As the pressure from the United States to strengthen export controls on semiconductor manufacturing equipment to China continues to grow, as per a report from Yonhap News Agency (YNA), the United States has reportedly urged allies such as Japan, the Netherlands, Germany, and South Korea to join forces and expand the scope of their containment measures, extending to equipment, raw materials, optical components, and other areas.

While countries like the Netherlands, Japan, and Germany have yet to make their positions known, the same report indicates that the South Korean government, in efforts to maintain stability in its relationship with the United States, is considering cooperation with U.S. efforts to impose export controls on semiconductor equipment to China.

YNA’s report has indicated that, since October 2022, when the U.S. government announced a ban on American companies exporting equipment and technology essential for advanced semiconductor manufacturing to China, it has continuously urged its allies to implement similar levels of export controls on exports to China.

Sources cited by the report indicate that initially, the Netherlands and Japan, which have high levels of semiconductor technology, were the primary targets of U.S. pressure. However, starting from the second half of 2023, the pressure from the United States on South Korea has intensified, even directly naming specific South Korean companies.

In February this year, the U.S. Department of Commerce and the South Korean Ministry of Trade, Industry, and Energy reportedly held negotiations on this issue. Sources cited in YNA’s report revealed that the U.S. side is concerned that South Korea could become a loophole in its export controls on semiconductor technology to China, and South Korea is working to address U.S. concerns.

The same sources stated that although the South Korean government has not yet made a decision on this matter, considering national interests and taking into account the U.S. position, it is at least inclined to “partially” meet U.S. demands.

Per the same report, the South Korean government is also concerned that measures related to export controls on China will adversely affect the competitiveness of the South Korean semiconductor industry. South Korean companies’ semiconductor equipment technology is already inferior to that of the United States, Japan, and the Netherlands. If exports to China, particularly crucial ones, are further restricted, it will undoubtedly worsen the situation for the semiconductor industry in South Korea.

Yeo Han-koo, a senior researcher at the Peterson Institute for International Economics (PIIE) who formerly served as Director-General of Trade Negotiations at the South Korean Ministry of Trade, Industry, and Energy, noted that considering the recent dynamics in U.S.-China relations and international geopolitical factors, South Korea faces challenges in completely disengaging. However, South Korea aims to minimize losses for its companies to the greatest extent possible and is committed to exploring reasonable compromise solutions with the United States.

On the other hand, as per TrendForce’s previous report, China is focusing aggressively on mature process technologies (28nm and older), particularly in response to export controls on advanced equipment by the US, Japan, and the Netherlands. By 2027, China’s share in mature process capacity is expected to reach 39%, with room for further growth if equipment procurement proceeds smoothly.

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(Photo credit: iStock)

There are market rumors suggesting that Samsung Electronics plans to switch to the chip manufacturing technology used by SK Hynix in an effort to catch up with competitors in the increasingly heated competition of high-bandwidth memory (HBM).

As per Reuters’ report on March 13th, demand for HBM has surged due to the popularity of Generative AI. However, while SK Hynix and Micron Technology have successively finalized supply agreements with NVIDIA Corp., Samsung unexpectedly missed out. It is reported that Samsung’s HBM3 has yet to pass NVIDIA’s quality tests.

Reuters report further cited sources indicating that one of the reasons for Samsung’s lagging progress is its insistence on using Non-Conductive Film (NCF) technology, which has led to some production issues. In contrast, SK Hynix has taken the lead by switching to mass reflow molded underfill (MR-MUF) technology, addressing the weaknesses of NCF and becoming the first supplier of HBM3 chips to NVIDIA.

The report states that Samsung is in talks with several material suppliers, including Nagase Corporation from Japan, in hopes of purchasing MUF materials. It is revealed that Samsung intends to utilize both NCF and MUF technologies in its latest HBM chips.

Regarding the matter, both of NVIDIA and Nagase declined to comment.

As for the current landscape of the HBM market, starting in 2024, the market’s attention will shift from HBM3 to HBM3e, with expectations for a gradual ramp-up in production through the second half of the year, positioning HBM3e as the new mainstream in the HBM market.

According to TrendForce’s latest report, SK hynix led the way with its HBM3e validation in the first quarter, closely followed by Micron, which plans to start distributing its HBM3e products toward the end of the first quarter, in alignment with NVIDIA’s planned H200 deployment by the end of the second quarter.

Samsung, slightly behind in sample submissions, is expected to complete its HBM3e validation by the end of the first quarter, with shipments rolling out in the second quarter. With Samsung having already made significant strides in HBM3 and its HBM3e validation expected to be completed soon, the company is poised to significantly narrow the market share gap with SK hynix by the end of the year, reshaping the competitive dynamics in the HBM market.

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(Photo credit: SK Hynix)

In recent years, influenced by complex international dynamics and the need to safeguard supply chain security, Southeast Asian countries such as Singapore, Malaysia, and Vietnam have become prime locations for numerous semiconductor giants to establish overseas operations. Now, the Philippines may join the ranks of these nations.

Recently, U.S. Secretary of Commerce Gina Raimondo addressed her desire to assist the Philippines in doubling its semiconductor facilities to lessen the geographic concentration of the global chip supply chain.

Previously, according to the press release of the U.S. Department of Commerce, Raimondo has announced the plan to invest USD 1 Billion in Philippines.

“The Indo-Pacific includes some of the most dynamic economies in the world. It was an honor to lead the first-ever trade mission of this nature to the Philippines and to underscore the immense potential, which is evident in the more than $1 billion of investments from this mission alone,” said Raimondo.

According to Taiwantrade’s Data, it has indicated that the semiconductor and electronics industry is the top-performing sector among the Philippines’ export commodities, accounting for approximately 60% of total commodity exports.

The semiconductor industry in the Philippines primarily focuses on the assembly and testing sector. With a high literacy rate and a young workforce proficient in English, the Philippines has become a significant assembly and testing hub for global semiconductor giants such as Amkor, Intel, ADI, and TI (Texas Instruments).

Geographically, the semiconductor industry in the Philippines is concentrated in four main regions: Manila, Calabarzon, Northern/Central Luzon, and Cebu. Among these regions, Manila stands out as the primary hub, hosting assembly and testing facilities for globally renowned companies like Amkor, Onsemi, as well as Toshiba’s hard drive assembly plant.

Currently, the Philippines has 13 semiconductor assembly, testing, and packaging facilities. Most of the products produced are exported to other regions for assembly or application. The integrated circuits (ICs) used in these facilities mainly come from Taiwan, the United States, and Japan, with finished products primarily exported to Singapore, China, and Japan.

However, the Philippines is not content with just the assembly and testing sector. In February of this year, it was previously reported by Philippine Board of Investments (BOI) in its press release, stating that the BOI would collaborate with the United States to expand its semiconductor capabilities, including the construction of its first fab.

The BOI aims to build a laboratory-scale fab. This facility will provide general manufacturing process technology to encourage local semiconductor startups and train semiconductor engineers.

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(Photo credit: Intel)

With AI demand exploding across the board, TSMC initiated a major expansion plan for CoWoS in 2023. According to MoneyDJ citing sources, TSMC reportedly initiated a new wave of orders to Taiwan-based equipment manufacturers this month. Delivery is expected in the fourth quarter of this year.

Therefore, by the end of 2024, monthly production capacity may have the chance to double from the company’s target and further exceed market estimates of 35,000 wafers, possibly reaching over 40,000 wafers. As per the same report, TSMC is making a full-scale push to expand its CoWoS production capacity, aiming for a doubling of growth by 2024, with continued expansion expected in 2025.

As per multiple sources cited by MoneyDJ, TSMC resumed ordering CoWoS equipment in April 2023, with the second and third waves of additional orders placed in June and October, respectively. Subsequently, there were sporadic additional orders.

However, this month, there is a new wave of proactive orders, scheduled for delivery in the fourth quarter. Initially, it was estimated that CoWoS monthly production capacity would reach 32,000 to 35,000 wafers by the end of 2024. Now, it is possible that it will exceed 40,000 wafers.

Regarding TSMC’s SoIC, following AMD, Apple also plans to adopt this technology, intending to use SoIC combined with Hybrid molding. Currently, it is undergoing small-scale trial production.

To meet customer demand, TSMC continues to revise its capacity plans. At the end of last year, SoIC monthly capacity was around 2,000 wafers, with a target to reach nearly 6,000 wafers by the end of this year. The monthly capacity target for 2025 is to double again to over 14,000 to 15,000 wafers.

Still, as per industry sources cited by CNA in its previous report, the demand for advanced packaging capacity for AI chips still outstrips supply. The report also revealed that NVIDIA has sought assistance from packaging and testing subcontractors outside of TSMC to augment their advanced packaging capabilities.

Amkor, among others, began gradually providing capacity support from the fourth quarter of last year, while SPIL, a subsidiary of ASE, is slated to commence supply in the first quarter of this year.

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• [News] TSMC to Expand Production with New Facilities Across Taiwan in April
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(Photo credit: TSMC)

With the rising demand in the memory market and Chinese memory companies actively preparing for competition, a report from TechNews indicates that Zhou Meisheng, formerly the assistant to SMIC’s co-CEO Liang Mengsong, has joined ChangXin Memory Technology (CXMT) as the head of the Technical Research and Development Center, attracting attention.

Zhou Meisheng has previously served as the CTO of Lam Research in China, a global research and development equipment technology company. Before that, she held positions in various semiconductor companies, including Chartered Semiconductor (Singapore), UMC, and GlobalFoundries.

Starting in 2017, she served as the Executive Vice President of R&D at SMIC, directly reporting to co-CEO Liang Mengsong. She played a crucial role as Liang Mengsong’s key assistant in driving SMIC’s advanced process initiatives. In 2022, Zhou Meisheng retired, resigning from all positions at SMIC, sparking speculation.

The technology of CXMT continues to make breakthroughs, and by the end of 2023, the official website of CXMT announced the development of China’s first LPDDR5 DRAM chip. They introduced a series of LPDDR5 products, including 12GB LPDDR5, 12GB LPDDR5 with POP packaging, and 6GB LPDDR5 with DSC packaging.

LPDDR5 represents the fifth generation of low-power DRAM, and compared to the previous LPDDR4X, the new LPDDR4X has a 50% increase in capacity and speed, reaching 12GB capacity, a data transfer rate of 6,400Mbps, and a 30% reduction in power consumption.

In fact, CXMT’s main competitor Samsung announced the mass production of 12GB LPDDR5 mobile DRAM in July 2019, while Micron supplied LPDDR5 DRAM with capacities of 6GB, 8GB, and 12GB in February 2020. SK Hynix, on the other hand, announced the mass production of 18GB LPDDR5 mobile DRAM in August 2021. Therefore, considering the timeline, there’s an approximate four-year technology gap between CXMT and other global giants.

As for the DRAM market, it currently remains highly concentrated, dominated by key players such as Samsung Electronics, SK Hynix, and Micron Technology, collectively holding over 96% of the entire market share.

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(Photo credit: CXMT)