Recent reports have suggested that UMC’s new facility in Singapore is set to be completed by mid-2024, with initial production expected to commence in early 2025.

UMC has announced that, in response to the demand for capacity expansion, the board of directors has approved a capital expenditure execution plan of USD 39.8 million. The first phase of the new facility is planned to have a monthly production capacity of 30,000 wafers, offering 22/28nm processes, with a total investment of USD 5 billion.

Semiconductor Companies Target Singapore

Influenced by complex international situations and other factors, the global semiconductor supply chain is undergoing a shift, with high expectations placed on the Southeast Asian region, particularly Singapore.

In the wafer manufacturing sector, IDM companies like Micron, Infineon, NXP Semiconductors, STMicroelectronics, and others, along with foundry enterprises like GlobalFoundries, UMC, and Vanguard International Semiconductor(VIS) are investing in building facilities in Singapore.

In 2010, GlobalFoundries acquired Singapore’s Chartered Semiconductor Manufacturing Company and took over its fab. In September 2023, GlobalFoundries announced the official launch of its USD 4 billion investment in expanding the manufacturing plant in Singapore, further expanding its global production capacity.

The expanded fab is projected to produce an additional 450,000 300mm wafers annually, raising GlobalFoundries’ total production capacity in Singapore to approximately 1.5 million 300mm wafers per year.

UMC has been operating its 12-inch fab in Singapore for over 20 years. In February 2022, UMC announced that its board of directors approved plans to expand a new advanced fab in the Fab12i campus in Singapore.

At that time, UMC anticipated that the new facility would commence production at the end of 2024. The latest updates indicate that the new facility is expected to begin production in early 2025.

VIS currently operates an 8-inch fab in Singapore. In October 2023, media reports indicated that VIS plans to establish its first 12-inch fab in Singapore. This facility is primarily intended to meet the demand for automotive chips. The investment for this project is estimated to be at least USD 2 billion, and it is anticipated to produce 28nm chips.

Continuous Expansion in Foundry Capacity

Despite the sluggish demand in the consumer electronics market, the pace of expansion for foundries remains unaffected.

Covering 2022 to 2024, the World Fab Forecast report has shown that the global semiconductor industry plans to begin operation of 82 new volume fabs, including 11 projects in 2023 and 42 projects in 2024 spanning wafer sizes ranging from 300mm to 100mm.

Among the newly added capacity, China is expected to experience rapid growth, securing the top position, followed by Taiwan, maintaining the second position. Subsequently, the rankings include South Korea, Japan, the Americas, Europe, and Southeast Asia.

According to TrendForce‘s statistics, the number of foundries in China has reached 44 and is expected to increase by 32 in the future, mainly focusing on mature nodes.

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• [News] UMC, VIS, PSMC Cut Prices for Mature Process Wafers to Boost Production

(Photo credit: UMC)

In the intense battle of AI chips between NVIDIA and AMD this year, AMD’s MI300 has entered mass production and shipment 1H24, gaining positive adoption from clients. In response, NVIDIA is gearing up to launch upgraded AI chips. TSMC emerges as the big winner by securing orders from both NVIDIA and AMD.

Industry sources have revealed optimism as NVIDIA’s AI chip shipment momentum is expected to reach around 3 million units this year, representing multiple growth compared to 2023.

With the production ramp-up of the AMD MI300 series chips, the total number of AI high-performance computing chips from NVIDIA and AMD for TSMC in 2024 is anticipated to reach 3.5 million units. This boost in demand is expected to contribute to the utilization rate of TSMC’s advanced nodes.

According to a report from the Economic Daily News, TSMC has not commented on rumors regarding customers and orders.

Industry sources have further noted that the global AI boom ignited in 2023, and 2024 continues to be a focal point for the industry. A notable shift from 2023 is that NVIDIA, which has traditionally dominated the field of high-performance computing (HPC) in AI, is now facing a challenge from AMD’s MI300 series products, which have begun shipping, intensifying competition for market share.

Reportedly, the AMD MI300A series products have commenced mass production and shipment this quarter. The central processing unit (CPU) and graphics processing unit (GPU) tile are manufactured using TSMC’s 5nm process, while the IO tile use TSMC’s 6nm process.

These chips are integrated through TSMC’s new System-on-Integrated-Chip (SoIC) and Chip-on-Wafer-on-Substrate (CoWoS) advanced packaging technologies. Additionally, AMD’s MI300X, which does not integrate the CPU, is also shipping simultaneously.

Compared to NVIDIA’s GH200, which integrates CPU and GPU, and the H200, focusing solely on GPU computation, AMD’s new AI chip performance exceeds expectations. It offers a lower price and a high cost-performance advantage, attracting adoption by ODMs.

In response to strong competition from AMD, NVIDIA is upgrading its product line. Apart from its high-demand H200 and GH200, NVIDIA is expected to launch new products such as B100 and GB200, utilizing TSMC’s 3nm process, by the end of the year.

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• [News] Nvidia vs. AMD, the Expensive Duel as Two Major Buyers Opt for AMD’s Latest AI GPU
• [News] TSMC’s CoWoS Demand Surges from NVIDIA, Apple, AMD, Broadcom, Marvell, Monthly Capacity Up 120% in 2024

(Photo credit: NVIDIA)

In 2024, TSMC’s global expansion continues at full throttle, with industry reports suggesting a significant breakthrough in the establishment of a 3-nanometer advanced process manufacturing facility in Japan. Osaka is considered the most likely location for TSMC’s third plant in Japan.

TSMC has stated that it is actively evaluating suitable sites for construction and is not ruling out any possibilities.

According to Taiwan’s Commercial Times, following the announcement of Chairman Mark Liu’s retirement, speculation arises that President CC Wei will shoulder the responsibility of overseas expansion. With domestic 1.4 and 2-nanometer plans settled, and 3-nanometer production achieving high yields, developments in the U.S., Japan, Germany, and elsewhere are progressing rapidly.

Furthermore, sources in the supply chain reveal that TSMC has design centers in Osaka and Yokohama, making Osaka the front-runner for TSMC’s third plant in Japan.

Market speculations suggest that Japan will be a focal point for TSMC’s overseas expansion, with advanced processes and packaging potentially making significant strides in the country. Supply chain insiders point out that TSMC’s two R&D centers in Japan specializing in advanced process research and supporting design services for Japanese IDM customers. The advantageous conditions in Osaka are seen as superior to those in Yokohama.

TSMC’s subsidiary, Japan Advanced Semiconductor Manufacturing (JASM), is constructing a factory in Kikuyo Town, Kumamoto Prefecture, Japan, set to open on February 24 and expected to commence mass production by the end of 2024.

The second factory in Kumamoto is also planned to start operations in April. As for TSMC’s Taiwan facilities in advanced processes, the estimation is for 2-nanometer production to begin in Baoshan and Kaohsiung, gradually reaching mass production by 2026.

(Image: TSMC)

TSMC operates at full capacity, AMD aims for AI chips reportedly seeks CoWoS-like supply chain.

In 2023, NVIDIA led the global AI chip development, and in 2024, the global demand for AI chips is expected to continue to surge due to the expansion of end-user applications such as PCs and mobile phones.

Meanwhile, AMD has not stopped in AI chip development either, with the expected MI300 products poised to heat up the global AI business opportunities. However, the key to supply lies in advanced packaging, and AMD will seek outsourced semiconductor assembly and test (OSAT) service providers to offer support similar to CoWoS.

According to Taiwan’s Commercial Times, TSMC’s CoWoS capacity has long been fully loaded, and even if it expands production this year, it will mainly be reserved for NVIDIA. Market sources pointed out that TSMC will continue to increase CoWoS capacity to support AMD’s demand, but it takes six to nine months to establish a new production line. Therefore, it is expected that AMD will seek cooperation with other companies with CoWoS-like packaging capabilities. ASE, Amkor, Powertech, and KYEC are the first batch of potential partners.

TSMC has been outsourcing part of its CoWoS operations for some time, mainly targeting small-volume, high-performance chips. TSMC maintains in-house production of the CoW, while the back-end WoS is handed over to test and assembly houses to improve production efficiency and flexibility. This model will continue in the future 3D IC generation.

ASE and Amkor both received WoS orders last year. ASE has strengthened the development of advanced packaging technology and has a complete solution for the entire CoWoS process. ASE previously stated that it sees the strong potential of AI and expects related revenue to double in 2024.

According to reports citing market sources, the monthly production capacity of the ASE Group’s 2.5D packaging is about 2,000 to 2,500 pieces. Some experts believe that test and assembly houses will maintain the business model of TSMC or UMC providing the interposer. Therefore, in 2024, a significant increase in CoWoS production capacity is expected.

KYEC is responsible for testing Nvidia AI chips and is expected to benefit from AMD’s search for CoWoS-like capacity. Nvidia is currently KYEC’s second-largest customer.

KYEC’s testing of Nvidia A100 and H100 chips is mainly in the final test (FT), with a market share of up to 70%. KYEC provides comprehensive IC burn-in testing, has self-developed burn-in equipment, and has been in the industry for more than a decade, accumulating many patents and technologies.

AMD stated at the end of 2023 that AI chip revenue could reach US$2 billion in 2024, excluding other HPC chips. AMD pointed out that the annual compound growth rate of the AI chip market in the next four years will reach 70%, and it is estimated that it will reach US$400 billion in 2027.

(Image: AMD)

Japanese semiconductor equipment manufacturer Tokyo Electron Limited (TEL) is reportedly set to increase the starting monthly salary for new hires by approximately 40%, breaking the JPY 300,000 barrier for the first time (approximately USD 2,121). This move is expected to align the salary level with international counterparts to attract talent.

According to the report from Nikkei Asia, TEL has been consistently raising salaries and bonuses due to its strong business performance. The company will raise the salary for all new hires by JPY 85,500.

Starting in April 2024, the monthly salary for university graduates joining the company will reach JPY 304,800 (USD 2,161), while those with higher qualifications can receive JPY 320,000. This marks the first salary increase for new employees at TEL in seven years.

As per the survey conducted by the Japan’s National Personnel Authority in the spring of 2023, Japanese private companies offer an average starting salary of around JPY 210,000 (approximately USD 1,484) for university graduates, with those holding higher degrees receiving around JPY 230,000. On the other hand, TEL’s financial statement reveals that the company’s average annual salary as of March 2023 is JPY 13.98 million.

Japan has seen a series of significant investments in the semiconductor industry, including TSMC’s entry into Kumamoto, Kyushu. Semiconductor manufacturers are offering high salaries to attract skilled workers, and this trend is prompting chip equipment suppliers to follow suit.

TEL plans to hire approximately 400 new graduates in the spring, an increase of 50 from the previous year, and envisions increasing the number of new employees to 500 within the next few years.

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• [News] Examining Japan through Semiconductor Foundries: Goals of TSMC’s and PSMC’s New Plants
• [News] Global Chip Equipment Sales Plummet by 11%, Taiwan Nearly Halves, China Breaks Records

(Photo credit: TEL)