semiconductor will collaborate with Hongjing Construction to build a K28 plant in Kaohsiung. The project is expected to be completed in the fourth quarter of 2026 and will focus on end testing of advanced packaging processes, and high-performance computing for artificial intelligence (AI) chip.

ASE’s CFO Dong Hongsi introduced that for the K28 plant construction project, ASE Semiconductor will provide the land it held in Kaohsiung while Hung Ching Construction will provide fund support. The plant will have one basement level and seven above-ground floors. As to the rights and value distribution between the two parties, ASE Semiconductor and Hung Ching Construction will respectively hold a share of 22.24% and 77.76%. Upon completion, ASE Semiconductor or its subsidiaries will have the first purchase rights for Hung Ching Construction’s property ownership.

It was reported previously that as an important part of the company’s operational plans, ASE’s Kaohsiung plant had purchased land in Tashe for phased development in a bid to  address the demands for end testing of advanced packaging processes, AI chip high-performance computing, and heat dissipation needs. Phase one, the K27 plant, was completed in 2023, primarily setting up Flip Chip and IC testing production lines.

At a financial result briefing in February this year, ASE stated that to expand advanced packaging capacity, this year’s overall capital expenditure will increase by 40% to 50%, reaching a historical high. Of this, 65% will be allocated to packaging, especially advanced packaging projects, with over 60% used for packaging testing and 30% for electronic manufacturing services.

Moreover, ASE is optimistic about the potential of AI technology and expects AI revenue contributions to double to USD 500 million by the end of 2024 compared to 2023. AI-related revenue is expected to account for a single-digit percentage of the total ATM (Packaging and test) business this year, surpassing last year’s low single digit. And the industry anticipates that next year’s proportion could reach a high single-digit percentage.

Advanced packaging industry has been in high gear in recent years, and ASE has made significant investment in this area over the past two years. In February this year, Infineon and ASE announced that ASE would invest approximately TWD 2.1 billion to acquire Infineon’s two backend assembly and test plants in Philippines and South Korea. This acquisition aims to expand ASE’s  power chip module packaging & test and lead frame packaging for automotive and industrial automation applications, with the transaction expected to be completed by the end of 2Q24.

On January 19, ASE announced that its Malaysian subsidiary would invest MYR 69.696 million to acquire land use right in the Gardenia Tech Park in Penang, Malaysia to meet operational needs. Industry analysts believed this investment was primarily for expanding advanced packaging capacity. It was reported that ASE Semiconductor has been actively expanding its packaging and test capacity in Malaysia. In November 2022, its new factories 4 and 5 in Penang broke ground, with construction expected to be completed by 2025.

Additionally, in late December 2023, ASE Semiconductor announced that it had leased the 7th floors of both K21 and K22 buildings from ASE TEST in Kaohsiung’s Nanzi district to expand its packaging capacity. The industry believed that the intention was to increase its advanced packaging capacity for AI chip.

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(Photo credit: ASE Group)

Please note that this article cites information from WeChat account DRAMeXchange.

2024-06-24

[News] Broadcom Reportedly Developing 5nm AI Chip with ByteDance, Manufactured by TSMC

According to a report from Reuters, it’s rumored that ByteDance, the parent company of TikTok, is collaborating with American chip designer Broadcom to develop an advanced AI processor, which could provide ByteDance with a steady supply of high-end chips.

On June 24th, Reuters’ report cited sources, stating that the 5nm Application-Specific Integrated Circuit (ASIC) being developed by the two companies will comply with U.S. export control regulations and will be manufactured by TSMC.

Since the introduction of advanced chip export controls by Washington in 2022, no public announcements have been made regarding the development of 5nm or more advanced chips in collaboration between Chinese and American companies.

The sources cited by the same report indicate that ByteDance’s collaboration with existing partner Broadcom can help reduce procurement costs and ensure a stable supply of high-end chips. However, TSMC will not start manufacturing this new chip this year. According to Reuters citing other sources, although the two companies have already begun the design process, they have yet reached the tape-out stage, which signifies the completion of the design phase and readiness for manufacturing.

Securing a reliable source of AI chips is crucial for ByteDance’s algorithms. In addition to TikTok, the company operates numerous popular apps, including “Doubao,” an AI chatbot service similar to ChatGPT. The report further suggests that ByteDance stockpiled a significant number of NVIDIA chips, including A100, H100, A800, and H800, ahead of the initial round of U.S. sanctions. In 2023, ByteDance allocated USD 2 billion for purchasing NVIDIA chips.

Per another previous report from Reuters, it indicated that in response to U.S. sanctions, some Chinese AI chip manufacturers decided to downgrade their self-designed processors to avoid being cut off from TSMC’s foundry services. Reportedly, MetaX and Enflame entrusted downgraded chip design schematics to TSMC late last year to comply with U.S. regulations. These two leading Chinese AI chipmakers had previously claimed that their chips could rival NVIDIA’s GPUs in performance.

The downgraded AI chips designed by NVIDIA specifically for the Chinese market, including the most advanced model “H20,” reportedly received a lackluster initial market response. Due to abundant supply and forced price reductions, currently, the H20 is reportedly cheaper than competing chips from Huawei. The chip is reportedly to be sold at approximately 100,000 yuan per unit, while Huawei 910B sold at over 120,000 yuan per unit.

A previous report by The Information also indicated that major tech companies such as Alibaba, Baidu, ByteDance, and Tencent have been instructed to reduce their spending on foreign-made chips like NVIDIA’s.

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(Photo credit: Broadcom)

Please note that this article cites information from Reuters and The Information.

2024-06-24

[News] SK Hynix’s 5-layer 3D DRAM Yield Reportedly Hits 56.1%

According to a report by Korean media outlet Business Korea, SK Hynix recently shared its latest breakthrough on its 3D DRAM at VLSI 2024 last week, announcing that the manufacturing yield of its 5-layer stacked 3D DRAM has reached 56.1%.

This means that out of roughly 1,000 3D DRAM units manufactured on a single test wafer, about 561 functional devices were successfully manufactured, the report further explains. The experimental 3D DRAM exhibits characteristics similar to the currently used 2D DRAM, marking the first time SK Hynix has disclosed specific numbers and characteristics of its 3D DRAM development.

However, SK Hynix also noted that while 3D DRAM holds great potential, a significant amount of development is still required before it can be commercialized. The memory giant also reportedly pointed out that unlike the stable operation of 2D DRAM, 3D DRAM exhibits unstable performance characteristics, and stacking 32 to 192 layers of memory cells is necessary for widespread use.

3D DRAM is also a key development area for other major memory manufacturers like Samsung Electronics and Micron. Samsung Electronics has successfully stacked 3D DRAM up to 16 layers and plans to mass-produce 3D DRAM around 2030. Micron currently holds 30 patents related to 3D DRAM, and if there are breakthroughs in 3D DRAM technology, it could produce better DRAM products than existing ones without the need for EUV equipment.

The DRAM market remains highly concentrated, currently dominated by key players such as Samsung Electronics, SK Hynix, and Micron Technology, collectively holding over 96% of the entire market share.

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(Photo credit: SK Hynix)

Please note that this article cites information from Business Korea.
2024-06-24

[News] Samsung’s 3nm Yield Reportedly Below 20%, Struggling for Mass Production

According to a report from Korean media outlet ZDNet Korea, the yield rate for Samsung Electronics’ latest Exynos 2500 processor has improved to slightly below 20% from single digits in the first quarter. However, the current yield rate is still said to be falling short of mass production standards. It remains uncertain whether it can be used in the flagship Galaxy S25 series smartphones in the future.

The report further indicates that this yield rate is still insufficient for mass production, which typically requires yields to be increased to over 60%. Therefore, Samsung Electronics’ System LSI department reportedly plans to work on improving the yield rate of the Exynos 2500 processor in the second half of this year.

The report states that it is still uncertain whether the Exynos 2500 processor can be used in the future Galaxy S25 series flagship smartphones. Since there is still considerable time before the official launch of the Galaxy S25 series, Samsung hopes to improve the yield rate of the Exynos 2500 processor to 60% by October this year.

On the other hand, TSMC is overwhelmed with 3nm orders, with major companies like Apple, NVIDIA, AMD, Qualcomm, Intel, and MediaTek all utilizing TSMC’s 3nm process. Per a report from TechNews, during TSMC’s technology forum on May 23, the 3nm production capacity this year has more than tripled compared to last year, but this is actually still not enough, so efforts are still being made to meet customer demand.

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(Photo credit: Samsung)

Please note that this article cites information from ZDNet Korea and TechNews.

2024-06-24

[News] TSMC Reportedly Secures Another AI Opportunity, Winning Order from SK Hynix

According to a report by the Economic Daily News, TSMC has secured another AI business opportunity. Following its exclusive contract manufacturing of AI chips for tech giants such as NVIDIA and AMD, TSMC, in collaboration with its subsidiary, the ASIC design service provider Global Unichip Corporation (GUC), has reportedly made significant progress in producing essential peripheral components for AI servers, specifically high-bandwidth memory (HBM). Together, they have secured a major order for the foundational base die chips of next-generation HBM4.

TSMC and GUC typically do not comment on order details. SK Hynix, on the other hand,  has clarified in a press release to Bloomberg that it has not signed a contract with GUC for its next-generation AI memory chips, according to the Economic Daily News.

Industry sources cited by the report point out that the strong demand for AI is not only making high-performance computing (HPC) related chips highly sought after, but also driving robust demand for HBM, creating new market opportunities. This surge in demand has attracted major memory manufacturers such as SK Hynix, Samsung, and Micron to actively invest. Under the influence of AI engines, the current production capacity for HBM3 and HBM3e is in a state of supply shortage.

As AI chip manufacturing advances to the 3nm generation next year, the existing HBM3 and HBM3e, limited by capacity and speed constraints, may prevent the new generation of AI chips from reaching their maximum computational power. Consequently, the three major memory manufacturers are unanimously increasing their capital expenditures and starting to invest in the development of next-generation HBM4 products, aiming for mass production by the end of 2025 and large-scale shipments by 2026.

While memory manufacturers are delving into the research and development of next-generation HBM4, the semiconductor standardization organization JEDEC Solid State Technology Association is also busy establishing new standards related to HBM4. It’s also rumored that JEDEC will relax the stacking height limit for HBM4 to 775 micrometers, hinting that the previously required advanced packaging technology using hybrid bonding can be postponed until the next generation of HBM specifications.

Industry sources cited by the report also suggest that the most significant change in HBM4, besides increasing the stacking height to 16 layers of DRAM, will be the addition of a logic IC at the base to enhance bandwidth transmission speed. This logic IC, known as the base die, is expected to be the major innovation in the new generation of HBM4 and possibly a reason for JEDEC’s relaxation of the stacking height limitation.

On the other hand, SK Hynix has announced its collaboration with TSMC to advance HBM4 and capture opportunities in advanced packaging. Industry sources also indicate that GUC has successfully secured the critical design order for SK Hynix’s HBM4 base die.

The design is expected to be finalized as early as next year, with production to be carried out using TSMC’s 12nm and 5nm processes, depending on whether high performance or low power consumption is prioritized.

Reportedly, it’s suggested that SK Hynix’s decision to entrust the base die chip orders to GUC and TSMC is primarily because TSMC currently dominates over 90% of the CoWoS advanced packaging market used in HPC chips.

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(Photo credit: TSMC)

Please note that this article cites information from Economic Daily News.

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