Last week, semiconductor giant Intel reported weak quarterly earnings, with announcements made on a massive 15% cut of workforce and an over 20% reduction on capital expenditures in 2024. Now the company seems to make up its mind on cost-cutting, as it has started notifying attendees that its fall Innovation 2024 trade show has been postponed, according to a report by AnandTech.

The event, which is previously scheduled in late September, is now rescheduled for some time in 2025, according to a message the company posted on the Innovation 2024 website. However, Intel did not provide a clear timeline for when the event will return.

In a message posted on the Innovation 2024 website, Intel confirmed the postponement. Instead of the larger event, it plans to hold smaller developer gatherings.

According to the message, for the remainder of 2024, Intel will continue to host smaller, more targeted events, webinars, hackathons and meetups worldwide through Intel Connection and Intel AI Summit events, as well as have a presence at other industry moments.

According to another report by PCMag, Intel explained the reason for the postponement further, saying that given the company’s financial results and outlook for the second half of 2024, which is tougher than previously expected, it is having to make some tough decisions as it continue to align its cost structure and look to assess how it rebuild a sustainable engine of process technology leadership.

AnandTech further notes that the event, which has been hosting since 2021, is Intel’s regular technical event for developers, customers, and the public, serving as the successor to the company’s iconic IDF (Intel Developer Forum) show. However, without providing a clear timeline for when the Innovation event will return, its future is now uncertain.

In its Innovation event 2023, Intel introduced Meteor Lake, the first chips built on Intel’s 4 process (4nm) with a dedicated AI coprocessor inside.

Now, a few days after Intel revealed the progress on its next-gen 18A process, which is aimed for start production in 2025, the event has been postponed. The move also makes the public wonder about whether its next-gen processors, Panther Lake (AI PC client processor) and Clearwater Forest (server processor), will be released on schedule.

On the other hand, PCMag notes that the Innovation event could have provided Intel executives with a platform to address the controversy surrounding a CPU bug that can permanently damage 13th and 14th Generation Core desktop chips.

Regarding the issue, Intel has now extended the warranty by two full years on 24 different 13th Gen and 14th Gen desktop chips, including Core i5, Core i7, and Core i9 models, after determining that many CPUs based on its Raptor Lake architecture are vulnerable to permanent damage. The problem stems from excessive voltage, causing some CPUs to degrade irreversibly.

Read more

• [News] Intel’s 18A to Start Production in 2025, Featuring Processors for AI PCs and Servers
• [News] Intel’s Earnings Fall Short, Cutting Over 15% of Workforce

(Photo credit: Intel)

According to a report from The Chosun Daily, major tech companies like NVIDIA are considering using Intel’s foundry services (IFS) as an alternative due to TSMC’s packaging capacity shortages. While packaging is a core competency for semiconductor foundries, Samsung, which is facing difficulties in attracting customers, will need to exert maximum effort to secure orders.

It’s highlighted by the report that the demand for AI accelerators is growing rapidly, but TSMC’s AI chip production capacity is unable to keep up.

Furthermore, per The Chosun Daily citing sources, major clients like NVIDIA and Apple have secured TSMC’s 3nm advanced process capacity, pushing order backlogs into 2026.

Therefore, major tech companies seeking alternatives are turning to Intel’s IFS. Since Intel’s Foveros is said to be comparable to TSMC’s CoWoS-S, it has made Intel’s advanced packaging a viable option to ensure supply.

TSMC and Intel offer advanced packaging services to customers under the names CoWoS and Foveros, respectively. Both CoWoS and Foveros are advanced packaging technologies that connect two or more semiconductor chips on a wafer and then place them onto a packaging substrate.

Reportedly, in addition to NVIDIA and Microsoft, Amazon and Cisco are considering outsourcing to Intel Foundry to reduce their dependence on TSMC.

The report further emphasizes that this market trend is likely to cause anxiety for Samsung, which competes with TSMC and Intel in advanced processes.

Recently, Samsung’s former clients, Google and Qualcomm, have chosen TSMC, while Intel, seen as a latecomer, is catching up by securing advanced packaging orders from major tech companies, potentially narrowing the gap with Samsung.

Kim Hak-sung, head of Hanyang Institute of Smart Semiconductor, said that packaging is a technology that critically influences customer acquisition in the AI semiconductor era, where various types of chips are interconnected.

He noted that although there may not be a substantial technical capabilities difference between Samsung Electronics and Intel, as mass production experience allows the process to stabilize and become more appealing to customers.

Kim eventually addressed that to stay competitive, Samsung needs to focus on capturing the volumes that TSMC cannot accommodate, positioning itself ahead of Intel.

Read more

• [News] TSMC Reportedly to Raise 3nm & 5nm Prices Soon, Looking to Maintain Long-Term Profit Margins 
• [News] Major Clients Reportedly Fully Allocate TSMC’s Production Capacity Until 2026, 3nm Process in High Demand
  

(Photo credit: Samsung)

AI industry has been driving semiconductor industry to advance forward. Benefited from the surge in AI-driven demand for advanced process chip, foundry industry is experiencing a gradual turnaround, while demands for consumer chip and automotive chip have not yet fully recovered, and competition remains fierce in the mature process chip sector, representing a stark contrast within the wafer foundry industry.

• Financial Results Indicate Strong AI Development but Weak Automotive Terminal Demands

Recently, several major foundries released their Q2 financial reports and shared outlook on future market conditions.

For the second quarter ending June 30, TSMC reported consolidated revenue of approximately USD 20.82 billion, up 32.8% YoY and 10.3% QoQ, which was attributed to strong demand for its 3nm and 5nm technologies.

As per the financial report, revenue from advanced technologies (7nm and below) accounted for 67% of TSMC’s total wafer revenue in 2Q24. In terms of application areas, HPC has replaced mobile business as the core driver of the company’s growth, contributing 52% of revenue.

Additionally, although TSMC’s automotive electronics revenue grew 5% QoQ, the company warned of a potential downturn in the automotive market this year.

UMC reported Q2 revenue of TWD 56.8 billion, up 4% QoQ. UMC expected customer inventories in the communications, consumer electronics, and computer sectors to return to seasonal levels as usual in the second half of this year, and to reach healthy levels by the end of the year.

However, demand in the automotive end market remains weak, which may extend the period of inventory adjustment, with healthy levels anticipated only by the first quarter of next year.

On August 6, GlobalFoundries released its latest financial report.

In the second quarter of this year, the company achieved revenue of USD 1.63 billion, a year-on-year decrease of 12% and a quarter-on-quarter increase of 5%. Net profit was USD 155 million, a year-on-year decrease of 35% and a quarter-on-quarter increase of 16%.

Industry sources cited by the report from WeChat account DRAMeXchange believe that during the pandemic, customers in sectors such as IoT, mobile device, and data center accumulated high inventory, which impacted GlobalFoundries’ revenue.

Moreover, the company is experiencing a cyclical downturn due to soft demands in the automotive, industrial, and other sectors.

• Advanced Processes Continue to Thrive while Mature Processes Face Intense Competition

The adoption of AI generative models keeps on the rise, driving high demand for AI chip. In this context, advanced processes have been well-received, leading to price increase and production expansion.

TrendForce’s survey in June showed that TSMC is seeing full capacity utilization in its 5/4nm and 3nm nodes due to strong demand from AI applications, new PC platforms, HPC applications, and high-end smartphones.

Its capacity utilization is expected to exceed 100% in the second half of the year, with visibility extending into 2025. Given cost pressures from overseas expansion and rising electricity prices, TSMC plans to raise prices for its advanced processes, which are experiencing strong demand.

TSMC is seeing full capacity utilization in its 5/4nm and 3nm nodes due to strong demand from AI applications, new PC platforms, HPC applications, and high-end smartphones. Its capacity utilization is expected to exceed 100% in the second half of the year, with visibility extending into 2025.

Given cost pressures from overseas expansion and rising electricity prices, TSMC plans to raise prices for its advanced processes, which are experiencing strong demand.

As per other sources cited by the same report, TSMC informed customers of a price increase for 5/3nm process products in 2024 at the beginning of this year.

In late July, TSMC notified several customers that due to rising costs, prices for 5/3nm process products will increase again starting January 2025, and the increase will range from 3-8%, depending on the tape-out plan, product, and partnership.

Meanwhile, the surge in demand for advanced packaging driven by AI will also lead to higher CoWoS prices.

To seize the significant opportunities brought by AI, many companies are actively investing in advanced processes. Currently, the 3nm process is the most advanced in the industry.

Meanwhile, TSMC, Samsung, Intel, and Rapidus are vigorously promoting the construction of 2nm fabs. Previously, TSMC and Samsung intended to produce 2nm chip at scale in 2025, while Rapidus planed to start trial production in 2025.

Following 2nm, 1nm chip will be the next goal for these fabs. According to their plans, the industry is likely to see the mass production of 1nm chip from 2027 to 2030.

Unlike the rising prices and volume in advanced process chip, mature process chip faces some uncertainty due to weaker-than-expected recovery in end-user demand, and sees more intense competition among manufacturers.

TrendForce’s survey reveals that the capacity utilization rates of PSMC and Vanguard is expected to improve more than anticipated in the second half of the year. However, overall demand for mature processes remains weak, with average capacity utilization still around 70–80%—indicating no significant shortages.

TrendForce further pointed out that in 2024, concerns over global inflation and weak recovery in end-demand may result in inconsistent momentum in replenishing inventory. Many foundries might offer price incentives to attract customers and boost capacity utilization, leading to a decline in overall ASP.

Furthermore, a significant amount of new capacity is expected to come online in 2025, including TSMC JASM, PSMC P5, SMIC’s new Beijing/Shanghai plants, HHGrace Fab9, HLMC Fab10, and Nexchip N1A3.

This increase in mature process capacity could intensify competition and impact future pricing negotiations.

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• [News] Intel and NVIDIA’s New Platform Orders Rolling Out, TSMC Unaffected by Market Turbulence
• Foundry Market Shows Mixed Conditions with Price Adjustments for Specific Chinese Processes and Anticipated Price Increases for Taiwanese Advanced Processes, Says TrendForce

(Photo credit: TSMC)

According to a report from wccftech, leading semiconductor foundry TSMC is preparing to increase the prices of its 3nm and 5nm processes. Reportedly, this move is said to maintain its long-term gross profit margin of 53% and secure its leadership position in the semiconductor foundry market.

The report notes that considering the high demand for AI, along with orders for consumer products from IC design companies like Apple and Qualcomm, TSMC’s production capacity remains tight.

Therefore, TSMC is reportedly planning to increase the prices of its advanced processes, such as 3nm and 5nm, by 8%, thereby ensuring stable long-term profit margins. Notably, a previous report from Commercial Times have cited sources, indicating that NVIDIA CEO Jensen Huang once agreed that TSMC’s pricing is too low and will support its price increase actions.

Although the price increase has been rumored for some time, the sources cited by wccftech indicate that TSMC may implement the hike soon.

Currently, TSMC’s 3nm and 5nm process utilization rates are at 100%, indicating complete market dominance in these processes. This already allows TSMC to profit significantly, and the price increase will further benefit their operations.

In addition to advanced processes, there are rumors that TSMC is also raising the price of CoWoS packaging due to the massive demand for AI chips from AMD and NVIDIA. Although specific figures have not been disclosed, TSMC’s rapid expansion of its CoWoS production lines makes the price increase likely.

It’s previously estimated by sources cited in MoneyDJ’s report that TSMC’s CoWoS capacity remains in short supply, at 35,000 to 40,000 wafers per month this year. With the additional outsourced capacity, next year’s production could reach over 65,000 wafers per month, or possibly higher.

Read more

• [News] CoWoS Booming, TSMC Price Hikes Reportedly Imminent
• [News] NVIDIA CEO Jensen Huang Supports C.C. Wei’s Theory and Backs for TSMC to Increase Price

(Photo credit: TSMC)

While surrounded by concerns raised by the USD 1.6 billion net loss in Q2 and the large-scale layoff plan, Intel has finally shared some good news. It announced on August 6^th that its next-gen 18A process has achieved a major milestone, and will start production in 2025.

The semiconductor giant states that the milestone has been achieved less than two quarters after tape-out, and confirms that two of its next-gen products, Panther Lake (AI PC client processor) and Clearwater Forest (server processor), will be fabricated with the node. The first external customer is expected to tape out on Intel 18A in the first half of next year, according to its press release.

The company also gives an advance notice on the progress of the aforementioned two processors. According to Intel, Clearwater Forest will mark the industry’s first mass-produced, high-performance solution combining RibbonFET, PowerVia, and Foveros Direct 3D for higher density and power handling. In addition, Panther Lake DDR memory performance is already running at target frequency.

Earlier in July, Intel released the 18A Process Design Kit (PDK) 1.0, design tools that enable foundry customers to harness the capabilities of RibbonFET gate-all-around transistor architecture and PowerVia backside power delivery in their designs on Intel 18A.

It is worth noting that Intel’s 18A is the company’s second fabrication technology, following 20A, to employ RibbonFET and PowerVia. A report by Tom’s Hardware notes that compared to Intel’s 2nm-class node, 18A offers an optimized RibbonFET design and additional enhancements, resulting in a 10% increase in performance per watt, which makes it especially fitted for data center-class products that require significant power.

The report also notes that Intel 18A is a process that Intel Foundry’s potential customers are very interested in, as some believed it to be more competitive than TSMC’s 3nm and 2nm-class offerings, which are expected to be available between 2024 and 2025.

On the other hand, TSMC, the global foundry leader, said earlier in the earnings call that it’s 2nm (N2) node is progressing well, and will begin mass production in 2025. The company is also on track to launch the N2P and A16 processes in the second half of 2026.

Read more

• [News] NVIDIA’s Backup Plan? Intel Reportedly Secures Packaging Orders from the AI Giant
• [News] Intel’s Earnings Fall Short, Cutting Over 15% of Workforce

(Photo credit: Intel)