Taiwanese Minister of Economic Affairs J.W. Kuo, who was invited to visit Japan, attended a forum on August 30 organized by the Taiwan-Japan Research Institute and delivered a keynote speech. As reported by Kyodo News citing the interview with Kuo, he indicated that TSMC plans to build a third fab in Japan, but with a projected timeline after 2030.

However, Kuo emphasized that the final decision on whether to proceed with the expansion in Japan rests with TSMC, and he refrained from discussing specific site locations.

In addition, in response to Kuo’s comments, the Ministry of Economic Affairs clarified that any details regarding TSMC’s potential third fab should be confirmed with the foundry giant itself.

Reportedly, Kumamoto Prefecture Governor Takashi Kimura visited TSMC’s headquarters on the afternoon of August 26 and held talks with TSMC’s senior executives.

Notably, Takashi Kimura, who took office in April, stated in an report from Bloomberg on May 11th that he would spare no effort to persuade TSMC to establish a third fab in the region, believing that during the preparations for TSMC’s first fab in Kumamoto, the region already possesses better-quality road and water infrastructure and an education system that better supports international school students, which could be advantageous.

TSMC’s fabs in Kikuyo Town, Kumamoto Prefecture (Kumamoto Fab 1) is set to begin mass production in Q4 (October-December), utilizing 28/22nm and 16/12nm process technologies, with a monthly production capacity of 55,000 wafers.

The Kumamoto Fab 2 is scheduled to begin construction at the end of 2024, with the goal of starting operations by the end of 2027, focusing on 6/7nm processes. The combined monthly production capacity of TSMC’s Kumamoto fab 1 and 2 is estimated to exceed 100,000 wafers.

TSMC Chairman C.C. Wei mentioned in June that after the successful operation of the first and second fabs, TSMC would consider building a third fab if it receives the approval of the local residents.

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• [News] TSMC Reports No Major Damage to Kumamoto Plant after 7.1 Magnitude Earthquake near Kyushu, Japan
• [News] TSMC’s Kumamoto Fab 2 Reportedly Begins Land Preparation

(Photo credit: TSMC)

As per a report from Economic Daily News, TSMC’s first European 12-inch fab is set to hold its groundbreaking ceremony on August 20. Along with TSMC’s ongoing projects in Japan and the U.S., the investment has amounted to nearly USD 100 billion. Meanwhile, this move is also expected to generate opportunities for supporting Taiwanese contractors.

The new TSMC facility in Dresden, Germany, is anticipated to use 28/22nm planar CMOS and 16/12nm FinFET process, with a monthly production capacity of approximately 40k 12-inch wafers.

Per TSMC’s plan, its fab in Germany will start operation by the end of 2027, with estimated costs exceeding EUR 10 billion (approximately USD 10.8 billion), creating opportunities in plant equipment and engineering sectors.

In response to the demand, Marketech International, a Taiwanese fab tool maker, has already set up offices and accommodations in Dresden in 2023 and has deployed staff there.

Additionally, Topco Scientific, a Taiwanese semiconductor materials distributor, is also said to be planning to establish a presence in Europe, with plans to set up operations in Prague, Czech Republic, about two hours’ drive from Dresden.

On the other hand, TSMC is accelerating the construction of its Kumamoto plant in Japan, with production scheduled to begin by the end of this year. This facility will be the fastest among TSMC’s new overseas fabs to start production. TSMC is also actively advancing the construction of a second Kumamoto plant.

TSMC plans to invest over USD 20 billion in its two Japanese facilities, which are expected to have a combined monthly capacity of over 100k 12-inch wafers. The plants will offer 40nm, 22/28nm, 12/16nm, and 6/7nm process.

Once operational, the Kumamoto plant is anticipated to generate significant opportunities in the semiconductor inspection sector.

MA-tek, a giant in semiconductor inspection and analysis services, is planning to expand its service at its laboratories in Nagoya and Kumamoto, while setting up a third laboratory to fully meet the needs of local semiconductor clients.

As for TSMC’s fab in Arizona, U.S., the company has planned a total capital expenditure exceeding USD 65 billion. Industry sources cited by Economic Daily News have expected that companies like United Integrated Services and Marketech International will continue to benefit from this investment.

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• [News] TSMC Reports No Major Damage to Kumamoto Plant after 7.1 Magnitude Earthquake near Kyushu, Japan
• [News] TSMC’s German Plant Reported to Break Ground in Weeks, Expected to Begin Production by Late 2027

(Photo credit: TSMC)

TSMC is significantly expanding its production, continuously increasing its facilities. On August 15, as per a report from Liberty Times Net, the company announced that it had signed a contract with panel manufacturer Innolux to purchase its plant and associated facilities located in the Southern Taiwan Science Park.

The building’s total area exceeds 96,000 square meters, with a transaction value of NTD 17.14 billion, which is much lower than the rumored market price of over NTD 20 billion. TSMC announced that the facility will be used for operations and production.

Innolux recently announced the sale of 4th Plant in Tainan (5.5-generation LCD panel plant). A previous report from Economic Daily News once cited rumors, claiming that both Micron and TSMC have been actively exploring the acquisition.

Moreover, it was also reported that TSMC offered a price 20% higher than the base price, with plans to use the facility to expand its advanced process or advanced packaging capacity.

According to Liberty Times Net citing sources at the Southern Taiwan Science Park, TSMC’s original plant is located in the northwest part of the park, while the newly acquired Innolux plant is situated in the southwest, so they are not adjacent.

TSMC had previously purchased a plant from Hannstar and demolished and rebuilt it, as the planning of panel plants differs from that of fabs. TSMC also acquired a plant from E-Ton Solar Tech in the Southern Taiwan Science Park, which is currently being used as an intelligent warehouse.

Based on Innolux’s post-capital-reduction share capital of NTD 79.8 billion, the sale is expected to contribute around NTD 1.84 per share in earnings.

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• [News] Innolux’s 4th Plant in Tainan Reportedly to be Secured by TSMC
• [News] Innolux Confirms Sale of Tainan Plant 4, with Micron & TSMC Reportedly in the Bidding Stage

(Photo credit: Innolux)

Recently, China’s National Integrated Circuit Industry Investment Fund Phase II (referred to as the ““Big Fund” Phase II”) has made frequent investment, successively acquiring stakes in the wafer manufacturing company Chongqing Xinlian Microelectronics Co., Ltd. (referred to as “XLMEC”) and the new silicon wafer enterprise Taiyuan Jinke Silicon Material Technology Co., Ltd. (referred to as “Jinke Silicon Material”).

“Big Fund” Phase II give priority to investing in semiconductor equipment and materials industries, with an emphasis on the upstream industrial chain covering film equipment, testing equipment, as well as materials like photoresists and masks.

According to statistics from Wechat Account Global Semiconductor, the “Big Fund” Phase II has initiated several investment over the past half year, involving companies such as IC design company Joywell Semi, EDA tool development startup Amedac, semiconductor equipment company SMIF, ceramic material developer Genori, EDA tool company Nine Cube, IP supplier KNL, JCET Auto Electronics (Shanghai) and CMOS millimeter-wave radar SoC chip company Calterah.

• “Big Fund” Phase II Invested Fab XLMEC with CNY 2.1 Billion

Recently, according to the latest information from QCC, Chongqing XLMEC has undergone several industrial and commercial changes. Notably, “Big Fund” Phase II has been added as a new shareholder, with a committed investment amounting to CNY 2.155 billion, representing a stake of 24.77% in XLMEC.

XLMEC’s business scope includes integrated circuit design, integrated circuit manufacturing, integrated circuit chip and product manufacturing, integrated circuit chip design and services, and semiconductor device-specific equipment manufacturing.

The company is positioned as a leading specialty process wafer fabrication plant in the western region of China, with the goal of becoming an advanced automotive-grade chip manufacturing company. As a fully state-owned company, it undertakes a project of building a 12-inch advanced specialty integrated circuit process line.

The first phase of the project plans for a capacity of 20,000 wafers, dedicated to becoming a significant strategic backup for the national integrated circuit industry in the west of China, ensuring the security of the integrated circuit supply chain.

Located in the Xiyong Microelectronics Industrial Park in Chongqing, XLMEC is counted as a focal project jointly developed by the Chongqing and High-tech Zone governments as part of the “33618” modern manufacturing cluster system and a key project for the transformation and upgrading of Chongqing’s high-end manufacturing and integrated circuit industries.

As a major project initiated by the Chongqing Municipal Government, it has a total investment exceeding several billion yuan, focusing on the R&D and production of 55-28nm technology nodes, with a planned total capacity of 40,000 wafers per month, of which the first phase capacity is 20,000 wafers per month.

• “Big Fund” Phase II Jointly Established a Silicon Material Company in Taiyuan Shanxi

As per Tianyancha, Jinke Silicon Material was established on July 15 with a registered capital of CNY 5.5 billion. It is jointly held by “Big Fund” Phase II, Taiyuan Jinke Semiconductor Technology Co., Ltd. (referred to as “Taiyuan Jinke Semiconductor”), and Taiyuan Fenshui Capital Management Co., Ltd, with a business scope including the manufacturing of semiconductor discrete devices, electronic special materials, other electronic devices, and integrated circuits.

In terms of equity structure, “Big Fund” Phase II holds 27.27%, Taiyuan Jinke Semiconductor 50.91%, and Taiyuan Fenshui Capital Management 21.82%. It is understood that Taiyuan Jinke Semiconductor is a wholly-owned subsidiary of Shanghai ZINGSEMI, which is itself wholly owned by National Silicon Industry Group (NSIG).

On June 11, NSIG announced its plan to invest in the capacity upgrade project for 300mm silicon wafers used in integrated circuits, with a total expected investment of about CNY 13.2 billion. It is learned that this investment will be implemented in two parts: the Taiyuan project and the Shanghai project, with the former expected to involve a total investment of about CNY 9.1 billion.

The implementing entity for the Taiyuan project is Jinke Silicon Material, which was co-founded by three parties: ZINGSEMI or its subsidiary (intended investment of CNY 2.8 billion), the “Big Fund” Phase II (intended investment of CNY 1.5 billion), and Taiyuan Fenshui Capital Management or its subsidiary (intended investment of CNY 1.2 billion), with a total joint investment of CNY 5.5 billion.

Upon its establishment, Jinke Silicon Material will primarily engage in the 300mm semiconductor silicon wafer business, implementing the capacity upgrade Taiyuan project for 300mm silicon wafers used in integrated circuits.

This project is scheduled to achieve a total capacity of 600,000 wafers per month for crystal pulling (including heavily doped wafers) and 200,000 wafers per month for slicing, grinding, and polishing (including heavily doped wafers). It will also promote the continuous upgrade and iteration of 300mm silicon wafer technology to meet the process requirements of various technical nodes in Chinese market.

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• [News] China’s Big Fund Phase Three Commences, Injecting 344 Billion RMB into Semiconductor Industry Growth
• [News] Big Fund II Infuses HLMC with an Additional USD 1 Billion, Potentially Eyeing on More Advanced Processes

(Photo credit: XLMEC)

Recently, global chip giant Intel announced to acquire a stake in Dongguan Luxshare Technology Co., Ltd. (Referred to as “Dongguan Luxshare Technology”), a subsidiary of Luxshare Precision.

According to a report from WeChat account DRAMeXchange citing sources, it has shown that on June 12, Dongguan Luxshare Technology’s registered capital increased from around CNY 571 million to around CNY 589 million, an increase of about 3.1%, with Intel (China) Co., Ltd. as a new shareholder. It is reported that Intel China has invested CNY 17.662 million in the company.

Luxshare Precision primarily provides products for industries including consumer electronics, communications and data centers, automotive electronics, and medical sectors. As its subsidiary, Dongguan Luxshare Technology specializes in the production of communications equipment such as base station antennas, filters, and RRU, as well as interconnect products like connectors, cables, optical modules, and AOC, which have been widely used in applications like wireless communication base stations, data centers, servers, switches, and routers.

As a global leader in the semiconductor industry and computing innovation, Intel achieved a revenue of USD 63 billion in 2022. In the computing sector, statistics showed that in 4Q23, Intel shipped as many as 50 million PC processors, representing a year-on-year increase of 3% and a market share of 78%.

In the semiconductor field, Intel is developing foundry business at full throttle. According to its official website, to meet the growing global semiconductor demand and promote its IDM 2.0 strategy, Intel is ramping up its production capacity by investing about USD 20 billion in building fabs in Arizona and New Mexico, and over USD 20 billion in Ohio for the acquisition of Tower Semiconductor. It plans to pour up to EUR 80 billion to the EU in the entire semiconductor value chain over the next decade.

As per another report from the Securities Times, a source revealed that this cooperation does not involve the consumer electronics field but mainly the communications field. That means future products of Luxshare Precision in this field will be deeply integrated with Intel chips. For instance, both parties will engage in deep collaboration from the product development stage.

Furthermore, industry sources cited by the same report further explained that the transmission rate and bandwidth of communication-related products are fundamentally related to the chips they use. Therefore, Intel’s investment in Luxshare Precision’s subsidiary will enhance the competitiveness of Luxshare Precision’s products in the communications and data center sectors, contributing to the rapid development of this business.

As stated in Luxshare Precision’s annual report, the communications industry embraced new development opportunities amidst the wave of global digital transformation in 2023. Copper connectivity, optical connectivity, thermal modules, servers, and communication RF fields that Luxshare’s business has involved also saw significant growth, which became important drivers for the industry development.

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• [News] Intel CEO Gelsinger Indicates US Chip Restriction Could Force China to Accelerate Development
• [News] Luxshare Reportedly Enters NVIDIA’s Chain, Eyeing at AI Chip Business

(Photo credit: Intel)