IC Manufacturing, Package&Test


2023-10-24

[Insights] Quanta, Wiwynn, and Major Manufacturers Scale Up to Meet Rising Demand for AI Servers

In October 2023, Quanta revealed plans to open three new factories in California, USA, with the goal of creating state-of-the-art assembly lines for AI servers. Around the same time, Wiwynn shared its intentions to launch a server cabinet assembly plant in Johor, Malaysia, featuring advanced liquid cooling technology. Additionally, server contract manufacturing giants, Foxconn and Inventec, are strategically positioning their AI server manufacturing facilities both domestically and internationally to meet the expected demand for AI server orders in the 2024 market.

 TrendForce’s Insights:

  1. Wiwynn and Quanta Open New AI Server Facilities, Enhancing Orders from Major U.S. Cloud Service Providers

Both Wiwynn and Quanta are contract manufacturers for cloud service giants such as Meta, Microsoft, and AWS. These three cloud service providers accounted for nearly 50% of the global server procurement in 2023. They’re doing this to keep up with the growing demand for AI servers, especially in the latter part of 2023, driven by applications like ChatGPT. Big cloud service providers, have allocated a significant chunk of their global server orders to these manufacturers, giving AI servers a top spot over regular servers.

Wiwynn, in particular, has set up shop in Malaysia to meet the surging demand for AI servers. Due to factors like the trade tensions between China and the U.S. and tariff avoidance measures, they are shifting their manufacturing capacity and equipment from their Guangdong factory in China to locations in Taiwan and Malaysia. This transition is expected to be completed between the end of 2023 and early 2024, making it easier to manage resources on a global scale.

Quanta’s smart move to open new assembly fabs near major U.S. cloud service providers allows them to deliver quickly to data centers in Europe and the U.S., saving on transportation costs and ensuring speedy deliveries. Both major Taiwanese manufacturers are optimistic about their orders for AI servers. This optimism allows them to expand their manufacturing capabilities in existing and new locations to strengthen partnerships with the big cloud players.

  1. Leading Taiwanese Server Manufacturers Expand Production at Home and Abroad, Anticipating a Multi-Fold Growth in AI Server Shipments by 2024

Major companies like Foxconn and Inventec are actively expanding their production facilities, both in their home country and abroad, to prepare for the expected increase in orders for AI servers from leading cloud service providers in 2024.

Fii and Ingrasys Inc., two important subsidiaries of Foxconn, dedicated to handling orders and manufacturing for servers. They have their own server assembly plants in various locations, including China, the United States, Europe, Vietnam, and Taiwan. They follow an integrated supply chain model, starting from producing motherboards to assembling complete server cabinets. Once the assembly is done, they ship the products to the data centers of cloud service providers. To meet the anticipated high-end AI server orders in 2024, Ingrasys Inc. added new production lines in the second quarter of 2023 to meet the demands of AI server manufacturers.

Inventec, a manufacturer that specializes in making server motherboards, expects a steady demand for AI servers in 2024-2025. With this expectation, they started construction at their factory in Thailand in Q3 of 2023. By Q4 of 2024, the factory will undergo production line testing, and mass production could begin as early as the first quarter of 2025 to meet the needs of major manufacturers. The new factory in Mexico is expected to match the production capacity of their Chinese facility. It has already started limited production and is expected to be in full operation by Q4 of 2024.

The four major contract manufacturers in Taiwan, specializing in server production, are either adding new production lines to their existing facilities or building new factories overseas between Q2 to Q4 of 2023. This undoubtedly shows their positive attitude to AI server shipments in 2024. As the use of AI servers continues to grow, market demand is expected to significantly increase year by year, which is likely to bring substantial revenue, profit, and production advantages to these contract manufacturers.

2023-10-23

[News] South Korean IC Foundry DB HiTek Expands Research in SiC and GaN Technologies

DB HiTek, a Specialty IC foundry in South Korea, is intensifying its research efforts in the Silicon Carbide (SiC) and Gallium Nitride (GaN) semiconductor domains to support future business growth, Jiwei reported.

DB HiTek’s recent investments aim to bolster its 8-inch wafer manufacturing capabilities. Nevertheless, due to a slow market recovery, reports suggest that the operation of the 8-inch wafer foundry may face challenges, and the transition to a 12-inch wafer foundry operation remains a question mark. In light of this situation, DB HiTek’s future development will pivot towards new power semiconductors such as GaN and SiC.

The company has reportedly initiated investments in essential equipment for next-generation GaN and SiC power semiconductors, a move set to expedite their research and development.

It is reported that DB HiTek, housing an 8-inch wafer foundry, is gearing up to venture into the SiC market, while the 6-inch wafer foundry remains the norm in this sector. As part of government policy initiatives, this specialized foundry is collaborating with Busan Techno Park for Silicon Carbide development.

In GaN semiconductor manufacturing, DB HiTek is partnering with the fabless company A-PRO Semicon to fine-tune their foundry processes.

As per the company’s website, DB HiTek operates two wafer foundries, producing ICs across a range of manufacturing nodes from 350nm to 90nm. Fab 1 in Bucheon City, Gyeonggi-do, offers chip solutions within the 150nm to 350nm nodes, including mixed-signal, power, and analog chips. Fab 2 in Eumseong County, Chungcheongbuk-do, provides solutions suitable for the 90nm to 180nm process nodes, including mixed-signal and CMOS image sensors (CIS), among other applications.
(Image: DB HiTek)

 

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2023-10-23

[News] China Makes A Step Forward in 300mm RF-SOI Wafer Production

In recent updates from Shanghai Industrial μTechnology Research Institute (SITRI), Dr. Xing Wei’s research team has achieved a groundbreaking milestone in 300mm SOI wafer manufacturing technology. They have successfully created China’s inaugural 300mm Radio Frequency Silicon-on-insulator (RF-SOI) wafer.

The team harnessed the resources of the China Key Laboratory for Integrated Circuit Materials’ 300mm SOI research platform, systematically resolving critical technical challenges required for 300mm RF-SOI wafers. This involved low-oxygen high-resistance crystal production, deposition of low-stress high-resistivity polycrystalline silicon films, and non-contact planarization.

This achievement not only marks the inception of China’s 300mm SOI manufacturing technology but is also anticipated to drive the entire RF-SOI chip design, manufacturing, and packaging industry chain within China. It will also ensure a stable supply of SOI wafers in the country.

SOI technology boasts a wide range of applications, encompassing RF-SOI for communication RF front-ends, high-power Power-SOI components, and Photonics-SOI technology for optical communications. SOI technology, which positions silicon wafers on insulating material, has emerged as a game-changing innovation with unique advantages, break limitations associated with traditional silicon materials and integrated circuits.

(Image: SITRI)

2023-10-20

[News] TSMC’s Global Expansion: Progress in New US, German, and Japanese Fabs

During the 3Q23 Earning Call on October 19th, TSMC provided updates on its international factory construction. Notably, the new plant in Phoenix, Arizona, USA, is on track to commence production in the first half of 2025. The German facility is scheduled for production in 2027. The Kumamoto plant in Japan is making swift progress, with production expected to start by the end of 2024. TSMC remained silent regarding its plans following the announcement of discontinuing Phase 3 construction at the Longtan Park.

In line with its global expansion strategy, TSMC has established semiconductor fabrication plants in various locations, including Phoenix, USA, Dresden, Germany, and Kumamoto, Japan. In the recent update, TSMC shared details about these overseas projects. In the case of the new US facility, it has already hired nearly 1,100 local employees and aims to employ 4-nanometer (N4) technology by the first half of 2025.

As for the Dresden plant, TSMC announced the construction of a specialized semiconductor fabrication facility primarily catering to the automotive and industrial sectors, utilizing 22/28-nanometer and 12/16-nanometer technologies. Construction is set to begin in the latter half of 2024, with production slated to commence by the end of 2027.

The Kumamoto plant in Japan is making the most rapid progress. TSMC noted that this semiconductor fabrication facility will use 12/16-nanometer and 22/28-nanometer process technologies. Approximately 800 local employees have already been hired, and equipment for this plant began to be relocated this month. Production is expected to commence by the end of 2024.

Regarding the higher initial production costs at overseas plants, TSMC explained that these costs are higher than those at its Taiwanese semiconductor fabrication facilities. This is primarily due to the smaller scale of overseas semiconductor fabrication plants and the higher overall supply chain costs. In comparison to Taiwan’s mature semiconductor ecosystem, overseas semiconductor ecosystems are still in their early stages.

In addition, there has been significant attention on recent developments related to the Longtan Park Phase 3. However, TSMC made no mention of it in the press conference, only stating that they will continue to evaluate suitable construction locations.

Notably, TSMC recently received an extension waiver from the US Department of Commerce’s Bureau of Industry and Security (BIS) to continue operations in Nanjing, China. They are currently in the process of obtaining “Validated End-User (VEU)” authorization, with expectations of securing an indefinite exemption in the near future.

2023-10-20

[News] Chinese Chip Equipment Rises Amid U.S. Restrictions

Amid increased U.S. restrictions on China’s semiconductor industry, Chinese chip equipment manufacturers are witnessing a notable uptick in domestic orders. Over the first eight months of this year, Chinese chip equipment managed to capture nearly half of all orders. This serves as a compelling sign that the fears expressed by companies such as NVIDIA, AMD, and Intel about losing ground to domestic rivals in the Chinese market are materializing.

On October 17th, the Biden administration tightened chip export rules, barring American companies, including NVIDIA, from selling AI chips to China. At the same time, the U.S. Commerce Department’s Bureau of Industry and Security (BIS) placed 13 Chinese GPU firms on its Entity List, further unsettling global semiconductor and AI supply chains. Ironically, these moves could expedite China’s domestic AI chip industry’s advancement amid the pressure.

Huatai Securities’ analysis reveals that Chinese chip foundries have been winning an increasing number of bids for machinery equipment this year. In the first eight months of this year, they secured 47.25% of these bids, with the percentage soaring to 62% in August. In comparison, during March and April, the rate was only 36.3%. This trend reflects a turning point for China’s chip equipment industry and showcases its rapid transition towards self-sufficiency.

As per Reuters, insiders disclosed that prior to the U.S. export bans, China’s advanced chip foundries rarely utilized domestic equipment, reserving it for expanding production. Yet, in reaction to the ongoing restrictions, they’ve proactively started testing homegrown equipment on all foreign devices and plan to fully replace foreign gear with domestic alternatives. This transition has greatly boosted local firms such as AMEC and NAURA.

Analysts observe that China’s local equipment makers have notably enhanced their production capacity, especially in wet etching and cleaning, positioning them for global competition with U.S. counterparts. What’s more, the quality of Chinese-made equipment has surpassed expectations, often advancing by up to two years. The substantial revenue growth in the sector attests to China’s remarkable progress in the semiconductor equipment industry.

Nonetheless, photolithography equipment remains a field where China’s domestic equipment struggles to break through due to its demanding requirements for optical and process precision. China has faced challenges in procuring extreme ultraviolet (EUV) lithography machines crucial for manufacturing cutting-edge chips. The situation is further complicated by the joint efforts of the United States, the Netherlands, Japan, and other allies to restrict the export of advanced deep ultraviolet (DUV) lithography machines to China.
(Image: AMEC)

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