In 2024, TSMC’s global expansion continues at full throttle, with industry reports suggesting a significant breakthrough in the establishment of a 3-nanometer advanced process manufacturing facility in Japan. Osaka is considered the most likely location for TSMC’s third plant in Japan.

TSMC has stated that it is actively evaluating suitable sites for construction and is not ruling out any possibilities.

According to Taiwan’s Commercial Times, following the announcement of Chairman Mark Liu’s retirement, speculation arises that President CC Wei will shoulder the responsibility of overseas expansion. With domestic 1.4 and 2-nanometer plans settled, and 3-nanometer production achieving high yields, developments in the U.S., Japan, Germany, and elsewhere are progressing rapidly.

Furthermore, sources in the supply chain reveal that TSMC has design centers in Osaka and Yokohama, making Osaka the front-runner for TSMC’s third plant in Japan.

Market speculations suggest that Japan will be a focal point for TSMC’s overseas expansion, with advanced processes and packaging potentially making significant strides in the country. Supply chain insiders point out that TSMC’s two R&D centers in Japan specializing in advanced process research and supporting design services for Japanese IDM customers. The advantageous conditions in Osaka are seen as superior to those in Yokohama.

TSMC’s subsidiary, Japan Advanced Semiconductor Manufacturing (JASM), is constructing a factory in Kikuyo Town, Kumamoto Prefecture, Japan, set to open on February 24 and expected to commence mass production by the end of 2024.

The second factory in Kumamoto is also planned to start operations in April. As for TSMC’s Taiwan facilities in advanced processes, the estimation is for 2-nanometer production to begin in Baoshan and Kaohsiung, gradually reaching mass production by 2026.

(Image: TSMC)

TSMC operates at full capacity, AMD aims for AI chips reportedly seeks CoWoS-like supply chain.

In 2023, NVIDIA led the global AI chip development, and in 2024, the global demand for AI chips is expected to continue to surge due to the expansion of end-user applications such as PCs and mobile phones.

Meanwhile, AMD has not stopped in AI chip development either, with the expected MI300 products poised to heat up the global AI business opportunities. However, the key to supply lies in advanced packaging, and AMD will seek outsourced semiconductor assembly and test (OSAT) service providers to offer support similar to CoWoS.

According to Taiwan’s Commercial Times, TSMC’s CoWoS capacity has long been fully loaded, and even if it expands production this year, it will mainly be reserved for NVIDIA. Market sources pointed out that TSMC will continue to increase CoWoS capacity to support AMD’s demand, but it takes six to nine months to establish a new production line. Therefore, it is expected that AMD will seek cooperation with other companies with CoWoS-like packaging capabilities. ASE, Amkor, Powertech, and KYEC are the first batch of potential partners.

TSMC has been outsourcing part of its CoWoS operations for some time, mainly targeting small-volume, high-performance chips. TSMC maintains in-house production of the CoW, while the back-end WoS is handed over to test and assembly houses to improve production efficiency and flexibility. This model will continue in the future 3D IC generation.

ASE and Amkor both received WoS orders last year. ASE has strengthened the development of advanced packaging technology and has a complete solution for the entire CoWoS process. ASE previously stated that it sees the strong potential of AI and expects related revenue to double in 2024.

According to reports citing market sources, the monthly production capacity of the ASE Group’s 2.5D packaging is about 2,000 to 2,500 pieces. Some experts believe that test and assembly houses will maintain the business model of TSMC or UMC providing the interposer. Therefore, in 2024, a significant increase in CoWoS production capacity is expected.

KYEC is responsible for testing Nvidia AI chips and is expected to benefit from AMD’s search for CoWoS-like capacity. Nvidia is currently KYEC’s second-largest customer.

KYEC’s testing of Nvidia A100 and H100 chips is mainly in the final test (FT), with a market share of up to 70%. KYEC provides comprehensive IC burn-in testing, has self-developed burn-in equipment, and has been in the industry for more than a decade, accumulating many patents and technologies.

AMD stated at the end of 2023 that AI chip revenue could reach US$2 billion in 2024, excluding other HPC chips. AMD pointed out that the annual compound growth rate of the AI chip market in the next four years will reach 70%, and it is estimated that it will reach US$400 billion in 2027.

(Image: AMD)

Japanese semiconductor equipment manufacturer Tokyo Electron Limited (TEL) is reportedly set to increase the starting monthly salary for new hires by approximately 40%, breaking the JPY 300,000 barrier for the first time (approximately USD 2,121). This move is expected to align the salary level with international counterparts to attract talent.

According to the report from Nikkei Asia, TEL has been consistently raising salaries and bonuses due to its strong business performance. The company will raise the salary for all new hires by JPY 85,500.

Starting in April 2024, the monthly salary for university graduates joining the company will reach JPY 304,800 (USD 2,161), while those with higher qualifications can receive JPY 320,000. This marks the first salary increase for new employees at TEL in seven years.

As per the survey conducted by the Japan’s National Personnel Authority in the spring of 2023, Japanese private companies offer an average starting salary of around JPY 210,000 (approximately USD 1,484) for university graduates, with those holding higher degrees receiving around JPY 230,000. On the other hand, TEL’s financial statement reveals that the company’s average annual salary as of March 2023 is JPY 13.98 million.

Japan has seen a series of significant investments in the semiconductor industry, including TSMC’s entry into Kumamoto, Kyushu. Semiconductor manufacturers are offering high salaries to attract skilled workers, and this trend is prompting chip equipment suppliers to follow suit.

TEL plans to hire approximately 400 new graduates in the spring, an increase of 50 from the previous year, and envisions increasing the number of new employees to 500 within the next few years.

Read more

• [News] Examining Japan through Semiconductor Foundries: Goals of TSMC’s and PSMC’s New Plants
• [News] Global Chip Equipment Sales Plummet by 11%, Taiwan Nearly Halves, China Breaks Records

(Photo credit: TEL)

Amidst geopolitical influences, governments worldwide are enticing semiconductor manufacturers with subsidy policies, prompting chip manufactures to establish themselves in various regions. The ongoing dynamics of semiconductor facility construction and the evolving global production capacity remain focal points for the industry in 2024.

Following TSMC’s establishment of facilities in Arizona, USA, and Kumamoto, Japan, the progress of TSMC’s second Kumamoto plant has garnered significant industry attention. On another front, the developments at TSMC’s ESMC facility in Germany continue to capture global attention within the semiconductor industry.

Powerchip Semiconductor Corporation (PSMC) also made headlines in 2023 by announcing the construction of its first overseas 12-inch fab, JSMC, located in Sendai City, Miyagi Prefecture, Japan.

Meanwhile, Samsung’s overseas expansion efforts are equally robust. In addition to its Taylor plant in the United States, Samsung plans to establish a new semiconductor packaging research center in Japan.

According to TrendForce data, considering an equivalent foundry capacity of 12 inches, Taiwan held a global market share of approximately 47% in 2023, followed by China at 26%, South Korea at 12%, the United States at 6%, Singapore at 4%, Japan at 2%, Germany at 1%, and others at 2%. By 2027, Taiwan’s market share is projected to decrease to 42%, with China at 28%, South Korea at 10%, the United States at 7%, Singapore at 6%, Japan at 3%, Germany at 2%, and others at 1%.

(Image: TSMC)

Semiconductor manufacturers, after more than a year of destocking, are experiencing a recovery from the bottom of the market, and recently, there have been signs of price increases. Market sources reveal that Analog Devices Inc. (ADI), a major analog IC manufacturer, has recently issued a price increase notice to its Chinese distributors. The notice indicates an estimated price increase of 10% to 20%, set to take effect in February of the coming year.

According to reports compiled by Liberty Times Net, ADI stated in the price increase letter that the company places a high value on the reliability of stable component production. Therefore, it will not arbitrarily stop the production of components within a controllable range. To maintain a guaranteed supply for customers, the company will increase prices for certain older product lines to offset the cost pressures of sustaining production. If customers object to the price increase, ADI is committed to providing the best possible component replacement solutions.

According to industry sources, ADI’s price increase reflects the company’s optimistic outlook on the recovery of industry demand. On one hand, by increasing the prices of older products, ADI is expected to encourage customers to transition to new products.

In terms of ADI’s operations, ADI CEO Vincent Roche has previously stated in the company’s 2023 Q4 Earnings Call that, “Weakness in the industrial sector broadened and hit all the various market segments with 1 exception, the aerospace and defense area.”

Last month’s financial report from ADI revealed that, influenced by the still-high semiconductor inventory, the company’s fourth-quarter revenue decreased by 16% to USD 2.7 billion.

Within this, only automotive revenue showed positive growth, increasing by 14% to USD 730 million year-on-year, representing 27% of the overall revenue. Industrial revenue, accounting for approximately 50%, is the largest source of revenue, but in the fourth quarter, it experienced a 20% year-on-year decline to USD 1.35 billion.

For the entire fiscal year of 2023, ADI’s revenue reached USD 12.3 billion, a 2% increase compared to the previous year. This growth is attributed to record-breaking performances in the industrial and automotive sectors. The company’s Gross Margin increased by 5% to USD 7.8 billion, with a Gross Margin Percentage of 64%. Operating Income significantly rose by 17% to $3.8 billion, and the Operating Margin reached 31.1%.

(Photo credit: ADI)