In a last-ditch effort before the upcoming board meeting this week, Intel is said to be seeking assistance from the U.S. government. The latest report by CNBC notes that Intel CEO, Pat Gelsinger, turned to Commerce Secretary Gina Raimondo recently, expressing his disappointment with the heavy dependence of U.S. companies on TSMC, the Taiwanese foundry heavyweight.

According to CNBC, after meeting with Intel, Raimondo followed up by meeting with several public market investors to emphasize the significance of U.S. chip manufacturing amid the rising geopolitical risks surrounding Taiwan. Her aim was to encourage shareholders in companies like NVIDIA and Apple to understand the economic advantages of having a U.S.-based foundry capable of producing AI chips, the sources cited by the report said.

Interesting enough, Jensen Huang, CEO of NVIDIA, mentioned yesterday that the U.S. chip giant heavily relies on TSMC for producing its most important chips, saying TSMC’s agility and ability to respond to demand are incredible. Thus, shifting orders to other suppliers could reportedly lead to a decline in chip quality.

Intel has introduced its Lunar Lake processors in early September, with the target to shake up the AI PC market. However, the chips are outsourced to TSMC, manufactured with the foundry giant’s 3nm node.

Getting stuck in its current situation, Intel is said to be pushing U.S. officials to expedite the release of funding, another report by Bloomberg notes. Earlier in April, Intel and Biden administration announced up to USD 8.5 billion in direct funding under the CHIPS Act.

The company is slated to receive USD 8.5 billion in grants and USD 11 billion in loans under the 2022 Chips and Science Act, but this funding is contingent on meeting key milestones and undergoing extensive due diligence, according to Bloomberg. Therefore, like other potential beneficiaries, Intel has not yet received any money.

An official cited by CNBC said that disbursements are anticipated by the end of the year.

Both the U.S. Commerce Department and an Intel spokesperson declined to comment, according to CNBC.

Regarding the latest development of Intel’s plan to shedding more than 15% of its workforce, a report by CTech notes that Intel may lay off over 1,000 employees in Israel as global cuts begin.

CTech states that Intel has been mindful of geopolitical factors and the timing of local holidays in Israel. Therefore, it would be rather unexpected for the company to initiate layoffs in the country before or during the holiday season, which begins in early October and extends through most of the month.

Citing Gelsinger’s remarks, the report notes that the restructuring process will continue until the end of the year, allowing Intel’s Israeli branch a window of time to start the layoffs after the holidays.

Read more

• [News] CEO Jensen Huang Highlights Strong Demand, Stating that Everyone is Counting on NVIDIA
• [News] Intel Reportedly Outsources All Sub-3nm Process Production to TSMC

(Photo credit: Intel)

On September 9, Indian tech blog PiunikaWeb cited a report from Tech & Leaks Zone, stating that rumors have hinting at Google’s preparation to exit Samsung Electronics’ wafer foundry business, Samsung Foundry, and switch to TSMC in 2025. The next two generations of Google’s custom Tensor processors are reportedly expected to use TSMC’s 3nm and 2nm processes, respectively.

As per the same report, Google’s Tensor G4 processor is being manufactured by Samsung Foundry using its 4nm process. However, the G4 offers only a slight upgrade compared to the Tensor G3 in the Pixel 8 smartphone, as the G4 continues to use Samsung’s older FO-PLP packaging technology instead of the newer FO-WLP packaging, which is more capable in preventing overheating.

On the other hand, Google’s Tensor G5, which will be used in the Pixel 10, is reportedly set to be manufactured by TSMC using the latest 3nm process and TSMC’s advanced InFO-POP packaging technology. The Tensor G6, which will support the Pixel 11 series, will also be produced by TSMC using 2nm process.

Notably, Apple had introduced an AI technical document in June, disclosed that two AI models supporting “Apple Intelligence” were trained in the cloud using Google’s custom-designed Tensor Processing Unit (TPU).

Per Google’s official website, the cost of using its most advanced TPU can be less than USD 2 per hour if reserved three years in advance. Google first introduced the TPU in 2015 for internal use, and it became available to the public in 2017.

Additionally, per a report from wccftech, Google’s ARM-based TPU v5p “Axion,” designed specifically for data centers, is also rumored to be manufactured using TSMC’s enhanced 3nm process, N3E.

Read more

• [News] Google’s Tensor G5 Reportedly Manufactured with TSMC’s 3nm and InFO-POP Packaging
• [News] Breaking Apple’s Monopoly – TSMC’s InFO Packaging Reportedly Adds Google Chips

(Photo credit: Google)

As silicon photonics has become a key technology in the AI era, semiconductor giants, including Intel and TSMC, have joined the battlefield. Now another tech giant has engaged in the war, while U.S. chip giant AMD is reportedly seeking silicon photonics partners in Taiwan, according to local media United Daily News.

According to the report, AMD has reached out to Taiwanese rising stars in the sector, including BE Epitaxy Semiconductor and best Epitaxy Manufacturing Company. The former focuses on the design, research and development of silicon photonics platforms, while the latter possesses MOCVD machines to produce 4-inch and 6-inch epitaxy wafers.

Regarding the rumor, AMD declined to comment. Recently, the AI chip giant announced a USD 4.9 billion acquisition of server manufacturer ZT Systems to strengthen its AI data center infrastructure, with the aim to further enhance its system-level R&D capability. Now it seems that AMD is also eyeing to set foot in the market, as silicon photonics is poised to be a critical technology in the future.

Earlier in July, AMD is said to establish a research and development (R&D) center in Taiwan, which will focus on several advanced technologies, including silicon photonics, artificial intelligence (AI), and heterogeneous integration.

Here’s why the technology matters: As chipmakers keep pushing the boundaries of Moore’s Law, leading to increased transistor density per unit area, signal loss issues inevitably arise during transmission since chips rely on electricity to transmit signals. Silicon photonics technology, on the other hand, by replacing electrical signals with optical signals for high-speed data transmission, successfully overcomes this challenge, achieving higher bandwidth and faster data processing.

On September 3, a consortium of more than 30 companies, including TSMC, announced the establishment of the Silicon Photonics Industry Alliance (SiPhIA) at SEMICON.

According to a previous report by Nikkei, TSMC and its supply chain are accelerating the development of next-generation silicon photonic solutions, with plans to have the technology ready for production within the next three to five years.

AMD’s major rival, NVIDIA, is reportedly collaborating with TSMC to develop optical channel and IC interconnect technologies.

On the other hand, Intel has been developing silicon photonics technology for over 30 years. Since the launch of its silicon photonics platform in 2016, Intel has shipped over 8 million photonic integrated circuits (PICs) and more than 3.2 million integrated on-chip lasers, according to its press release. These products have been adopted by numerous large-scale cloud service providers.

Interestingly enough, Intel has also been actively collaborating with Taiwanese companies in the development of silicon photonics, United Daily News notes. One of its most notable partners is LandMark Optoelectronics, which supplies Intel with critical upstream silicon photonics materials, such as epitaxial layers and related components.

Read more

• [News] Silicon Photonics Reshapes the Future; TSMC, ASE Ready to Seize Market Share
• [News] TSMC’s Latest Advancements in CFET, 3D Stacking, and Silicon Photonics

(Photo credit: AMD)

Grappling with a series of operational challenges, Intel has been weighing options to stem losses, with cost reduction being one of its major focus. Under this scenario, the decisions the semiconductor giant has made include slashing 15% of its workforce and the cancellation of its 20A process, which can help avoiding the significant capital expenditures needed to scale the node to full production.

In addition to the aforementioned moves, rumors have been circulating regarding the progress of Intel’s global expansion, hinting that the projects at Germany and Penang might be put on hold. Moreover, though granted with USD 8.5 billion in grants and USD 11 billion in loans under the Chips and Science Act, the company has not yet received any money from the U.S. authority, raising concerns on the feasibility of its ongoing Arizona and Ohio projects.

Here is a roundup of Intel’s major expansion projects which have been reportedly delayed, scaling down, or put on hold recently, as cost considerations may be the primary reason.

Accompanied by construction crews on Oct. 12, 2023, Intel CEO Pat Gelsinger toured the company’s two new fabrication plants being built in Chandler, Arizona. (Credit: Intel)

US: Ohio Delayed for 2 Years, with Mass Production Expected in 2027-28

Intel plans to invest USD 100 billion over the next five years in new fabs and expansions across Arizona, New Mexico, Ohio, and Oregon, creating 10,000 manufacturing jobs and 20,000 construction jobs.

However, according to a previous report by The Register, the construction of Intel’s two fabs in Arizona has progressed more slowly than anticipated. Rising costs for materials and labor, combined with a surge in investments in the state, have resulted in a shortage of workers.

Citing Nikkei, the report notes that the cost of constructing a plant in Arizona is now four to five times higher than in other regions, such as Asia, and several times more than the initial budget Intel had anticipated.

The semiconductor giant’s Fab 52 and Fab 62 in Arizona are previously scheduled to be completed in 2024. However, The Register notes that the schedule may be delayed a bit, as the fabs are likely to begin operations later this year or in early 2025, targeting to manufacture chips using Intel’s next-generation Angstrom-era process technology, including the 18A node.

The 20 billion project in Ohio, on the other hand, may be facing larger obstacles as Intel has delayed the plan due to market downturns and delays in U.S. subsidies.

With an initial plan to begin chip manufacturing in Ohio in 2025, the company has now postponed the pipeline, aiming to complete the two fabs in 2026–2027, with operations expected to commence around 2027–2028.

EMEA: Hard-hit Area as Investments on Hold in Israel, France and Italy

The situation is not too optimistic in Europe, neither. According to a report from global media outlet Volksstimme, the construction of Intel’s Fab 29.1 and Fab 29.2 near Magdeburg, Germany, which may totaling 30 billion euros, has been postponed due to pending approval of EU subsidies and the need to remove and reuse black soil. The date of commencement has been pushed from summer 2024 to May 2025.

It is reported that Intel’s fabs in Germany were originally scheduled to start operations by late 2027 and were expected to employ advanced manufacturing processes, potentially Intel 14A (1.4nm) and Intel 10A (1nm) nodes. However, Intel now estimates that it will take four to five years to build these plants, and production is expected to commence between 2029 and 2030.

In addition, earlier in June, the struggling semiconductor giant also put a halt to the expansion of a major factory project in Israel, which was set to invest an additional USD 15 billion in a new chip plant, according to The Times of Israel.

In December, Intel had announced plans to increase its investment in the chip manufacturing plant in Kiryat Gat, from USD 10 billion to USD 25 billion, in order to secure a USD 3.2 billion grant from the Israeli government. However, it has now suspended the plan, suggesting that “managing large-scale projects, especially in our industry, often involves adapting to changing timelines,” the report states.

It is also worth noting that Intel tends to scale down on its production in the EMEA area, as in June, the company announced the sale of a 49% stake in its plant in Leixlip, Ireland, to Apollo Global Management for USD 11 billion, securing more external funding for usage.

Another report by POLITICO in July also notes that the U.S. semiconductor giant has discreetly suspended several investment plans in Europe after incurring significant losses, dealing a setback to Europe’s push to produce more microchips.

In 2022, Intel announced an initial investment of over €33 billion for R&D and Manufacturing in EU, targeting countries including France, Germany, Ireland, Italy, Poland and Spain. However, the report suggests that the promised investments for France and Italy, valued at billions of euros and potentially creating thousands of jobs, will be put on hold for now.

Asia: New Packaging Project in Malaysia Suspended

The latest of Intel’s moves on halting its global expansion would probably be the cancellation of its new chip packaging and testing project in Penang as part of cost-cutting efforts, while the operations of existing facilities will remain unaffected.

The U.S. chip giant had announced three years ago that it would invest approximately USD 7 billion to build new chip packaging and testing facilities in Malaysia, looking to make the site its largest overseas packaging and testing base. Per a report by Malaysia media outlet The Star, Intel employs around 14,000 people in Malaysia, meaning over 2,000 local employees may face the risk of job loss.

Would the series of emergency measures taken by the struggling giant stem the bleeding? Or would these moves more like a cornered beast fighting out of its way? The only thing for sure now may be that Intel would have a pretty different look after the upcoming board meeting in mid-September.

Read more

• [News] Qualcomm Rumored to Consider Acquiring Parts of Intel’s Chip Design Business, with a Focus on PC Segment
• [News] Amidst Rumors of Germany Plant Delay, Intel’s Penang Project Also Reportedly on Hold

In late August, it is said that the Netherlands mulls to ban ASML, the country’s semiconductor equipment giant, from conducting equipment maintenance and providing related backup components in China. Now the latest regulation has been revealed, as the Dutch government announced last Friday the expansion of export restrictions on advanced semiconductor manufacturing equipment, which covers two of ASML’s DUV immersion lithography systems, according to a report by CNBC.

The new export control rule, which took effect on September 7^th, indicates that ASML will now have to apply for licenses with the Hague rather than the US authority for some of its machines, as the Dutch government regards these curbs as a critical measure for national security, and attempts to gradually take the initiative rather than following the U.S., a report by Bloomberg notes.

According to the official announcement made by ASML, the new rule will require its TWINSCAN NXT:1970i and 1980i DUV immersion lithography systems to obtain a license from the Dutch government before being exported. The Dutch export license requirement is already in place for ASML’s TWINSCAN NXT:2000i and subsequent DUV immersion systems.

Regarding ASML’s sales in lithography units in the second quarter of 2024, China emerged as the largest market, as it contributed 49% of the revenue, higher than South Korea’s 28% and Taiwan’s 11%.

Interesting enough, ASML refers to the updated license requirement as “a technical change,” and is not expected to have any impact on the company’s financial outlook for 2024 or for its longer-term scenarios.

The latest move from the Dutch government is less harsh than the rumors earlier, which indicated that the Netherlands might ban ASML from conducting equipment maintenance and providing related backup components in China. The measure, if implemented, would be a heavy blow to China’s semiconductor industry, especially on the development of advanced nodes.

In response, China has expressed “dissatisfaction” with the Dutch government’s decision to expand export controls on ASML chipmaking equipment, according to the statement by the Chinese commerce ministry on Sunday, cited by Reuters.

The ministry urged the Dutch government not to misuse export controls, to avoid actions that could harm Sino-Dutch cooperation in the semiconductor industry, and to protect the “shared interests of Chinese and Dutch enterprises,” according to Reuters.

Beijing has consistently been criticizing Washington’s approach of pressuring allies like the Netherlands and Japan to implement export controls aimed at limiting China’s access to advanced chips and chipmaking equipment.

Read more

• [News] ASML Claims the World Counts on China for Legacy Chips; So Do Chip Equipment Giants
• [News] ASML Might Not Be Able to Provide Advanced Chipmaking Maintenance Services to China as Early as 2025

(Photo credit: ASML)