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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• [News] Samsung Fails to Secure Qualcomm’s 3nm Orders for the Coming Year, Dual Foundry Strategy Postponed

(Photo credit: Qualcomm)

The 2024 Computex Taipei has kicked off, with NVIDIA CEO Jensen Huang delivering a speech on the industry’s prospects and future amidst the AI wave. According to a report from Commercial Times, during a media interview on the evening of June 3, Huang revealed plans for NVIDIA to establish an R&D center in Taiwan within the next five years.

Jensen Huang pointed out that NVIDIA already has a great AI research team. He confirmed the importance of Taiwanese partners, stating that TSMC is very important to NVIDIA’s operations, as well as expressing gratitude to partners such as Foxconn, Quanta, and ASUS for their support.

Huang further mentioned that within the next five years, NVIDIA will set up a large design center in Taiwan, indicating that the GPU giant is looking for a very spacious location and will hire at least 1,000 engineers.

When asked by the media about the speculation regarding his meeting with AMD CEO Lisa Su, Huang revealed that he did not attend her speech but acknowledged that AMD is a great company. He mentioned that he doesn’t expect to meet Su but didn’t rule it out the possiblity completely, adding that if it happens, he would welcome it.

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• [News] A Recap of NVIDIA’s Four Major Application Areas of New Technology from Jensen Huang
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(Photo credit: AMD)

According to TianYanCha.com, the third phase of the National Integrated Circuit Industry Investment Fund Co., Ltd. has recently been established in China. The legal representative is Zhang Xin, with a registered capital of RMB 344 billion.

The fund’s business scope includes private equity fund management, venture capital fund management services, and activities such as equity investment, investment management, and asset management through private equity funds, as well as business management consulting.

Shareholder information reveals that the company is jointly held by 19 shareholders, including the Ministry of Finance, China Development Bank Capital, Shanghai Guosheng Group, Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, and Bank of China.

As reported by the Commercial Times, the National Integrated Circuit Industry Investment Fund, known as the Big Fund, was established in 2014. Its aim is to leverage fiscal funds to attract private capital, focusing on key segments of the integrated circuit industry chain, including chip design, manufacturing, packaging and testing. The fund’s overall plan spans 15 years, highlighting a long-term strategic investment perspective.

The Big Fund not only provides financial support but also integrates resources, guides private capital investment, and promotes cooperation within the industry chain. These efforts have significantly enhanced the overall competitiveness of China’s integrated circuit industry. The fund plays a crucial role in advancing strategic national industries, accelerating industrial restructuring and upgrading, and strengthening national competitiveness.

The first phase of the National IC Industry Investment Fund, established in 2014, had a scale of approximately RMB 130 billion. Its primary goal was to support the development of the domestic semiconductor industry and reduce reliance on foreign chip technology. Public data indicates that its investments were distributed approximately as follows: 67% in integrated circuit manufacturing, 17% in design, 10% in packaging and testing, and 6% in equipment and materials, highlighting the manufacturing sector as a key focus.

The second phase of the National IC Industry Investment Fund was launched in 2019 with a scale of about RMB 200 billion, significantly larger than the first phase. While continuing to support the semiconductor industry, the second phase places greater emphasis on the upstream and downstream segments of the industry chain, including IC design, manufacturing, packaging, testing, and the R&D of related equipment and materials.

▲The detailed information of the National Integrated Circuit Industry Investment Fund Phase Three Co., Ltd. as shown on TianYanCha.com.

(Photo credit: SMIC)

According to Taiwan’s Economic Daily News, UMC has recently engaged in discussions with global giants such as Texas Instruments and Infineon about long-term cooperation plans. Additionally, Taiwan’s two leading IC design companies, MediaTek and Realtek, have seen their inventories of WiFi 6/6E chips depleted, prompting them to increase their orders with UMC.

TrendForce recently reported that the White House announced on May 14th the imposition of additional tariffs on semiconductor products manufactured in China. This move has accelerated a shift in supply chain orders, leading Taiwanese foundries to receive increased orders, boosting capacity utilization beyond expectations.

For the second half of this year, Vanguard’s capacity utilization is expected to rise above 75%, PSMC’s 12-inch capacity utilization will reach 85-90%, and UMC’s overall capacity utilization will settle between 70-75%.

UMC’s orders from overseas clients are largely driven by the U.S. tariffs on Chinese semiconductor imports, which are projected to double to 50% by 2025. This has spurred a wave of supply chain relocations, with UMC leveraging its diverse manufacturing footprint to attract long-term cooperation plans from companies like Texas Instruments, Infineon, and Microchip.

From the perspective of Taiwanese market, UMC has benefited from a recent recovery in the networking sector. Taiwan’s top two WiFi 6 chip suppliers, MediaTek and Realtek, responding to customer restocking demands, have begun to increase their orders for WiFi chips with UMC.

Recent revenue data from Realtek indicates a rebound in the networking market. In April, Realtek’s consolidated revenue reached NT$10.068 billion, a 11.4% increase month-over-month and a 21.9% increase year-over-year, marking the first time in 20 months that monthly revenue has surpassed NT$10 billion.

MediaTek’s consolidated revenue in April was NT$42.028 billion, a 16.74% decrease month-over-month, yet still the second highest on record for the period, with a 48.25% year-over-year increase. Foundry sources indicate that MediaTek has placed additional orders for the third quarter, suggesting that networking customers are set to upgrade specifications this year.

UMC’s consolidated revenue in April was NT$19.741 billion, up 8.67% month-over-month and 6.93% year-over-year, reaching a 16-month high. UMC previously projected that as inventories in the computer, consumer, and communication sectors return to healthier levels, overall wafer shipments would see a slight increase this quarter. However, in the automotive and industrial sectors, slower-than-expected inventory digestion has kept demand subdued.

(Photo credit: UMC)