TrendForce TrendForce Tech News Wed, 07 Feb 2024 07:15:57 +0000 en-US hourly 1 [News] US Allocates USD 39 Billion Subsidy to Semiconductor Industry for Establishing Plants Wed, 07 Feb 2024 07:15:57 +0000 TrendForce Continue reading ]]> [News] US Allocates USD 39 Billion Subsidy to Semiconductor Industry for Establishing Plants

US Commerce Secretary Gina Raimondo has announced on February 5th that the Commerce Department would distribute substantial subsidies to chipmakers investing in the US within the next two months. The subsidy recipients are expected to include companies like TSMC and Intel.

As per a report from Reuters, Raimondo discussed the progress of subsidies under the US CHIPS and Science Act. “We’re in the process of really complicated, challenging negotiations with these companies. In the next six to eight weeks, you will see several more announcements. That’s what we’re striving for,” she stated.

Raimondo did not specify which chipmakers she is negotiating with, but she mentioned in an interview cited by Reuters,”These are highly complex, first-of-their-kind facilities. The kind of facilities that TSMC, Samsung, Intel are proposing to do in the United States — these are new-generation investments — size, scale complexity that’s never been done before in this country.”

Last month, as per Bloomberg cited industry sources in a report, plans for the United States to announce substantial chip subsidies by the end of March are revealed, targeting companies such as TSMC and Intel. The US CHIPS and Science Act reportedly includes a USD 39 billion manufacturing subsidy, providing 15% of the total cost for each independent project. Each fab can receive up to USD 3 billion in subsidies, along with loans, loan guarantees, and tax exemptions.


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(Photo credit: TSMC)

Please note that this article cites information from ReutersBloomberg.

[News] SMIC’s Net Profit Halved Last Year, Faces Further Reductions This Year Wed, 07 Feb 2024 07:00:40 +0000 TrendForce Continue reading ]]> [News] SMIC’s Net Profit Halved Last Year, Faces Further Reductions This Year

China’s leading semiconductor foundry, SMIC International, announced its fourth-quarter financial results on February 6th. While the quarter’s revenue exceeded expectations, a significant drop in gross margin led to a sharp decrease in net profit by less than 50% to below USD 1 billion last year.

SMIC issued a warning, further revising down the gross margin for the first quarter of this year to around 10%, with single-digit figures at the lower end.

During the fourth quarter, SMIC International saw a revenue increase of over 3.5% to more than USD 1.678 billion, marking the only quarter of revenue growth last year. Net profit plummeted by 54.7% to nearly USD 175 million.

The gross margin of 16.4% was almost halved compared to the same period in 2022 and experienced a significant decline from the previous three quarters, reaching its lowest point of the year.

In the full year of 2023, SMIC International experienced a revenue decline of over 13% to USD 6.3 billion, with a net profit decrease of 50.4% to USD 900 million. The gross margin was approximately halved to 19.3%.

Regarding the decline in net profit, SMIC cited various factors including the industry downturn, weak market demand, high industry inventory, and fierce competition among peers, all contributing to reduced capacity utilization and decreased wafer shipment for the group.

Additionally, the group experienced a period of high investment during the financial reporting period, leading to increased depreciation compared to the previous year.

Looking ahead to the first quarter of this year, SMIC estimates a quarter-on-quarter revenue growth of up to 2%. For the first-quarter gross margin guidance, SMIC has provided a range of 9% to 11%, indicating a decrease of approximately 33% to 45% from the low point of 16.4% in the fourth quarter of last year.

SMIC also anticipates that, under the assumption of no significant changes, this year’s revenue growth will not be lower than the average of comparable peers, showing a mid-single-digit increase compared to last year. The capital expenditure scale is expected to remain roughly flat compared to last year.

The significant downward revision in gross margin guidance has drawn attention to SMIC’s strategic moves. According to a report by the Financial Times, SMIC is intensifying its collaboration with Huawei by establishing a new production line in Shanghai dedicated to producing chips for Huawei’s future flagship smartphones, focusing on the 5-nanometer process.

However, industry sources cited by the report have also indicated that SMIC’s prices for 5-nanometer and 7-nanometer processes are 40% to 50% higher than TSMC’s, and the yield less than one-third of TSMC’s.

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(Photo credit: SMIC)

Please note that this article cites information from Financial Times.

[Insights] Memory Spot Price Update: Limited DRAM Quotes, Weak NAND Flash Momentum Wed, 07 Feb 2024 03:33:07 +0000 TrendForce Continue reading ]]> [Insights] Memory Spot Price Update: Limited DRAM Quotes, Weak NAND Flash Momentum

According to the latest spot prices for memory from TrendForce, due to the Chinese New Year holiday, the spot market is experiencing a limited number of released quotes and very few transactions for DRAM. The trading momentum in the NAND Flash spot market has also not shown any improvement. Details are as follows:

DRAM Spot Market:

Chinese OEMs are winding down their operations due to the upcoming Lunar New Year holiday. As a result, the spot market is experiencing a limited number of released quotes and very few transactions. Sellers’ quotes continue to drive the spot price rally, but there is not much actual demand. Although DRAM suppliers are withholding the amount of products going into the spot market, this has a limited effect in terms of sustaining the rally. The average spot price of mainstream chips (i.e., DDR4 1Gx8 2666MT/s) rose by 0.52% from US$1.922 last week to US$1.932 this week.

NAND Flash Spot Market:

Transaction momentum is not yet revitalized from the spot market, with market activities carrying on from that of last week under the absence of buy orders for retail NAND Flash products. Module houses are currently hoping that promotions from Chinese New Year would amplify order dynamics, which are seemingly quite difficult for the time being. The 512Gb TLC wafer spot stayed flat this week at US$3.437.

[News] TSMC’s JASM Kumamoto Plant 2 Greenlit, Construction Expected to Commence by Year’s End Wed, 07 Feb 2024 02:23:20 +0000 TrendForce Continue reading ]]> [News] TSMC’s JASM Kumamoto Plant 2 Greenlit, Construction Expected to Commence by Year’s End

TSMC officially gives the green light to the second fab in Kumamoto, Japan! On January 6th, TSMC, Sony Semiconductor Solutions Corporation (SSS), DENSO Corporation (DENSO), and Toyota Motor Corporation (Toyota) jointly announced further investment in TSMC’s Japanese subsidiary, Japan Advanced Semiconductor Manufacturing, Inc. (JASM).


The collaboration is expected to construct JASM’s second fab in Japan, dedicated to the 6/7-nanometer advanced process. The new facility is expected to commence operations by the end of 2027, with a total investment exceeding USD 20 billion, strongly supported by the Japanese government.

TSMC has stated that in this investment venture with JASM, TSMC, SSS, DENSO, and Toyota hold approximately 86.5%, 6.0%, 5.5%, and 2.0% of JASM shares, respectively. Toyota Motor Corporation is a new major shareholder following this capital increase, indicating its potential involvement in automotive electronics initiatives.

TSMC has further indicated that the construction of JASM’s second fab in Japan is set to commence at the end of 2024. The expansion in production capacity is expected to optimize overall cost structure and supply chain efficiency.

With two fabs in Kumamoto, TSMC anticipates in the press release that JASM’s total monthly production capacity will exceed 100,000 12-inch wafers, offering process technologies ranging from 40nm, 22/28nm, 12/16nm, to 6/7nm for automotive, industrial, consumer, and high-performance computing (HPC) applications. Capacity planning may be further adjusted based on customer demand.

For JASM’s first fab, it is planned to commence production by the end of the year. The initial facility, costing USD 8.6 billion, received subsidies of JPY 478 billion (approximately USD 3.23 billion) from the Japanese government.

The primary process of the first fab are 22/28nm and 12/16nm, with a monthly production capacity of around 50,000 12-inch wafers. Located in Kikuyo-cho, Kikuyo-gun, Kumamoto Prefecture, Kyushu, construction of the facility was announced in November 2021, ground was broken in April 2022, and construction was completed within two years.

JASM’s first fab is set to open on February 24, 2024, with mass production scheduled by the end of the year. The facility is a joint venture between Taiwan and Japan, with TSMC holding the majority of shares, Sony Semiconductor Manufacturing Corporation (SSMC) of Japan holding approximately 20%, and Toyota Group’s DENSO holding about 10%.

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[Insights] EV Development Faces New Challenges, Porsche CFO Suggests Delay in European Ban on New Fuel Cars Wed, 07 Feb 2024 00:00:26 +0000 TrendForce Continue reading ]]> [Insights] EV Development Faces New Challenges, Porsche CFO Suggests Delay in European Ban on New Fuel Cars

Porsche’s Chief Financial Officer Lutz Meschke has stated in a media interview following the conclusion of the Macan EV unveiling on January 25, 2024, that Europe’s initial plan to ban the sale of new fuel cars by 2035 may be postponed, as reported by Bloomberg.

TrendForce’s Insights:

  • Prolonging the Battle and Gradually Narrowing the Gap with Chinese Automakers through Trade Barriers

In March 2023, the European Union passed a ban on the sale of new petrol and diesel cars starting from 2035.

Due to opposition from Germany and Italy, after coordination, the European Union agreed not to ban models using synthetic fuels. Range anxiety of electric vehicles continue to affect the willingness of end consumers to purchase cars, becoming the biggest obstacle to the growth of electric vehicle sales.

Coupled with China’s electric vehicle market, which accounts for over 50% of global BEV sales, nurturing Chinese automakers led by BYD, who continuously lead in the technical level of the the battery system, the electric drive system, and the electronic control system compared to Europe, America, and Japan.

Not long ago, Tesla CEO Elon Musk stated that without trade barriers, Chinese automakers would destroy the vast majority of their competitors. Whether this statement is exaggerated or not, trade barriers currently serve as the most effective means for Europe and the United States to prevent the continued growth and expansion of Chinese automakers, as exemplified by the United States’ IRA legislation and the European Union’s anti-subsidy investigations.

Delaying the implementation of the ban on the sale of new fuel cars can synergize with trade barriers, allowing consumers to maintain distance from Chinese-made electric vehicles. This approach provides breathing space for European automakers and US and Japanese automakers in the fuel car market.

With the Dual Strategy of Western and Japanese Automakers, Taiwanese Manufacturers Need Greater Flexibility in Planning

Assuming the postponement of the ban on the sale of new fuel cars, automakers in Europe, the United States, and Japan may simultaneously pursue synthetic fuel technology based on traditional fuel car frameworks while continuing to develop electric vehicle technology.

However, this dual approach, which does not favor one technology over the other, is likely to affect the allocation of resources for electric vehicles. During the era of internal combustion engine vehicles, dominated by Western, Japanese automakers, and Tier 1 suppliers due to various constraints such as patents and technological barriers, it has been challenging for Taiwan to access system-level supply opportunities.

In the era of electric vehicles, Fukuta Elec & Mach Co.’s all-in-one electric drive and control system has entered Mazda’s range-extended electric vehicle supply chain, while Foxconn has launched an electric vehicle manufacturing platform to vie for opportunities in complete vehicle manufacturing from carmakers. Consequently, Taiwan is gradually moving from Tier 3 and Tier 2 to Tier 1.

If automakers in Europe, the United States, and Japan adopt a dual strategy, Taiwanese manufacturers’ opportunities in the electric vehicle field may face reduction or fiercer competition.

Apart from continuously strengthening relevant technologies in the electric vehicle domain, Taiwanese manufacturers also need to enhance the commonality and modularity of their product lines to adapt to the ever-changing industrial regulations under geopolitical shifts.

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(Photo credit: Pixabay)

Please note that this article cites information from Bloomberg.

[Insights] OpenAI CEO’s Ambition to Build Semiconductor Plant Grows Stronger Tue, 06 Feb 2024 23:30:13 +0000 TrendForce Continue reading ]]> [Insights] OpenAI CEO’s Ambition to Build Semiconductor Plant Grows Stronger

In late December 2023, reports surfaced indicating OpenAI CEO Sam Altman’s intention to raise funds to construct a semiconductor plant, ensuring a secure supply of AI chips.

According to a report from the Washington Post on January 24, 2024, Sam Altman has engaged with US congressional members to discuss the construction of the semiconductor plant, including considerations of timing and location, highlighting his increasingly fervent ambition to establish the facility.

TrendForce’s Insights:

  • Rising AI Computing Demands Heighten Sam Altman’s Concerns About Chip Supply

The rapid emergence of AI-generated content (AIGC) undoubtedly stood out as a highlight of 2023, closely tied to the quality and efficiency of the large language models (LLMs) used. Take OpenAI’s ChatGPT, for instance, which employs the GPT-3.5 model released in 2020. With 175 billion training parameters, it surpasses its predecessor, GPT-2, by over 100 times, itself being over 10 times larger than the initial GPT from 2018.

In pursuit of better content quality, diversified outputs, and enhanced efficiency, the continuous expansion of model training parameters becomes an inevitable trend. While efforts are made to develop lightweight versions of language models for terminal devices, the cloud-based AI computing arena anticipates a continued expansion of language model training parameters, moving towards the “trillion” scale.

Due to the limited growth rate of AI chip performance, coping with the rapidly increasing model training parameters and the vast amount of data generated by the flourishing development of cloud-based AIGC applications inevitably requires relying on more AI chips. This situation continues to exert pressure on the chip supply chain.

Given that the demand for AI computing is escalating faster than the growth rate of chip performance and capacity, it’s understandable why Sam Altman is concerned about chip supply.

  • Sam Altman to Seek Collaboration with Foundries for Plant Construction Goal

The construction of advanced process fabs is immensely costly, with estimates suggesting that the construction cost of a single 3nm fab could amount to billions of dollars. Even if Sam Altman manages to raise sufficient funds for plant construction, there remains a lack of advanced semiconductor process and packaging technology, not to mention capacity, yield, and operational efficiency.

Therefore, it is anticipated that Sam Altman will continue to seek collaboration with sfoundries to achieve his factory construction goal.

Looking at foundries worldwide, TSMC is undoubtedly the preferred partner. After all, TSMC not only holds a leading position in advanced processes and packaging technologies but also boasts the most extensive experience in producing customized AI chips.

While Samsung and Intel are also suitable partners from a localization perspective, considering factors like production schedules and yield rates, choosing TSMC appears to be more cost-effective.

(Photo credit: OpenAI)

Please note that this article cites information from The Washington Post.

[News] Samsung Exynos 2400 Mass Production in 4LPP+ Process, Yield Beats Last Year’s Performance Tue, 06 Feb 2024 06:45:57 +0000 TrendForce Continue reading ]]> [News] Samsung Exynos 2400 Mass Production in 4LPP+ Process, Yield Beats Last Year’s Performance

Samsung’s flagship mobile processor, the Exynos 2400, produced using the 4LPP+ process technology, currently boasts a yield rate of approximately 60%, as per sources cited by TechNews. While this figure falls short of competitors, notably TSMC’s N4P process technology with yields surpassing 70%, it represents a significant improvement from Samsung’s own 25% yield rate over a year ago.

Samsung’s Exynos 2400 flagship mobile processor is the company’s first to utilize Fan-Out Wafer-Level Packaging (FOWLP). Samsung claims that FOWLP technology enhances heat resistance by 23% and boosts multicore performance by 8%. Consequently, the Exynos 2400 mobile processor delivers commendable performance in the latest 3DMark Wild Life benchmark tests.

In fact, Samsung previously announced plans to commence mass production of the SF3 chip in the second half of 2024, followed by the introduction of its 2-nanometer process technology between 2025 and 2026.

Industry sources cited in the report also indicate that Samsung’s foundry business has begun trial production for its second-generation 3-nanometer process technology, SF3. Furthermore, the company aims to increase its yield rate to over 60% within the next six months.

It is noteworthy that Samsung’s 3nm technology is highly aggressive compared to TSMC’s approach, which will transition to GAA transistors with its 2nm process. Samsung’s first-generation 3nm process already incorporates GAA transistor technology, specifically the MBCFET (Multi-Bridge Channel Field-Effect Transistor), known as SF3E, or 3GAE technology.

As per WeChat account ic211ic cited sources in the report, Samsung’s 3nm GAA technology utilizes wider nanosheets compared to the narrow nanowire GAA technology, offering higher performance and energy efficiency. With the 3nm GAA technology, Samsung can adjust the channel width of nanosheet transistors to optimize power consumption and performance, meeting diverse customer requirements.

Additionally, the flexibility of GAA design is highly advantageous for Design-Technology Co-Optimization (DTCO), contributing to achieving better Power, Performance, and Area (PPA) advantages.

In comparison to Samsung’s 5nm process, the first-generation 3nm process reduces power consumption by 45%, enhances performance by 23%, and decreases chip area by 16%. The upcoming second-generation 3nm process is expected to further reduce power consumption by 50%, boost performance by 30%, and reduce chip area by 35%.

(Photo credit: Samsung)

Please note that this article cites information from TechNews and WeChat account ic211ic.

[News] Huawei Shifts Focus, Prioritizing Production of AI Chips over Mate 60 Series Tue, 06 Feb 2024 02:50:04 +0000 TrendForce Continue reading ]]> [News] Huawei Shifts Focus, Prioritizing Production of AI Chips over Mate 60 Series

Industry sources cited by Reuters have revealed that Huawei, the Chinese telecommunications giant, is slowing down the production of its high-end Mate 60 series smartphone due to surging demand in the AI chip market and production constraints. Instead, the company has decided to prioritize the production of AI chips from its Ascend series, diverging from the Kirin chips used in the Mate 60 series.

According to a report by Reuters on January 5th, Huawei is utilizing a plant to simultaneously produce chips from the Ascend series and the Kirin series. The current plan is to prioritize the production of Ascend chips over Kirin chips, although the exact starting date for this arrangement has not been disclosed.

On the other hand, the production volume of Huawei’s Mate 60 series, launched in August last year, has been hampered by low chip yields. Reportedly, Huawei is actively working to improve chip yields, and it is hoped that the mentioned production adjustment will be a short-term measure.

It’s worth noting that many Huawei products have recently been affected by production bottlenecks. The computation components for Huawei’s assisted driving system have encountered production issues due to shortages of components.

This has led to delays in the delivery of flagship models from Changan Automobile, Chery Automobile, and Seres. Changan Automobile and Chery Automobile have already filed complaints and are currently in negotiations with Huawei.

Reports have indicated that since 2019, the U.S. government has imposed sanctions on Huawei, citing national security concerns, thereby cutting off Huawei’s access to advanced chip manufacturing equipment and technology and weakening its smartphone division. In response, Huawei denies posing any security risks and is actively working to rebuild its business.

In addition, Bloomberg previously reported that the Chinese government has also been directly investing to assist Huawei in building its chip supply chain since 2019, creating an exclusive supply chain for Huawei in response to the tighten restrictions.

In October 2023, the U.S. further strengthened restrictions on the export of advanced chips and chip manufacturing equipment to China, building upon previous limitations. This move forced Chinese customers to turn to domestic alternatives. Huawei’s Ascend 910B chip is considered the most competitive non-NVIDIA chip available in the Chinese market.

Huawei has maintained a low profile regarding its chip manufacturing capabilities and objectives. There is limited public information about its progress or how it successfully produces advanced chips.

In August 2023, during U.S. Commerce Secretary Gina Raimondo’s visit to China, Huawei launched the Mate 60 series, garnering significant market attention.

(Photo credit: Huawei)

Please note that this article cites information from Reuters.

[News] Samsung Accelerates 3D Packaging with Hybrid Bonding Production Line in Korean Advanced Packaging Hub Mon, 05 Feb 2024 23:30:55 +0000 TrendForce Continue reading ]]> [News] Samsung Accelerates 3D Packaging with Hybrid Bonding Production Line in Korean Advanced Packaging Hub

In a bid to enhance its foundry capabilities, Samsung is earnestly integrating hybrid bonding technology. According to industry sources, Applied Materials and Besi Semiconductor are establishing equipment for hybrid bonding at the Cheonan Campus, slated for use in next-generation packaging solutions like X-Cube and SAINT.

According to a report from South Korean media outlet The Elec, industry sources have indicated that Applied Materials and Besi Semiconductor are installing hybrid bonding equipment at Samsung’s Cheonan Campus, a key site for advanced packaging production. Officials from the South Korean industry also mentioned that a production line is currently under construction, with the equipment intended for non-memory packaging.

Compared to existing bonding methods, hybrid bonding enhances I/O and wiring lengths. Samsung’s latest investment is expected to strengthen its advanced packaging capabilities, introducing the X-Cube utilizing hybrid bonding technology.

Industry sources cited by the report have suggested that hybrid bonding could also be applied to Samsung’s SAINT (Samsung Advanced Interconnect Technology) platform, which the company began introducing this year. The platform includes three types of 3D stacking technologies: SAINT S, SAINT L, and SAINT D.

SAINT S involves vertically stacking SRAM on logic chips such as CPUs. SAINT L involves stacking logic chips on top of other logic chips or application processors (APs). SAINT D entails vertical stacking of DRAM with logic chips like CPUs and GPUs.

TSMC, the leading semiconductor foundry, also offers hybrid bonding in its System on Integrated Chip (SoIC) for 3D packaging services, which is similarly provided by Applied Materials and Besi Semiconductor. Intel has also applied hybrid bonding technology in its 3D packaging technology, Foveros Direct, which was commercialized last year.

Reportedly, industry sources anticipate that Samsung’s investment in hybrid bonding facilities is poised to attract major clients such as NVIDIA and AMD. This is because the demand for hybrid bonding among fabless customers is steadily increasing.

(Photo credit: Samsung)

Please note that this article cites information from The Elec.

[Insights] Early February Panel Prices Update, TV Panel Returns to an Upward Pricing Trend Mon, 05 Feb 2024 08:23:07 +0000 TrendForce Continue reading ]]> [Insights] Early February Panel Prices Update, TV Panel Returns to an Upward Pricing Trend

TrendForce has released the latest panel quotations for early February. Due to the effective production control strategies implemented by panel manufacturers, there is an expectation of gradually stimulating panel demand. It is anticipated that TV panel prices will return to an upward trend in February. Details are as follows:

  • TV

From the perspective of panel suppliers, with the reduction in working days and the Lunar New Year holiday in February, it is expected that the average utilization rate will fall below 60%. Coupled with the relatively low TV panel inventory in the supply chain, the production control strategies of panel manufacturers have been effective. There is an anticipation of gradually stimulating the recovery of TV panel demand.

Meanwhile, the upstream supply issues with polarizing film materials have exacerbated, and it is expected that TV panel prices will return to an upward trend in February. Currently, it is expected that 32-inch, 43-inch, and 50-inch panels will increase by 1 USD, 55-inch by 2 USD, and 65-inch and 75-inch by 3 USD in February.

  • Monitor

Although monitor panel demand is in the off-season, due to panel production cuts, unstable conditions in the shipping industry, and supply issues with polarizing film materials, some customers are observed to be willing to increase orders to mitigate potential risks. Additionally, with the established upward trend in TV panel prices in February, panel manufacturers are more confident, and it is expected that open-cell panels will increase by 0.1 to 0.2 USD. Panel module prices, however, are expected to remain overall stable.

  • Notebook

Notebook panel demand is still in the off-season in the first quarter, and with sluggish demand, brand customers continue to request panel manufacturers to maintain the trend of price reductions. Different panel manufacturers respond differently to this pressure. Newer entrants are actively seeking to expand market share, leading to a more aggressive pricing strategy, putting pressure on existing panel manufacturers. In this competitive situation, notebook panel prices are not easily expected to see a comprehensive stabilization. In February, only TN models are expected to maintain a stable trend, while FHD IPS models are expected to decrease by 0.1 USD, and 16:10 models are expected to decrease by 0.2 to 0.3 USD.