Taiwan experienced a magnitude 7.2 earthquake on the 3rd, prompting round-the-clock repair efforts during the holiday by semiconductor fabs, aiming to restore equipment operations. According to reports from TechNews, the latest progress of various fabs and science parks across different locations is as follows.

TSMC

TSMC stated that the maximum intensity of the earthquake on the 3rd in science parks such as Hsinchu, Longtan, and Zhunan was magnitude 5, while in Central Taiwan and Southern Taiwan science parks, it was magnitude 4. The recovery rate of semiconductor fab equipment has exceeded 80%, with newly built fabs (such as Fab 18 responsible for producing 3 and 5 nanometers wafers) expected to fully recover by the evening of the 4th..

While some equipment in certain areas suffered damage, affecting production lines, major equipment including all EUV machines remained undamaged. In areas with higher seismic intensity, longer time is expected for adjusting and calibrating to restore automated production.

It is believed that this may refer to the advanced packaging stronghold in Longtan, where production process equipment needs reconfiguration due to earthquake evacuation, unstable or disrupted network signals requiring parameter reset, as well as seismic impacts on cleanroom spaces, damaged pipelines, and machinery relocation, all requiring extensive scheduling for repair.

UMC

A spokesperson for UMC indicated that the impact of the strong quake on 12-inch Fab in Southern Taiwan was relatively light, while 8-inch Fab in Hsinchu was more severely affected. The company’s machinery and pipelines remained undamaged, with only instances of machinery displacement, some quartz tube damage, sprinkler head damage, and partial office ceiling damage.

According to market sources cited in the same report, UMC is actively reallocating manpower to reposition machinery in 8-inch Fab, cleaning damaged wafers, and replacing quartz tubes, expecting a recovery time of two to three days, or even a week.

VIS

VIS stated that as of noon on the 4th, about 80% of affected machinery had returned to normal, and production operations would gradually resume. The company promptly informed affected customers upon the earthquake’s occurrence, maintaining close communication and providing detailed information individually.

Hsinchu Science Park Administration

Most major factories including semiconductor and panel manufacturing plants completed equipment recovery from the quake on the 3rd. Although there was some impact on production lines, effective measures were taken by factories such as seismic design for buildings and machinery, personnel evacuation, and preventive machinery shutdowns, resulting in minimal impact on factory operations.

Currently, factories are operating normally, with a few undergoing machine calibration for full recovery in the short term. Manufacturers’ machinery is gradually returning to operation, personnel have resumed their positions, and major wafer manufacturing plants have sufficient materials and are smoothly recovering operations.

Central Taiwan Science Park Administration

In parts of the Central Taiwan Science Park, which mainly focuses on optoelectronics, semiconductors, and precision machinery industries, manufacturers have gradually resumed operations after machinery shutdowns. Among them, over 90% of high-precision machinery in semiconductor fabs have resumed operation, with only some machines undergoing calibration, all expected to complete and operate normally by the end of the 4th.

Southern Taiwan Science Park Administration

As of noon on the 4th, major factories including TSMC, UMC, Innolux and Corning Taiwan in the area have all resumed normal operations. Continuous monitoring of aftershocks and manufacturer dynamics will be maintained, with necessary assistance provided as needed.

(Photo credit: TSMC)

On the morning of the 3rd April, a Richter scale 7.2 earthquake occurred, shaking the entire Taiwan. Semiconductor wafer foundries were also disrupted, and relevant manufacturers have carried out emergency evacuations according to SOP.

According to Money DJ, in response to the earthquake impact, TSMC is currently confirming detailed situations, while UMC has reported partial shutdowns of equipment and is making efforts to resume operations. As for PSMC, related evaluation is underway. The industry believes that the impact on the operations of related companies should be limited.

TSMC stated that, to ensure personnel safety, relevant preventive measures have been initiated according to internal company procedures. Some personnel in certain factory areas have been evacuated, and all personnel are currently safe and gradually returning to their workstations. Detailed situations are yet to be confirmed. Preliminary inspections of factory construction sites have shown normal conditions. For safety considerations, the company has decided to suspend work at construction sites across Taiwan today, and will resume after inspection.

The industry indicates that wafer fab buildings have quite high seismic resistance coefficients, capable of withstanding earthquakes of magnitude 7. However, typically occurring earthquakes of magnitude 3 to 4 may trigger machinery to activate defense mechanisms and auto shutdown. Whether normal operations will be resumed directly after restart, or if other damages occur, will require detailed inspections. Additionally, issues like wafers produced on the production line are partially damaged and ruptured quartz tubes and pipelines will require at least 1 to 2 days for further checking.

(Photo credit: CWA)

Intel revealed on the 2nd that its manufacturing business’s operational losses deepened, dealing a significant blow to Intel’s attempts to surpass TSMC and regain its leading position.

According to Reuters, Intel stated that its manufacturing division incurred a $7 billion loss in 2023, a more severe downturn than the $5.2 billion loss in the previous year, with revenues reaching $18.9 billion, a 31% decrease from the previous year.

In the same report, Intel CEO Pat Gelsinger admitted that 2024 would be the year of worst operating losses for the company’s wafer fabrication business, with the break even expected by 2027.

The primary causes for the losses were attributed to bad decisions, including opposition to using ASML EUV equipment a year ago. The cost of this equipment could exceed $150 million but is more cost-effective than earlier chip manufacturing equipment.

Gelsinger believes that due to these mistakes, Intel has outsourced approximately 30% of its wafer production to external contract manufacturers like TSMC, with a goal to reduce this share to about 20%.

Intel plans to invest $100 billion in constructing or expanding chip factories across four states in the United States and convincing other companies to use Intel’s manufacturing services. Consequently, Intel has begun segregating its wafer foundry business into an independent division and financials, heavily investing to catch up with TSMC and Samsung.

According to TrendForce’s previous report on the fourth quarter of 2023, global semiconductor foundry revenue rankings showed that Intel Foundry Services (IFS), which ranked ninth globally in the third quarter of 2023, was pushed out of the top ten by PSMC and Nexchip due to factors such as the transition between old and new CPU generations and lackluster inventory momentum. At the same time, the top three semiconductor foundries globally were TSMC, Samsung, and GlobalFoundries.

(Photo credit: Intel)

In 2022, Intel engaged in negotiations with the Italian government, planning to invest USD 5 billion in constructing a packaging and testing facility. This project would also receive subsidies from the Italian government, expected to cover 40% of the construction costs, along with additional subsidies or incentives. Furthermore, Intel intended to establish a research and design center in France, expected to create a complete semiconductor supply chain in Europe.

However, according to a report from Reuters, Italian Minister of Industry Adolfo Urso has indicated that Intel may delay or abandon its investment plans in Italy and France to fulfill its prior commitments in Germany. Nonetheless, Italy has not completely given up on attracting Intel; Adolfo Urso emphasizes that Italy remains very welcoming if Intel changes its mind.

On the other hand, according to another previous report from Reuters, the US government is expected to announce a significant grant for Intel’s Arizona project soon. This grant will be part of the USD 39 billion direct appropriations and USD 75 billion loans and guarantees under the “Chip Act.”

Among the recipients of subsidies under the “Chip Act,” Intel is expected to receive the largest subsidy to date. According to a previous report from Tom’s Hardware, Intel is anticipated to receive a government subsidy of USD 10 billion, with TSMC and Samsung potentially included in the latest subsidy list as well.

Samsung Electronics is, according to its own expectation, investing USD 17 billion to construct a foundry in Taylor, Texas, while TSMC is investing roughly USD 40 billion to build a foundry in Phoenix, Arizona. However, there are rumors suggesting that due to the U.S. prioritizing domestic companies, the expected subsidy amounts for Intel may differ from those for TSMC and Samsung.

The U.S. government enacted the “Chip Act” in 2022, but subsidies have been modest, with only three American companies currently benefiting, including BAE Systems, GlobalFoundries, and Microchip Technology.

In order to accelerate the development of the IDM 2.0 initiative, Intel made a significant expansion decision in 2021, investing approximately USD 20 billion in the Octillo campus in Arizona, USA. This investment involved the construction of two new fabs and the implementation of EUV production lines to support Intel’s 20A and Intel’s 18A process technologies. The new Fab 52 and Fab 62 are expected to commence operations in 2024.

Read more

• [News] Intel Submits Conceptual Drawings for Fab Construction in Germany, Installing High-NA EUV Exposure Machines
• [News] GlobalFoundries Reportedly Becomes Third Recipient of CHIPS Act Subsidy, Receives USD 1.5 Billion

(Photo credit: Intel)

According to the Economic Daily News, the AI wave is ushering in a demand for updated specifications in CMOS Image Sensors (CIS), with the global CIS leader, Sony Corporation, aggressively positioning itself to take advantage of this trend. As part of the semiconductor industry’s move towards localized production, Sony has placed significant orders with TSMC’s new Kumamoto plant in Japan, boosting the production volume for the fourth quarter and rapidly increasing the new plant’s capacity utilization.

TSMC does not comment on individual customers or orders. Industry sources point out that the CIS component market previously faced an inventory adjustment issue for over a year. Recently, with clients restarting stock replenishment in anticipation of a recovery, coupled with the AI effect, various end-use applications are adopting lenses developed specifically for AI applications. This shift is expected to drive a new wave of demand for replacing old lenses with new ones to capitalize on AI lens opportunities.

Sony is optimistic about future opportunities in automotive and consumer sectors, and intends to extensively utilize TSMC’s 22nm process for producing CIS components and Image Signal Processors.

Furthermore, to seize the AI business opportunities, Sony has launched Digital Signal Processors (DSP) equipped with AI algorithms, which are expected to enhance applications such as human motion analysis, image processing enhancement, or human tracking. Especially with Sony securing large orders from clients, it is poised to become a major product line in the AI era.

TSMC’s new Kumamoto plant in Japan recently opened and is in the equipment installation phase, with production expected to start as early as the fourth quarter, focusing on 40, 28/22 nm processes for automotive and industrial clients.

The joint venture company for TSMC’s Japan plant, JASM, includes Sony as the largest shareholder besides TSMC. Sony has been a major client of TSMC for outsourced wafer production for many years. With the Kumamoto plant set to start production by the end of the year, Sony is almost certain to secure a significant share of wafer capacity, becoming a major client that fills the capacity utilization rate of TSMC’s Kumamoto plant.

(Image: TSMC)