A few weeks ago, Intel is said to be seeking assistance from the U.S. government, as CEO Pat Gelsinger reportedly turned to Commerce Secretary Gina Raimondo to emphasize the significance of U.S. chip manufacturing. Now here’s the latest development: according to a report by Bloomberg, the U.S. House has passed a bill that exempts certain semiconductor manufacturing projects from federal permitting requirements, which is expected to benefit companies like Intel and TSMC.

According to Bloomberg, the move aims to alleviate concerns that environmental reviews and legal challenges could slow the construction of domestic chip plants.

The report notes that spurred by incentives from the 2022 Chips and Science Act, chipmakers have committed around USD 400 billion to build factories in the US. Companies such as Intel and TSMC are set to receive billions in funding from the act to support major projects nationwide. Other tech giants, including Micron, Samsung, SK hynix and GlobalFoundries, are also getting billions in U.S. subsidies.

However, many of the projects are facing delays. For instance, Intel’s Fab 52 and Fab 62 in Arizona are previously scheduled to be completed in 2024. However, the schedule may be reportedly delayed a bit, as the fabs are likely to begin operations later this year or in early 2025. The USD 20 billion project in Ohio, on the other hand, may be facing larger obstacles as Intel has delayed the plan after 2026 due to market downturns and delays in U.S. subsidies.

The pending awards, according to Bloomberg, currently require semiconductor construction sites to undergo National Environmental Policy Act (NEPA) reviews, a process that could last months or even years. Now it would be streamlined by the legislation passed on Monday.

The bill specifies three criteria for Chips Act-funded projects to qualify for a NEPA exemption, Bloomberg states.

First, projects must begin construction before the end of this year, a requirement that most major sites should be able to meet, except for a Micron’s project in New York, which has not yet met permitting requirements under the Clean Water Act and various state regulations, Bloomberg explains.

Second, projects that receive only loans—not direct grant funding—would be exempt from NEPA reviews, although this provision currently does not apply to any Chips Act incentive packages.

Finally, facilities would qualify for an exemption if grant funding constitutes less than 10% of project costs, a decrease from the previous threshold of 15% in an earlier version of the legislation, the report notes.

It is worth noting that the proposal, waiting for Biden’s nod, illustrates the dilemma the U.S. government is currently facing. For one thing, the U.S. authority is eager to expedite the construction of chip factories to reduce reliance on Asia, particularly Taiwan. On the other hand, the White House has set ambitious climate goals, and building semiconductor plants could complicate efforts to achieve these targets, according to Bloomberg.

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• [News] Intel Reportedly Sought Commerce Secretary Raimondo’s Help over U.S. Reliance on TSMC

(Photo credit: Intel)

In mid-August, TSMC had signed a contract with panel manufacturer Innolux to purchase its plant and facilities located in southern Taiwan, eyeing to further expand its advanced packaging capacity. According to a report by China Times, the fab, designated as the AP8 facility, is expected to start production in the second half of 2025.

More importantly, the fab will not only provide foundry services but also the eagerly needed capacity for advanced 3D Chip on Wafer on Substrate (CoWoS) IC packaging services, the report notes.

The move will be critical for TSMC to meet the surging demand for the advanced packaging capacity for AI servers, according to the report. Its future capacity will reportedly be nine times that of AP6, TSMC’s advanced packaging fab in Zhunan.

Outbidding Micron, TSMC secured the plant with a transaction value of NTD 17.14 billion, which is much lower than the rumored market price of over NTD 20 billion. Citing sources from the supply chain, the report suggests that the main reason TSMC acquired Innolux’s fab was to bypass the time-consuming environmental assessment process.

Unlike the advanced packaging fab in Chiayi, central Taiwan, which has to be started from scratch, the newly-acquired facility only requires internal modifications. Within a year, TSMC can finish the job of equipment installation, and begin the production afterwards.

Sources cited by the report note that orders for related equipment manufacturing are already underway, with deliveries expected starting in April next year. While the process of trial production may take an additional quarter, the AP8 facility is expected to start production in the second half of 2025.

During an investor conference in mid-April, TSMC Chairman C.C. Wei stated that he anticipates the company’s CoWoS capacity to more than double in both 2024 and 2025. He noted later in July that TSMC targets to reach the balance between supply and demand by 2026.

According to analysts cited by the report, TSMC’s CoWoS capacity, though still remains in short supply, could exceed 32,000 wafers per month by the end of this year. With the additional outsourced capacity, the total CoWoS capacity may approach 40,000 wafers per month. By the end of 2025, TSMC’s CoWoS monthly capacity is projected to reach around 70,000 wafers.

Citing remarks by Jun He, TSMC Vice President of Operations and Advanced Packaging Technology and Service, TSMC’s CoWoS capacity is expected to achieve a compound annual growth rate (CAGR) of over 50% from 2022 to 2026. The foundry giant will also accelerate its pace on constructing fabs, shortening the typical 3-to-5-year timeline to within 2 years to meet customer demand.

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• [News] TSMC Took Another Step in Advanced Process Expansion

(Photo credit: TSMC)

The deployment of 8-inch silicon carbide (SiC) is picking up pace, and many new developments have emerged recently.

On September 17, Japan’s NGK Insulators Ltd. (NGK) announced on its official website that it had successfully produced 8-inch SiC wafers. The company plans to showcase these wafers, along with related research results, at ICSCRM 2024 in the U.S. later this month.

Reportedly, Resonac has achieved 8-inch SiC epitaxial wafers of the same quality as its 6-inch products. Currently, the company is working to reduce costs by improving production efficiency, and sample evaluations have reached the final stages of commercialization.

Once the cost advantage surpasses that of the 6-inch products, Resonac is expected to transition to producing 8-inch products. Besides mass production of 8-inch SiC epitaxial wafers, Resonac plans to start mass production of 8-inch SiC substrates in 2025.

Additionally, Onsemi is set to accelerate the production of 8-inch SiC wafers, with capacity adjustments based on market demand expected to start in 2025. The company plans to launch its 8-inch SiC wafers later this year and begin production in 2025. Onsemi’s president and CEO, Hassane El-Khoury, stated that the company is proceeding as planned and will complete the certification of 8-inch wafers this year, covering the entire process from substrate to wafer fab.

On September 9, Wolfspeed launched a 2300V bottomless SiC power module for 1500V DC bus applications, utilizing its most advanced 8-inch SiC wafer technology. This product aims to drive development in renewable energy, energy storage, and high-power fast charging by improving efficiency, durability, reliability, and scalability.

In China, Sanan Optoelectronics’ Chongqing Sanan project (an 8-inch SiC substrate support factory) has successfully lit up its production line. The substrate plant built by Sanan Optoelectronics using its own SiC substrate technology, is operated by its wholly-owned subsidiary Chongqing Sanan Semiconductor, with a total investment of approximately 7 billion yuan. The plant plans to produce 480,000 8-inch SiC substrates annually.

SICC’s 8-inch conductive SiC wafers have recently achieved mass production, and products are being continuously delivered. Additionally, in July, SICC announced a plan to raise RMB 300million to invest in its 8-inch automotive-grade SiC substrate technology improvement project.

Industry Outlook: 8-inch Silicon Carbide on the Rise

Looking ahead, TrendForce noted that, SiC as a crucial development in future power electronics is rapidly penetrating markets such as automotive and renewable energy, where power density and efficiency are paramount. Over the next few years, overall market demand is expected to maintain growth, with predictions that the global SiC power device market could reach USD 9.17 billion by 2028.

The SiC industry chain mainly consists of substrates, epitaxy, devices, and applications. Among these, SiC substrate manufacturing has the highest technical barriers and value, making it the core part of advancing large-scale SiC industrialization. The production process includes crystal growth, slicing, grinding, and polishing.

In terms of size trends, “the larger the size, the lower the unit chip cost” is a widely recognized cost-reduction path in SiC substrate development. According to Tankeblue data, upgrading from 4-inch to 6-inch can reduce unit costs by 50%, and moving from 6-inch to 8-inch could further cut costs by 35%.

Industry experts believe that although 6-inch wafers currently dominate the SiC market, transitioning to 8-inch is an inevitable trend. It is expected that from 2026 to 2027, current 6-inch SiC products will be replaced by 8-inch ones.

According to TrendForce, the market share of 8-inch SiC products is currently less than 2%, but it is forecasted to grow to around 15% by 2026.

SiC Substrate Prices Fall: Could It Be a Positive Sign?

Market reports suggest that the price of mainstream 6-inch SiC substrates in China has dropped by nearly 30%, now referencing international prices of $750-$800 per wafer.
TrendForce have pointed out that with the entry of Chinese companies into the SiC market, the price drop for SiC substrates has accelerated.

SICC Chairman commented that SiC substrate prices will fall due to technological advancements and economies of scale, leading to lower costs. Additionally, the high price of SiC substrates compared to silicon substrates has hindered wider adoption, and price reductions will help expand downstream applications, pushing SiC into broader use.

(Photo credit: Wolfspeed)

Rumors are going around the market about Intel’s next move, as names of big techs, such as Qualcomm, have been brought up as potential buyers. On the other hand, U.S.-based asset management firm Apollo is also said to be showing interest in making an equity-like investment worth up to USD 5 billion in Intel.

However, are the rumors making sense? What would be the wisest decision for Intel to make? Here’s a roundup of the semiconductor giant’s core businesses, and a quick analysis of its next steps.

Intel Might Be Working on Restructuring and Adjustments Months ago

Before Intel’s formal announcement of delaying its German project for two years, the company has actually been carrying out plans for restructuring discreetly and adjusting its strategy in the meantime, which can date back to months ago.

This could be further echoed with Intel’s decision in June to sell a 49% equity interest related to the Fab 34 in Ireland to Apollo. Then, in July, after reporting a loss of USD 7 billion in its manufacturing business for 2023, Intel stated that its investment in France and Italy could not be realized for the time being, and suspended relevant investment plans for chip plants and R&D centers.

Five Core Businesses to Watch: x86 Unlikely to be Sold

Still, the struggling giant has five core businesses, which consists of the following segments: x86 CPUs for the consumer and data center markets, the networking business, Intel Foundry Services (IFS), FPGA unit Altera and Mobileye for automotive driver-assist systems.

Among these, x86 CPU remains the most profitable segment, which is also Intel’s core strength. As the revenue contribution, gross margin, and operating margin of the product line stay healthy, Intel is unlikely to sell the segment in the current scenario.

On the other hand, though Intel has denied the plan to divest a majority stake in Mobileye last week, the self-driving company, which listed on Nasdaq in 2022, would be one of the easiest target for Intel to handle. Industry insiders believe that companies like Japanese semiconductor firm Renesas, U.S. chip giant Qualcomm, Taiwan-based MediaTek, or those aiming to enter the automotive electronics sector could be potential buyers.

As for Altera’s FPGA unit, which also previously denied rumors of being for sale, industry experts suggest that AMD could still be a potential buyer. Acquiring Altera would allow the U.S. chip giant to expand its FPGA product lineup, effectively integrating it with its existing portfolio.

In addition, the networking division could also be sold as a standalone entity, which might be easier for Intel to execute.

What is Qualcomm Eyeing for?                       

The latest reports by The Wall Street Journal and Bloomberg indicate that Qualcomm has reached out to Intel regarding a potential acquisition offer, which would rank as one of the largest-ever technology mergers if the deal were to take place.

However, if Qualcomm were to pursue the x86 business or the entire Intel, it would be a significant financial burden for the U.S. chip maker. Moreover, as a chip design company, Qualcomm would lack the expertise to manage the IFS foundry, while the sector still suffered from significant losses.

Additionally, the deal would require scrutiny from antitrust authorities in various countries, which could be particularly challenging in China.

Therefore, a more feasible option for Qualcomm would be to acquire Mobileye, as the company is already involved in automotive ADAS and infotainment ICs. Acquiring the networking division would be another reasonable choice.

What would be the next page for Intel? To sum up, the 56-year-old semiconductor giant still has solid products, such as the x86 CPUs. Its main issue lies in the slightly deviated strategic direction and execution over the past few years, particularly as it positions itself to compete with TSMC in the most advanced nodes. By addressing these missteps and making proper arrangements afterwards, the company still holds significant value.

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• [News] Qualcomm’s Potential Takeover of Intel Might Have Minimal Impact on TSMC, But Not MediaTek
• [News] Update on Potential Investors of Intel: Apollo Rumored in; Broadcom Temporarily out

(Photo credit: Intel)

Taiwan’s Commercial Times, citing industry sources, reports that Samsung’s memory and smartphone divisions are considering outsourcing orders to Taiwanese firms, including TSMC and MediaTek.

Competition in the global semiconductor industry remains fierce. In the foundry sector, TrendForce data shows TSMC retained its top spot in Q2, with quarterly revenue of $20.82 billion and a 62.3% market share. Samsung, ranked second, saw its quarterly revenue grow 14.2% to $3.83 billion, with an 11.5% market share.

The Commercial Times reports that Samsung’s major business lines have recently underperformed expectations, with its foundry and memory divisions facing stiff competition from TSMC and SK Hynix. Its smartphone business has also been plagued by the “green line issue.” To reverse the tide, Samsung is looking to collaborate with Taiwanese manufacturers.

According to Commercial Times, due to yield issues with the Exynos 2500, it remains unclear whether the chip will power Samsung’s smartphones. In addition to its partnership with Qualcomm, Samsung is reportedly in talks with MediaTek to use its Dimensity chips for next year’s flagship S-series phones as a second source.

Benefiting from this shift, Novatek is reportedly well-positioned to gain orders from Samsung, thanks to its competitive pricing. Novatek, which already supplies Apple with iPhone OLED DDIC chips, has proven its technical capabilities to major global brands and could become a cost-saving option for Samsung.

Meanwhile, following Micron’s establishment of a DRAM facility in Taiwan, SK Hynix has also expressed interest in deepening its collaboration with TSMC. Samsung’s memory business president, Jung Bae Lee, has signaled a willingness to explore future partnerships with TSMC. Industry insiders, cited by Commercial Times, note that if AI chips use ASIC paired with HBM, the base die will require advanced manufacturing, making TSMC the top choice for memory firms.

(Photo credit: Samsung)