In 2023, NVIDIA secured a large number of AI chip orders through the sale of data center GPU, making it the most prominent company in the AI field for the year. In this context, many chip design companies have been eyeing the AI chip market, aiming to seize the opportunities presented by AI development and achieve greater profits.

According to a report from Nikkei Asia, Arm, a subsidiary of SoftBank Group, is developing AI processor to be used in SoftBank’s data centers. The report states that Arm has already established a department specific to AI processors at its UK headquarters in hopes of having prototypes ready by spring 2025, with an official release in spring 2025, and mass production at wafer foundries starting in fall 2025. SoftBank will bear the initial development costs, expected to reach several hundred billion yen.

As per the plan, SoftBank intends to build Arm-based data centers in the United States, Europe, Asia-Pacific, and the Middle East by 2026. Given the high power supply requirements of data centers, SoftBank also plans to expand its presence into the power generation sector, developing wind and solar energy facilities and exploring next-generation nuclear fusion technology.

The report indicates that once Arm’s AI processors enter mass production, the AI chip business might be spun off. Additionally, SoftBank aims to implement a broader strategy in the AI field to enhance the competitiveness of its data center, robotics, and power generation divisions, and to facilitate innovation. SoftBank CEO Masayoshi Son has emphasized that the application of general artificial intelligence will fundamentally transform industries such as shipping, pharmaceuticals, finance, manufacturing, and logistics.

Statistics show that the AI chip market size is mushrooming, projected to surge from USD 30 billion in 2024 to over USD 100 billion by 2029, and exceed USD 200 billion by 2032. Therefore, despite NVIDIA’s current leading position, various chip companies are striving to meet the demands for AI chips across different industries, seeking opportunities in this fast-growing market.

According to TrendForce’s latest memory spot price trend report, due to relatively high level of inventories, the uptrend of DRAM spot prices is not as sharp compared with that of contract prices. Meanwhile, regarding NAND Flash prices, the spot market is not seen with much price inquiries either as the market confidence remains weak. Details are as follows:

DRAM Spot Price:
The uptrend of spot prices is not as sharp compared with that of contract prices. Currently, China’s May Day holiday has just ended, so the overall transaction volume remains low in the spot market. Furthermore, module houses have already accumulated too much inventory, so their focus is now on selling off their existing stocks. Overall, spot prices lack upward momentum in the recent period. The average spot price of mainstream chips (i.e., 1Gx8 2666MT/s) fell by 0.31% from US$1.949 last week to US$1.943 this week.

NAND Flash Spot Price:
The spot market is not seen with much price inquiries and transaction due to the certain extent of inventory being held by channels, distributors, and clients, as well as their conservative outlook on the market for the next two quarters. A number of buyers are still holding onto their low-priced inventory established from 3Q23, and are waiting patiently for market response in 3Q24 with lingering profitability in average cost. Spot price for 512Gb TLC wafers has dropped by 0.89% this week, arriving at US$3.675.

According to reports from Chinese media My Drivers and Gizchina, Qualcomm is said to have confirmed that Huawei will no longer require their processors.

Amidst escalating tensions between the United States and China due to trade and technology restrictions, Qualcomm’s CFO reportedly confirmed that Huawei will not be procuring 4G chips from Qualcomm in the future, highlighting a significant shift in the global technological landscape.

The same reports mentioned that the U.S. has tightened export restrictions on Huawei, revoking licenses for semiconductor sales from both Qualcomm and Intel. However, the impact on Huawei in terms of smartphone processors is said to be limited.

Qualcomm once stated on May 7, 2024 that the U.S. Department of Commerce notified the semiconductor company of the revocation of the its license to export 4G and certain other integrated circuit products, including Wi-Fi products, to Huawei and its affiliates and subsidiaries, which would be effective immediately.

Huawei has been working on developing its own chipsets, particularly the Kirin series, which have been used in its flagship smartphones, in order to tackle with the ongoing trade tensions and restrictions imposed by the United States on Huawei’s access to advanced technology and components. Its latest smartphone Pura 70, launched in early May, is powered by the Kirin 9010 processor.

Read more

• [News] U.S. Imposes Further Sanctions, Revoking Intel and Qualcomm’s License to Supply Chips to Huawei
• [News] US Considers Sanctioning Huawei-Linked Chinese Chip Network, Huawei-Related Enterprises Blacklisted

(Photo credit: iStock)

According to sources cited by a report from Economic Daily News, TSMC’s A16 advanced process node might not necessarily require ASML’s latest advanced chip manufacturing equipment, the High Numerical Aperture Extreme Ultraviolet Lithography (High-NA EUV), due to its expensive price.

Per a report from Bloomberg, during a technical symposium in Amsterdam on May 14th, TSMC’s Senior Vice President of Business Development and Co-Chief Operating Officer, Dr. Kevin Zhang, remarked that while he appreciates the capabilities of High-NA EUV, he finds its price tag to be unlikeable.

As per the same report from Bloomberg, ASML’s new machine is capable of imprinting semiconductors with lines measuring just 8 nanometers in thickness — 1.7 times smaller than the previous generation.

In terms of pricing, this EUV machine is reportedly priced at EUR 350 million (roughly USD 380 million), with a weight equivalent to two Airbus A320 passenger planes, according to Bloomberg.

Dr. Kevin Zhang stated that TSMC’s planned A16 node (scheduled for volume production slightly later in 2026) may not necessarily require the use of ASML’s High NA EUV equipment. Instead, TSMC could continue to rely on its existing, older EUV equipment. “I think at this point, our existing EUV capability should be able to support that,” he expressed.

He further mentioned that the decision to adopt the new ASML technology would depend on where it offers the most economic benefits and the technical balance they can achieve. He declined to disclose when TSMC might purchase High-NA EUV from ASML.

On the other hand, Intel has confirmed in mid-April that it has received and assembled the industry’s first High-NA EUV lithography system, which is expected to be able to print features up to 1.7x smaller than existing EUV tools. This will enable 2D feature scaling, resulting in up to 2.9x more density.

Currently, both TSMC and Samsung utilize EUV equipment for manufacturing, covering TSMC’s 7nm, 5nm, and 3nm processes and Samsung’s EUV Line (7nm, 5nm, and 4nm) located in Hwaseong, Korea, along with the 3nm GAA process.

Read more

• [News] Intel Secures First Batch of High-NA EUV Equipment from ASML, Ahead of Samsung and SK Hynix
• [News] EUV as a Strategic Asset in the Most Advanced Processes: Progress in Intel/TSMC/Samsung’s Adoptions

(Photo credit: ASML)

As generative AI models like OpenAI sweep across the globe, the demand for high-performance GPU has been on the rise. For instance, NVIDIA’s GPU products are in tight supply and often reportedly out of stock. Industry analysis reveals that NVIDIA’s high-performance GPU is manufactured by TSMC and packaged using CoWoS technology. However, TSMC’s advanced CoWoS packaging capacity is insufficient to meet the AI demands. Later, TSMC actively expanded CoWoS production, and NVIDIA’s GPU shipments gradually stabilized as capacity increased.

Notably, new challenges present following the ease of GPU shortage problem.

Recently, Mark Zuckerberg, CEO of Meta, stated publicly that the GPU shortage in AI data centers is being alleviated, while the future bottleneck will be power supply.

As GPU supply become less tight, companies kick-start big investment in building data centers and other infrastructure facilities to be in tune with the AI development trends.

Zuckerberg believes that the next crux for AI development will be power supply. He noted that many new data centers could consume 50-100MW, and large data centers could reach up to 150MW. As the scale of data center power consumption continues to grow, AI industry may hit a power supply bottleneck.

The energy industry, unlike the AI sector, does not find building new power plants a simple task. Given factors such as regulations (Especially nuclear energy), power transmission planning, and construction, it could take several years from planning to the actual integration of new power into the grid. Therefore, capital investments fail to yield results in a short time, and the delivery of additional power supply lags far behind the construction of data centers.

To address the potential future power crisis, media reports indicate that Meta is currently collaborating with Silicon Ranch, a solar energy company in Georgia, to supply power to its data centers.

Likewise, Tesla CEO Elon Musk also issued a warning regarding AI development in April 2024, stating that the next shortage facing AI will be power, and there may not be enough electricity to run all the chips next year.

Besides, OpenAI CEO Sam Altman has also stated that AI will consume more power than expectation, and future AI development will require breakthroughs in clean energy.