Samsung’s foundry business has been facing difficulties with its advanced chip processes, particularly with its 3-nanometer production. According to a report from The Korea Times, the yield for Samsung’s 3nm process remained in the single digits until Q1 this year, causing delays in supplying engineering samples for its Exynos 2500 chipsets.

The same report notes that local analysts estimate Samsung’s yield for its 3-nanometer process improved to about 20% in the second quarter. Despite this progress, the yield rate is still significantly below the 60% threshold generally needed for mass production, creating challenges for the company in securing foundry orders.

Reflecting this situation, Samsung appears to have shifted its strategy for its newest facility, the P4 fab in Pyeongtaek, Gyeonggi Province. Instead of initially installing equipment for NAND and then moving to foundry products, Samsung is now prioritizing advanced DRAM memory production, such as high-bandwidth memory (HBM) chips. Industry sources cited by The Korea Times suggest that this shift comes as a result of weak demand for its foundry services. There is growing speculation that Samsung might even dedicate the P4 fab entirely to memory chip production, driven by the steady demand for HBM and other advanced memory types used in AI servers.

These developments also cast uncertainty on Samsung’s investment in its Taylor, Texas plant. The company had originally planned to begin mass production of 4-nanometer chips there next year, but this has now been pushed back to 2026. Although the yield for the 4nm process is reportedly stable, Samsung continues to face challenges in securing orders from fabless companies.

This situation has led to speculation that Samsung may pivot to focusing on more advanced 2-nanometer chips instead of 4-nanometer ones to attract orders for next-generation products. However, reports indicate that the company is also struggling to achieve high yields for both its 2nm and 3nm processes.

Low yields have been a key factor behind Samsung’s ongoing struggles in its foundry business, according to industry insiders cited by The Korea Times. While the company has managed to stabilize yields for its 4nm process, more advanced nodes like the second-generation 3nm and 2nm processes remain problematic.

Adding to the challenges, a report from Business Korea on September 11th highlighted that continued yield issues with the 2nm process have prompted Samsung to withdraw personnel from its Taylor, Texas plant, marking another setback for its advanced wafer foundry ambitions.

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• [News] Samsung’s 2nm Yield Rate at Most 20%, Withdraws Personnel from Texas Taylor Plant

(Photo credit: Samsung)

For Intel, there are finally some good news around the corner. According to a report by The Register, the EU has approved USD 1.9 billion in aid for the struggling giant’s plant in Poland, but with the condition that the company does not abandon the project amid its crisis.

The information was announced on Friday by Poland’s Deputy Prime Minister Krzysztof Gawkowski, the report notes, that the European Commission has approved a state aid package of USD 1.9 billion (7.4 billion zlotys) for Intel. Citing Gawkowski’s remarks, the report reveals that the investment, including the aid package and overall costs, amounts to more than USD 6.47 billion (25 billion zlotys).

The announcement follows just over a year after Intel revealed its intention to build a USD 4.6 billion assembly and testing facility near Wroclaw, Poland. According to The Register, this project is expected to complement Intel’s other projects in the region and beyond, including its€30 billion chip fabrication plant in Magdeburg, Germany.

According to Intel’s previous announcement, the investment in Poland will contribute to the Europeans goal of bringing back 20 percent of global semiconductor manufacturing capacity to the region by 2030. The company states that its planned back-end manufacturing investment in an assembly and test facility in Poland, combined with the existing fab or front-end chip manufacturing site in Ireland and the planned chip manufacturing site in Germany, will create an end-to-end leading-edge semiconductor manufacturing value chain in Europe.

A rendering shows the state-of-the-art semiconductor assembly/test facility that Intel announced plans to build in Wrocław, Poland. Announced on June 16, 2023, the site will help to meet demand for assembly and test capacity that Intel anticipates by 2027. (Credit: Intel)

However, it is worth noting that due to delays of subsidy approvals. Intel has already been said to postpone its construction of Fab 29.1 and 29.2 in Magdeburg, as the new timeline now pushes the start of construction to May 2025. As the possibility of putting a halt to the German project could not be ruled out amid the company’s crisis, whether a follow-up plan regarding delaying or canceling the Polish plant comes into spotlight.

The Register notes that Intel had previously stated that the Polish facility would employ around 2,000 workers and would be responsible for processing raw wafers produced by nearby fabs, cutting them into individual chips and chiplets for packaging.

If Intel’s Polish project has been carried out as planned, the semiconductor heavyweight may have to wait until the end of the year to access the funds as a few formalities remain, the report points out. For instance, the Polish government still needs to pass certain legislation and meet requirements set by the European Commission before the deal can be finalized.

Regarding the matter, a spokesperson of Intel said that the company values the Polish government’s ongoing support and partnership as the two parties work together towards the shared goal of a more resilient global semiconductor supply chain, according to The Register.

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• [News] Intel Reportedly Sought Commerce Secretary Raimondo’s Help over U.S. Reliance on TSMC
• [News] Uncashed Checks of the Struggling Giant: Intel’s Unfulfilled Expansion Plans in a Nutshell

(Photo credit: Intel)

According to a report by the Central News Agency, China’s Ministry of Industry and Information Technology (MIIT) recently announced a major technological breakthrough: the development of a deep ultraviolet (DUV) lithography machine capable of producing chips at 8 nanometers and below. This technology is currently being promoted for broader application.

Despite initial market speculation that the ArF lithography machine might be suitable for 8nm processes, TrendForce’s latest market analysis suggests otherwise. The machine’s overlay accuracy of ≤ 8nm is inadequate for advanced processes, which require ≤ 3nm for 10nm processes and ≤ 2nm for 7nm processes. Additionally, for advanced processes, the resolution must be ≤ 38nm, while this machine’s resolution is ≤ 65nm, making it challenging to handle even 40nm processes.

On the 9th, the MIIT published a notice on its official website regarding the “Guiding Catalog for the Promotion and Application of Major Technical Equipment (2024 Edition),” urging local governments to enhance the coordination of national support policies across industries, finance, technology, and other sectors.

The MIIT emphasized that major technical equipment is a cornerstone of national strength and security. “China’s first (set of) major technical equipment” refers to equipment products that achieve significant technological breakthroughs domestically, hold intellectual property rights, but have not yet gained substantial market performance. This includes complete machinery, core systems, and key components.

The catalog indicates that, among the integrated circuit production equipment, one notable entry is the “ArF Lithography Machine” (DUV lithography machine). The core technical specifications are a “wafer diameter of 300mm, illumination wavelength of 248nm, resolution ≤65nm, and overlay accuracy ≤8nm.” This means that the domestically produced DUV machine is capable of manufacturing chips of 8 nanometers and below.

Reports suggest that the development of the domestic ArF lithography machine was primarily completed by several leading Chinese semiconductor equipment manufacturers and research institutions. Notably, Advanced Micro-Fabrication Equipment Inc. (AMEC) and Shanghai Micro Electronics Equipment (SMEE) were key participants. The Institute of Microelectronics of the Chinese Academy of Sciences also made significant contributions in this area.

On the 5th of this month, the United States announced tighter export controls on machines required to manufacture advanced semiconductor equipment. The Dutch government followed suit the next day, announcing expanded restrictions on semiconductor manufacturing equipment exports.

Reuters reported that ASML’s 1970i and 1980i DUV lithography machines, which are mid-range models in ASML’s DUV product line, will be impacted by these restrictions on exports to China.

According to a report by Central News Agency, if China successfully achieves domestic production of DUV lithography machines capable of 8-nanometer and below processes, most future chip manufacturing would no longer be dependent on ASML. However, as of now, there has been no official announcement from the Chinese government or manufacturers regarding this development.

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• [Insights] China’s MIIT Unveils Latest Domestic DUV Equipment, Faces Challenges for 40nm Processes
• [News] Breakthrough in China’s Domestic DUV Equipment to 8nm? Experts Call It a Misunderstanding

(Photo credit: AMEC)

Recently, TSMC updated the progress of the expansion of its sub-2nm advanced process. On September 11, Hsu Mao-hsin, Director-General of Taiwan’s Central Taiwan Science Park Administration, announced the expansion of the Taichung Phase 2 park.

Currently, 95% of the land required for TSMC’s plant construction has been secured through agreed purchase prices. The full transaction is expected to be completed by the end of this year, with the land ready for TSMC by the first quarter of next year.

The Phase 2 park covers 89 hectares, of which the Hsingnong Golf Course occupies 67 hectares, representing about 76.8% of the total area and making it the largest landholder. The budget for land acquisition is approximately TWD 23.7 billion.

Currently, there are 111 landowners and structures in the park, with 70% of the owners agreeing to the acquisition, covering 95% of the total area.

In addition to supporting TSMC’s new plant, the rest of around 3 hectares are available for related industries to apply for residency. Several companies in semiconductor supply chain and precision machinery industry have already expressed interest in moving in, and the Central Taiwan Science Park Administration is encouraging IC design companies to join.

Presently, TSMC has concentrated most of its advanced process manufacturing facilities in Taiwan. Aside from three 2nm wafer fabs in its Kaohsiung Nanzi Park, there is also space available to accommodate sub-2nm technology fabs. Industry insiders revealed that Kaohsiung is already preparing for the deployment of the A14 (14 angstrom) process. The first 2nm fab in Nanzi is expected to start mass production in 2025.

Although 2nm product is still absent from the market, their output value is expected to surpass that of 3nm. Insiders indicated that future applications will include HPC (high-performance computing) and smartphone technology sectors.

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• [News] Google’s Tensor G5 Reportedly Manufactured with TSMC’s 3nm and InFO-POP Packaging
• [News] TSMC Strengthens Its Advanced Process with Next-Generation EUV Equipment Reportedly Arriving This Month

(Photo credit: TSMC)

According to a Bloomberg report on September 12, the Chinese government is encouraging local carmakers to export knock-down kits to their overseas factories, where key car components are produced in China and then shipped to the destination markets for final assembly. This strategy aims to avoid punitive tariffs on Chinese cars, while ensuring that advanced EV technologies remain within China.

In recent months, Chinese electric vehicles have faced tariff barriers in Europe and the U.S. On May 14, the White House announced an increase in tariffs on Chinese EV imports to 100%. The European Union imposed additional tariffs on pure electric vehicles from China starting July 4. On August 26, per a report from Reuters, Canada also announced a 100% tariff on Chinese electric vehicles.

To avoid these tariffs, Chinese car manufacturers are setting up production facilities abroad. For instance, BYD signed a USD 1 billion investment agreement with the Turkish government on July 8 to build a factory in Turkey with an annual production capacity of 150,000 electric vehicles, expected to start operations by the end of 2026.

Reportedly, it’s hinted that the new factory may facilitate BYD’s entry into the European market, given Turkey’s customs union agreement with the EU. Turkey also imposed a 40% tariff on Chinese cars in June. Regarding this matter, BYD declined to comment.

The report from Bloomberg also claims that, in July, China’s Ministry of Commerce held a meeting with several car manufacturers.

During this meeting, the Ministry suggested keeping key EV technologies within China and instructed that car manufacturers should avoid making any automotive-related investments in India.

Additionally, companies planning to invest in Turkey were advised to notify both the Ministry of Industry and Information Technology, which oversees China’s EV industry, and the Chinese embassy in Turkey.

The Ministry of Commerce indicated that countries inviting Chinese car manufacturers to set up factories are typically those considering or implementing trade barriers against Chinese vehicles. Officials reportedly advised attendees not to blindly follow trends or trust investment offers from foreign governments.

The Ministry’s guidance to keep critical production within China may hinder the global expansion efforts of these manufacturers, who are seeking new customers to offset intense competition and sluggish domestic sales, factors that are impacting their profitability.

This measure could also affect European countries that have been courting Chinese manufacturers, hoping to attract job opportunities and boost their local economies.

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• [News] EU Plans to Cut Tariffs on China-Made Tesla EVs from 20% to 9%, with Final Decision Expected in October
• [News] Punitive Tariffs on Chinese EVs by US Reportedly to Further Hinder BYD, Leapmotor and Others’ Global Expansion Plan, while EU Investigation Persists

(Photo credit: BYD)