Countries around the world are leaving no stone unturned in their pursuit of semiconductor development, and South Korea is no exception. South Korea has just unveiled an ambitious plan to invest a staggering 622 trillion Korean won (approximately $471 billion USD) in collaboration with industry giants Samsung Electronics and SK hynix, aiming to create the world’s largest semiconductor supercluster.

According to reports from The Korea Times, South Korea’s vision includes the construction of the world’s largest semiconductor cluster in Gyeonggi Province by 2047. As revealed by the Ministry of Trade, Industry, and Energy in South Korea, Samsung Electronics, SK hynix, and other semiconductor companies are set to pool their resources into building 16 new fabs, with the potential to generate over 3 million job opportunities.

This ambitious undertaking will involve an expansion of the existing mega cluster, which already boasts 19 production fabs and two research fabs spread across adjacent cities in the province. The new mega chip cluster, spanning a massive 2,102 square meters, is slated to commence production, churning out an impressive 7.7 million wafers each month, beginning in 2030.

Within this sprawling cluster, Samsung Electronics has outlined plans to construct six new fabs at the national industrial complex in Yongin, with an investment commitment of 360 trillion Korean won. Additionally, the company intends to establish three fabs in Pyeongtaek, involving an investment of 120 trillion Korean won, and three research fabs at an R&D center located in the Giheung District, at a cost of 20 trillion Korean won. Meanwhile, SK hynix is earmarking 122 trillion Korean won for the construction of four fabs at another industrial complex in Yongin.

The primary objective of this supercluster is to foster an environment conducive to the production of cutting-edge memory chips, including high bandwidth memory (HBM), and system semiconductors measuring 2 nanometers or more advanced nodes.

Reports suggest that with the establishment of this new cluster, the South Korean government has set ambitious targets for the country. By 2030, they aim to capture a significant 10% share of the system semiconductor market, a substantial increase from the current 3%. 

Furthermore, the government plans to boost self-sufficiency in the supply chain of critical materials, components, and equipment from the current 30% to an impressive 50% by the year 2030.

(Image: SK Hynix)

With the semiconductor market facing uncertainties and limited signs of industry recovery in the first half of 2024, foundries in China, Taiwan, and South Korea are all implementing price reductions to secure orders and solidify customer relationships.

According to TechNews citing from supply chain sources, Samsung Foundry, which had not taken action previously, is expected to follow suit with price cuts in the first quarter to keep pace with competitors.

Reportedly, industry sources suggest that Samsung Foundry is adopting a price reduction strategy in the first quarter of 2024, offering discounts ranging from 5% to 15% and expressing a willingness to negotiate.

Samsung Foundry’s actions can be interpreted as a goodwill gesture towards its customers. The company has been in constant competition with TSMC, especially in processes below 5nm, and actively engaging in negotiations with customers, seeking collaboration opportunities with Qualcomm, NVIDIA, AMD and others.

Considering the subdued semiconductor market in 2023, fabs in both China and South Korea have implemented price cuts to secure orders. The price reductions for mature processes in 8-inch and 12-inch wafer reached 20-30%, while Taiwanese fabs have also made concessions in pricing.

TSMC, the leading foundry, had already been reported to offer price concessions in 2023, with the major focus on mask costs rather than foundry services. It was mentioned at that time that TSMC’s price concessions primarily applied to the 7nm process, where utilization rates were lower, and the extent of concessions depended on the volume of orders from customers.

In terms of the global foundry landscape, according to data published by TrendForce, Taiwan holds approximately 46% of global foundry capacity, followed by China (26%), South Korea (12%), the US (6%), and Japan (2%).

However, due to government incentives and subsidies promoting local production in countries like China and the US, the semiconductor production capacities of Taiwan and South Korea are projected to decrease to 41% and 10%, respectively, by 2027.

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(Photo credit: Samsung)

Global memory giants continue to reduce production, coupled with the situation where market demand is increasing due to the rise in artificial intelligence and high-performance computing applications, as well as inventory replenishment from the smartphone market. This combination is driving a continuous increase in memory prices, especially the astonishing surge in NAND Flash.

According to a report from TechNews, there are once again rumors in the market today that the upward trend in DRAM prices is resurfacing. This includes plans from both Samsung and Micron to implement a price increase ranging from 15% to 20% in the first quarter of 2024.

Currently, the market anticipates tight DRAM supply in 2024 due to the increasing adoption of artificial intelligence and high-performance computing, along with a gradual recovery in the smartphone and PC markets. As the contract price negotiation for the first quarter is underway, industry sources reveal that memory manufacturers have begun adjusting DRAM prices since January, urging customers to plan for future usage demands.

There are reports in the market that Samsung recently announced that DRAM prices will increase by at least 15% starting in the first quarter of 2024. While there is no clear indication of the NAND Flash memory price hike at the moment, it is expected to continue to rise. The upward trend in DRAM prices is expected to persist until the end of 2024.

Apart from Samsung, Micron, with a modest 2-3% increase in DRAM prices in December 2023, lower than the 10% increase in 3D TLC NAND, is reportedly considering a DRAM price hike of around 15-20%.

Regarding the price trend of DRAM in the first quarter of 2024, TrendForce currently maintains a forecast of a seasonally increased average of 13-18%, with the highest increase observed in the mobile DRAM category, while server DRAM appears relatively conservative. According to TrendForce’s observation, due to the uncertain demand outlook for the entire year 2024, memory manufacturers believe that a continued reduction in production is necessary to maintain the supply-demand balance in the memory industry.

Read more

• Market Anticipates a 50% Price Surge for NAND Flash in Short-Term

(Image: Samsung )

Recent revelations from South Korean source yeux1122 indicate that LG Display (LGD) holds a higher share than Samsung Display in the supply of OLED screens for Apple’s new iPad Pro.

The leak suggests that LGD is planning to commence mass production of OLED screens for Apple’s iPad Pro in February 2024, with an estimated annual output ranging from 6.2 to 6.5 million screens.

Currently, Apple’s iPad Pro series products utilize LCD and mini-LED display screens. However, it is anticipated that in 2024, Apple will introduce an OLED version of the iPad Pro.

The leak also indicates that LGD has taken the lead by deploying a two-stack tandem structure and excelling in the supply of organic material devices compared to the Samsung camp.

On the other hand, Samsung faced several yield-related challenges during the supply process, but most of these issues have now been officially resolved. The initial estimate suggests that Samsung will supply around 4 million screens to Apple.

In fact, according to other industry sources, Apple already began discussions with two major suppliers, Samsung and LGD, regarding the OLED version supply for the iPad approximately 2-3 years ago, and set LGD’s supply volume to be larger than that of Samsung.

For the upcoming OLED iPad Pro models, the screen sizes are expected to slightly increase to 11 inches and 13 inches, with Wi-Fi and 5G models having the codenames J717, J718, J720, and J721.

Another rumor has previously revealed that the next iPad Pro, which is set to come out in 2024 as per the report, may support MagSafe wireless charging. The prototype has a glass Apple logo on the back, while the rest of the back remains aluminum. This design allows power to be transmitted through the glass logo without affecting the durability of the iPad.

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(Photo credit: Apple)

Examining the dynamics of advanced semiconductor manufacturing, from research and development to the competition for cutting-edge equipment and securing orders, major players such as TSMC, Samsung, and Intel are constantly in action. Simultaneously, newcomer Rapidus is making a strong entrance. The competition for advanced processes is set to intensify in 2024.

Amidst the global chipmakers’ race to develop 2-nanometer processes, TSMC has once again emerged victorious by securing Apple’s order. The upcoming iPhone 17 Pro, expected to be released in 2025, reportedly will feature TSMC’s 2-nanometer chip. Samsung is also gearing up to launch a 2nm prototype in 2024, reportedly offering discounted prices with the aim of attracting customers such as NVIDIA.

However, industry insiders reveal that TSMC is on the verge of finalizing its clients for future 3nm and 2nm technologies, apart from Apple, AMD, NVIDIA, Broadcom, MediaTek, and Qualcomm are among the clients for TSMC’s 3nm and 2nm processes. The changes in the customer portfolio of TSMC, Samsung, and Intel in 2024 are bound to be the focal point throughout the year.

(Image: TSMC)