The US government’s CHIPS and Science Act is reportedly injecting funds into chip manufacturing at an unprecedented rate. According to a recent report by the U.S. Census Bureau, the growth rate of construction funding for computer and electrical manufacturing is remarkably high. The amount of money the government is pouring into this industry in 2024 alone is equivalent to the total of the previous 27 years combined.

Due to the substantial funding provided by the U.S. CHIPS Act, the construction industry in the United States is experiencing explosive growth. Companies such as TSMC, Intel, Samsung, and Micron have received billions of dollars to build new plants in the U.S.

Research by the Semiconductor Industry Association indicates that the U.S. will triple its domestic semiconductor manufacturing capacity by 2032. It is also projected that by the same year, the U.S. will produce 28% of the world’s advanced logic (below 10nm) manufacturing, surpassing the goal of producing 20% of the world’s advanced chips announced by U.S. Commerce Secretary Gina Raimondo. 

Currently, new plant constructions are underway. Despite the enormous expenditures, there have been delays in construction across the United States, affecting plants of Samsung, TSMC, and Intel.

Notably, a previous report from South Korean media BusinessKorea revealed Samsung has postponed the mass production timeline of the fab in Taylor, Texas, US from late 2024 to 2026. Similarly, a report from TechNews, which cited a research report from the Center for Security and Emerging Technology (CSET), noted the postponement of the production of two plants in Arizona, US. Additionally, Intel, as per a previous report from the Wall Street Journal (WSJ), was also said to be delaying the construction timetable for its chip-manufacturing project in Ohio.

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(Photo credit: TSMC)

With the United States expected to further restrict China from acquiring advanced GAA (Gate-All-Around) chip architecture capabilities, coupled with reports of poor yield rates in Samsung’s 3nm GAA generation, the semiconductor industry sources cited in a report from Commercial Times state that TSMC’s 3nm FinFET process is enjoying dominance. Reportedly, due to the high demand and limited supply capacity, upstream IC design companies are beginning to report price hikes.

Seven global tech giants, including NVIDIA, AMD, Intel, Qualcomm, MediaTek, Apple, and Google, are set to gradually adopt TSMC’s 3nm process. As per the sources cited in the report from Commercial Times, Qualcomm’s Snapdragon 8 Gen 4, built using TSMC’s N3E process, has seen a price increase of 25% compared to the previous generation, potentially triggering a subsequent trend of price hikes.

Samsung was the first to commence mass production of 3nm chips using the GAA process in June 2022. However, the first-generation N3 node, SF3E, did not achieve significant success and was initially limited to cryptocurrency applications. Subsequently, the yield rate for its own Exynos 2500 chip also fell short of expectations.

Additionally, Google’s Tensor processors, which are manufactured by Samsung, still use Samsung’s 4nm process in their fourth generation. However, it is said in the report that the fifth generation will switch to TSMC’s 3nm process.

In the second half of the year, numerous AI products will be launched in the consumer market. Among the three major players in the mobile chip market, Qualcomm’s Snapdragon 8 Gen 4, MediaTek’s Dimensity 9400, and Apple’s A18 and M4 series will all be built using TSMC’s N3 family. Moreover, Google’s Tensor G5 will also compete in the market.

It is rumored that Qualcomm’s Snapdragon 8 Gen 4 has already initiated the first wave of price increases. The industry sources cited in the report claim that the procurement cost of mobile chips was already high, with last year’s flagship 8 Gen 3 costing around USD 200. This year’s flagship chip might exceed USD 250. Whether competitors will follow suit remains to be seen.

However, industry sources cited by the report also point out that the price increase is within a reasonable range. Compared to the 5nm process, the cost per wafer for the 3nm process is about 25% higher. This increase does not yet take into account overall wafer quantities and design architecture factors.

TSMC President C.C. Wei has also revealed that TSMC products are highly power-efficient and have better yield rates. When considering the cost per chip, TSMC is the most cost-effective.

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(Photo credit: TSMC)

According to sources cited in a report from Reuters, it’s said that IC design giant MediaTek is developing an ARM-based PC chip that will run Microsoft’s Windows operating system.

Last month, Microsoft unveiled a new generation of laptops featuring ARM-based chips, which provide sufficient computing power to run AI applications. Its executives stated that this represents the future trend of consumer computing. MediaTek’s latest development of an ARM-based PC chip is said to be geared toward these types of laptops.

The same report indicates that Microsoft’s move plans to take aim at Apple, which has been using ARM-based chips in its Mac computers for about four years. Microsoft’s decision to optimize Windows using ARM-based chips could further pose a threat to Intel’s long-standing dominance in the PC market.

Regarding this matter, both MediaTek and Microsoft declined to comment.

Reportedly, according to industry sources, MediaTek’s PC chip is scheduled to launch by the end of next year, coinciding with the expiration of Qualcomm’s exclusive agreement to supply chips for laptops. MediaTek’s chip, based on ARM’s existing designs, will significantly accelerate the development process by less design work.

It is currently unclear whether Microsoft has approved MediaTek’s PC chip for supporting the Copilot+ feature in Windows programs.

ARM executives have stated that one of their clients used ready-made components to complete a chip design in about nine months, although this client was not MediaTek. For experienced chip designers, creating and testing advanced chips typically takes more than a year, depending on the complexity.

In the latest press release from TrendForce, MediaTek’s strategy in the PC domain is also highlighted. Reportedly, the Arm chip co-developed by MediaTek and NVIDIA, with adoption of Wi-Fi 7 and 5G, is also slated to occupy a spot in the AI NB market since 2Q25, and initiate a new wave of technical innovation after 2025. According to TrendForce’s forecast, Arm chips are likely to surpass 20% in market penetration at an accelerated velocity in 2025.

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(Photo credit: MediaTek)

Amid tightening U.S. chip export controls to China, Shanghai-based AI chip companies, MetaX and Enflame, have rumored to downgrade chip designs to TSMC in late 2023 in order to comply with the U.S. export requirements, according to a report by Reuters on 5 June.

Regarding this rumor, TSMC declined to comment, Reuters stated.

In recent years, the U.S. has continuously introduced measures to limit China’s access to high-end chips, chip manufacturing equipment, and advanced processors.

MetaX and Enflame, which formerly claimed that their chips can rival NVIDIA’s GPUs, are recognized as “Little Giants,” a title given to startups with potential for development in key areas and valued by the Chinese government.

MetaX was founded in 2020 by former senior executives from AMD and has multiple R&D and wafer fab projects in China. Citing sources familiar with the matter, Reuters disclosed that the company reportedly developed a downgraded product, C280, in order to be manufactured by TSMC, while its inventory of its most advanced GPU, C500, was sold out earlier.

Enflame, established in 2018, counts Chinese tech giant Tencent among its backers and raised $2.7 billion last year. The company sells its products to state-owned enterprises and collaborates on projects with various local governments, Reuters reported.

In October last year, the U.S. Commerce Department’s Bureau of Industry and Security (BIS) announced a new package of export control measures, and giving specific details on the chip specifications under restriction. For instance, any chip with a total processing performance of 4,800 or higher, or a performance density of 5.92 or more, is prohibited from being shipped to China.

For context, GPU giant NVIDIA’s A100 and the even more potent H100, were banned from export to China in late 2022. The less powerful A800 and H800 chips, tailored by NVIDIA for the Chinese market, were also subject to bans last October. According to a report by Asia Times, A800’s performance is approximately 70% of the A100’s.

(Photo credit: TSMC)

Qualcomm President & CEO Cristiano Amon, at COMPUTEX 2024, showcased devices powered by Snapdragon X Elite and Snapdragon X Plus processors, claiming them to be the only PCs capable of delivering Copilot+ PC experiences. Afterwards, during a media briefing, he disclosed Qualcomm’s plans on a dual-sourcing production strategy, indicating that the cooperation with Samsung has been considered, Korean media outlet Business Korea reported.

According to a previous report by Wccftech, Qualcomm’s Snapdragon 8 Gen 4, targeting to be launched in October, is rumored to utilize TSMC’s N3E node. However, the possibility of diversifying the production sources for Qualcomm’s “Snapdragon 8 Gen 5” smartphone chip has recently become a hot topic.

Regarding Qualcomm’s potential dual-sourcing policy, Amon emphasized that the primary focus should be on TSMC’s foundry production. However, he expressed willingness to collaborate with both TSMC and Samsung Electronics, according to Business Korea.

Initially, Samsung’s foundry was tasked with producing the first-generation Snapdragon 8 chip. However, it is rumored that overheating issues prompted Qualcomm to assign the following generations to be manufactured by TSMC.

Nonetheless, according to Business Korea, the recent launch of the Snapdragon X Elite, extensively integrated with Microsoft’s CoPilot+ PC, has sparked greater demand, which has prompted Qualcomm to reassess its collaboration with Samsung.

According to a previous report by Wccftech, it is likely that the Samsung’s 2nm technology will be utilized for the Snapdragon 8 Gen 5 in the Galaxy S26 series.

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(Photo credit: Qualcomm)