Despite Western chip equipment export bans, China reportedly has imported 32 lithography systems from the Netherlands in Jan-Feb 2024, marking a 256.1% YoY growth.

According to China Customs data, Jan-Feb 2024 imports from the Netherlands totaled USD 1.057 billion, up 256.1% YoY, but down 44.8% QoQ, with 32 systems imported. January saw USD 666 million imports, up 522% YoY, down 41% QoQ, with 20 systems; February recorded USD 390 million imports, up 105.9% YoY, down 41.4% QoQ, with 12 systems.

From the data, it’s evident that in 2024, China’s imports of lithography systems from the Netherlands saw significant growth compared to the same period last year, but a noticeable decline from the previous quarter. In the first two months, China’s imports of exposure machines from the Netherlands decreased by 44.8% compared to December last year.

Per a report from IJIWEI, the average price of lithography systems imported from the Netherlands to China has increased from USD 10 million per unit since May last year to USD 30 million per unit. As of the first two months of 2024, the average price remains above USD 30 million.

According to a report by China’s Media outlet ICsmart, in terms of imports based on domestic registration locations, from January to February 2024, a total of 9 provinces and cities imported lithography systems. The top 5 importers were Shanghai (USD 303 million), Beijing (USD 145 million), Shandong (USD 131 million), Sichuan (USD 131 million), and Guangdong (USD 117 million), accounting for 28.7%, 13.8%, 12.4%, 12.4%, and 11.1% respectively, totaling 78.4%.

In June 2023, the Netherlands announced restrictions on the export of chip manufacturing equipment. According to relevant export regulations, it became difficult for Chinese companies to obtain export licenses starting from January 1, 2024.

Thus, since the second half of 2023, there has been explosive growth in the amount of exposure machines imported from the Netherlands. As per a previous report from South China Morning Post, in November 2023, China witnessed a remarkable 1050% surge in the import value of crucial chip manufacturing lithography equipment from the Netherlands.

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(Photo credit: ASML)

As generative AI applications fuel the era of high computing power, Foxconn’s connector subsidiary FIT announced on March 25th a cross-industry collaboration with MediaTek. Together, they will develop next-generation high-speed connectivity solutions, specifically Co-Packaged Optics (CPO), aiming to capitalize on the booming silicon photonics market.

According to a report from Economic Daily News, FIT and MediaTek have previously collaborated as upstream and downstream partners, with FIT being a leading manufacturer of custom ASIC sockets and having significant capacity for cooperation with upstream IC design firms.

This collaboration may mark their first joint venture in developing next-generation optical communication products, aiming to create CPO high-speed connectivity solutions using ASIC platforms and silicon photonics technology.

Foxconn Group Collaborates with MediaTek Across Industries

Industry sources cited by the report suggest that traditional data center transmission occurs on PCBs, whereas the CPO architecture is situated on the substrate, integrating optical communication components with switch into a module installed in a slot. This configuration shortens data transmission paths, reducing transmission losses and power consumption.

With the commercialization of generative AI, large language models require extensive computation within data centers, demanding high transmission rates to enhance operational efficiency. Traditional data transmission methods face significant signal loss, prolonging model training times and increasing power consumption. Consequently, the emergence of new network communication technology, CPO, addresses these challenges.

FIT asserts that CPO represents the next-generation optical communication transmission architecture, capable of shortening transmission paths, reducing transmission losses and signal delays, thereby providing more robust connectivity for AI computing and applications. It can be combined with the company’s existing optical communication products of 800G and 1.6T, forging ahead with next-generation network communication technology.

Through collaboration with MediaTek, they aim to offer customers more diverse and efficient connectivity solutions, driving the development of the era of high computational power.

MediaTek, as per the report, emphasized its commitment to adopting the industry’s most advanced processes, packaging technologies, and architectures, providing customers with diverse ASIC design platforms.

This initiative aims to offer the latest and comprehensive solutions to the rapidly growing data center and server markets. Collaborating with FIT on CPO further enhances their ability to deliver next-generation high-speed transmission solutions, thereby creating new market opportunities for customers.

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(Photo credit: Foxconn)

On March 25, the Semiconductor Equipment Association of Japan (SEAJ) disclosed its latest statistics.

The data revealed that in February 2024, the sales of Japanese semiconductor equipment (3-month moving average, including exports) reached JPY 317.418 billion, representing a growth of 7.8% compared to the same month last year. This also marked a second back-to-back month of growth, achieving the largest increase in 10 months (9.8% growth since April 2023).

Moreover, monthly sales crossed the 300 billion-yen threshold for the fourth consecutive month, hitting a new high over the 10 months (JPY 336.162 billion since April 2023).

Compared to the previous month, Japanese semiconductor equipment sales rose by 0.8%, marking the fourth consecutive month of monthly growth. In the cumulative period from January to February 2024, its sales stood at JPY 6,322.93 billion (+6.4% YoY), setting a new record high in the same period of previous years.

Semiconductor equipment manufacturers from Japan include Tokyo Electron (TEL), Advantest, Screen, Kokusai Electric, Hitachi High-Tech, Nikon, and Canon, etc.

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(Photo credit: SEAJ Official Website)

Intel, Qualcomm, Google, and other tech giants are reportedly joining forces with over a hundred startups to challenge NVIDIA’s dominance in the market, as per a report from Reuters. Reportedly, their goal is to collectively penetrate the artificial intelligence (AI) software domain, guiding developers to migrate away from NVIDIA’s CUDA software platform.

NVIDIA’s CUDA is a parallel computing platform and programming model designed specifically to accelerate GPU computing. It allows GPU users to fully leverage their chip’s computational power in AI and other applications. As per a previous report from TrendForce, since 2006, NVIDIA has introduced the CUDA architecture, nearly ubiquitous in educational institutions. Thus, almost all AI engineers encounter CUDA during their academic tenure.

However, tech giants are now reportedly aiming to disrupt the current status quo. According to a report from Reuters on March 25th, Intel, Qualcomm, and Google are teaming up to challenge NVIDIA’s dominant position. They plan to provide alternative solutions for developers to reduce dependence on NVIDIA, encourage application migration to other platforms, and thereby break NVIDIA’s software monopoly and weaken its market influence.

The same report from Reuters further indicated that several tech companies have formed the “UXL Foundation,” named after the concept of “Unified Acceleration” (UXL), which aims to harness the power of acceleration computing using any hardware.

The project plans to leverage Intel’s oneAPI technology to develop software and tools supporting multiple AI accelerator chips. The goal is to reduce the technical barriers developers face when dealing with different hardware platforms, streamline the development process, enhance efficiency, and accelerate innovation and application of AI technology.

Vinesh Sukumar, Head of AI and Machine Learning Platform at Qualcomm, stated, “We’re actually showing developers how you migrate out from an NVIDIA platform.”

Bill Magro, Head of High-Performance Computing at Google, expressed, “It’s about specifically – in the context of machine learning frameworks – how do we create an open ecosystem, and promote productivity and choice in hardware.” The foundation is said to aim to finalize technical specifications in the first half of this year and strives to refine technical details by the end of the year.

However, CUDA software has established a solid foundation in the AI field, making it unlikely to be shaken overnight. Jay Goldberg, CEO of financial and strategic advisory firm D2D Advisory, believes that CUDA’s importance lies not only in its software capabilities but also in its 15-year history of usage. A vast amount of code has been built around it, deeply ingraining CUDA in numerous AI and high-performance computing projects. Changing this status quo would require overcoming significant inertia and dependency.

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(Photo credit: NVIDIA)

Apple is reportedly intensifying its AI efforts, with plans to collaborate with Baidu on the Chinese version of its iPhone 16 series this year, as per a report from Economic Daily News. The devices will feature Baidu’s developed Generative AI technology, thus sparking a new wave of AI server deployment by Baidu.

In China, due to official requirements, providing generative AI services to ordinary consumers requires prior approval and scrutiny from relevant authorities. Only Chinese companies like Baidu and Alibaba have been granted permission. Apple has chosen Baidu as its AI service partner in the Chinese market.

According to the aforementioned reports, Apple and Baidu have entered into negotiations, planning to integrate Baidu’s generative AI services into products such as the iPhone for sale in China. By incorporating a Chinese version of AI, Apple aims to enhance its competitive advantage in the Chinese market.

Inventec, a Taiwanese manufacturer, has had close collaboration with Baidu for 13 years in the field of customized server manufacturing, has jointly developed an AI computing platform. Serving as a key server manufacturing partner for Baidu’s “All in AI” strategy, Inventec plays a major role in Apple’s swift push into the Chinese AI market alongside Baidu.

Inventec has traditionally refrained from commenting on order dynamics and customer relationships, emphasizing instead the robust shipment momentum of AI servers this year. Shipments are expected to more than double compared to last year. With AI server revenue accounting for approximately 5% to 6% last year, it is projected to surpass 10% this year.

Sources cited by the same report from Economic Daily News are optimistic that with Baidu becoming a key partner for Apple in the China’s generative AI landscape, Inventec’s AI server shipment momentum is poised to amplify, benefiting from the opportunities brought by the collaboration between Apple and Baidu.

As per a previous report from TrendForce, Baidu’s foray into AI chips can be traced back to as early as 2011. After seven years of development, Baidu officially unveiled its self-developed AI chip, Kunlun 1, in 2018. Built on a 14nm process and utilizing the self-developed XPU architecture, Kunlun 1 entered mass production in 2020. It is primarily employed in Baidu’s search engine and Xiaodu businesses.

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(Photo credit: Apple)