As per a report from TechNews, Apple’s pivot into AI, abandoning its “Project Titan” for electric cars, signals a shift towards Generative AI. The report further cites sources indicate that Foxconn may provide AI servers to Apple and is currently in testing phase.

Regarding this matter, Foxconn responded with no comment on individual clients or products.

According to reports from Economic Daily News, Apple has conducted extensive AI feature testing and, given Foxconn’s global leadership in server manufacturing, it has emerged as Apple’s preferred partner for the AI project.

In addition to Apple, during a recent financial conference, Dell’s COO, Jeff Clarke, disclosed that NVIDIA is set to launch a new generation server GPU, “B200,” based on the Blackwell architecture in 2025. Notably, this revelation wasn’t part of NVIDIA’s product roadmap released in October 2023, and the company has not officially mentioned this product. 

Currently, the H100 utilizes TSMC’s 4-nanometer process technology, with Foxconn securing approximately 90% of the assembly orders last year. While the fabrication process for the B100 and B200 chips remains unconfirmed, industry expectations cited by the report have pointed to the 3-nanometer process.

Previously, media speculation cited by the report from Commercial Times stated that although the B100 chip boasts computational power at least twice that of the H200 and four times that of the H100, still, B100’s tenure in the market is anticipated to be short-lived, with the B200 emerging as the mainstream product. It is rumored that Foxconn Industrial Internet will handle the manufacturing for the B200.

Foxconn’s Chairman Young Liu previously indicated a strong demand for AI servers, with Foxconn securing new projects continuously.

Foxconn spokesperson James Wu noted that Foxconn Group commands over 40% market share in the server industry, particularly in the mid-to-high-end products related to AI servers. Foxconn closely collaborates with customers and aims to maintain its dominance, anticipating substantial contributions once the entire supply chain stabilizes.

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• [News] Dell Leak Reveals NVIDIA’s Potential B200 Launch Next Year
• [News] SK Hynix Announces Complete Sales of HBM for the Year, Memory Market Poised for Recovery

(Photo credit: Foxconn)

The surge in demand for NVIDIA’s AI processors has made High Bandwidth Memory (HBM) a key product that memory giants are eager to develop. However, according to South Korean media DealSite cited by Wccftech on March 4th, the complex architecture of HBM has resulted in low yields, making it difficult to meet NVIDIA’s testing standards and raising concerns about limited production capacity.

The report has further pointed out that HBM manufacturers like Micron and SK Hynix are grappling with low yields. They are engaged in fierce competition to pass NVIDIA’s quality tests for the next-generation AI GPU.

The yield of HBM is closely tied to the complexity of its stacking architecture, which involves multiple memory layers and Through-Silicon Via (TSV) technology for inter-layer connections. These intricate techniques increase the probability of process defects, potentially leading to lower yields compared to simpler memory designs.

Furthermore, if any of the HBM chips are defective, the entire stack is discarded, resulting in inherently low production yields. As per the source cited by Wccftech, it has indicated that the overall yield of HBM currently stands at around 65%, and attempts to improve yield may result in decreased production volume.

Micron announced on February 26th the commencement of mass production of High Bandwidth Memory “HBM3e,” to be used in NVIDIA’s latest AI chip “H200” Tensor Core GPU. The H200 is scheduled for shipment in the second quarter of 2024, replacing the current most powerful H100.

On the other hand, Kim Ki-tae, Vice President of SK Hynix, stated on February 21st in an official blog post that while external uncertainties persist, the memory market is expected to gradually heat up this year. Reasons include the recovery in product demand from global tech giants. Additionally, the application of AI in devices such as PCs or smartphones is expected to increase demand not only for HBM3e but also for products like DDR5 and LPDDR5T.

Kim Ki-tae pointed out that all of their HBM inventory has been sold out this year. Although it’s just the beginning of 2024, the company has already begun preparations for 2025 to maintain its market-leading position.

Per a previous TrendForce press release, the three major original HBM manufacturers held market shares as follows in 2023: SK Hynix and Samsung were both around 46-49%, while Micron stood at roughly 4-6%.

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• [News] Micron Begins Mass Production of HBM3e for NVIDIA’s H200
• [News] SK Hynix Announces Complete Sales of HBM for the Year, Memory Market Poised for Recovery

(Photo credit: SK Hynix)

According to the Economic Daily News, the AI wave is ushering in a demand for updated specifications in CMOS Image Sensors (CIS), with the global CIS leader, Sony Corporation, aggressively positioning itself to take advantage of this trend. As part of the semiconductor industry’s move towards localized production, Sony has placed significant orders with TSMC’s new Kumamoto plant in Japan, boosting the production volume for the fourth quarter and rapidly increasing the new plant’s capacity utilization.

TSMC does not comment on individual customers or orders. Industry sources point out that the CIS component market previously faced an inventory adjustment issue for over a year. Recently, with clients restarting stock replenishment in anticipation of a recovery, coupled with the AI effect, various end-use applications are adopting lenses developed specifically for AI applications. This shift is expected to drive a new wave of demand for replacing old lenses with new ones to capitalize on AI lens opportunities.

Sony is optimistic about future opportunities in automotive and consumer sectors, and intends to extensively utilize TSMC’s 22nm process for producing CIS components and Image Signal Processors.

Furthermore, to seize the AI business opportunities, Sony has launched Digital Signal Processors (DSP) equipped with AI algorithms, which are expected to enhance applications such as human motion analysis, image processing enhancement, or human tracking. Especially with Sony securing large orders from clients, it is poised to become a major product line in the AI era.

TSMC’s new Kumamoto plant in Japan recently opened and is in the equipment installation phase, with production expected to start as early as the fourth quarter, focusing on 40, 28/22 nm processes for automotive and industrial clients.

The joint venture company for TSMC’s Japan plant, JASM, includes Sony as the largest shareholder besides TSMC. Sony has been a major client of TSMC for outsourced wafer production for many years. With the Kumamoto plant set to start production by the end of the year, Sony is almost certain to secure a significant share of wafer capacity, becoming a major client that fills the capacity utilization rate of TSMC’s Kumamoto plant.

(Image: TSMC)

According to TechNews, Taiwan’s semiconductor foundry, PSMC (Powerchip Semiconductor Manufacturing Corporation) recently announced its collaboration with Tata Electronics in India to establish the country’s first 12-inch wafer fabrication plant in Dholera, Gujarat. In an interview on the 4th, Chairman Frank Huang stated that Powerchip’s role primarily involves technology transfer, rather than financial investment, with Tata Group’s wafer plant expected to break ground on March 12.

Huang disclosed that the initiative is 70% funded by the Indian government, which had actively sought Taiwanese semiconductor firms to assist in India. This partnership with India will see PSMC aiding in the plant’s construction, while the operational responsibilities will wholly fall under India’s purview.

Following the agreement between the two parties on February 6, the groundbreaking ceremony, to be presided over by the President of India, is scheduled for this month on the 12th, with Huang himself attending.

Furthermore, Huang mentioned three major projects by the Indian government, including the collaboration between PSMC and Tata, support for Micron Technology’s manufacturing presence in India, and a back-end packaging initiative. Through PSMC’s assistance, the Tata Group plans to produce power management ICs, display drivers, microcontrollers, and high-performance computing logic chips at the 12-inch wafer facility, targeting automotive, computing and data storage, wireless communication, and artificial intelligence application markets.

(Image: PSMC)

In recent years, with the continuous surge in demand for Silicon Carbide (SiC) substrates, the call for cost reduction in SiC has been growing stronger, as the ultimate product price remains the key determinant for consumers. The cost of SiC substrates accounts for the highest proportion in the entire cost structure, reaching around 50%.

This means that cost reduction and utilization rate improvement in the substrate segment are particularly crucial. Therefore, large-size substrates, due to their cost advantages, are gradually being placed with high expectations.

According to the calculation by Chinese SiC substrate manufacturer TankeBlue Semiconductor, upgrading from 4 inches to 6 inches is expected to reduce costs by 50% per unit; from 6 inches to 8 inches, costs are expected to decrease by an additional 35% on top of that.

Meanwhile, 8-inch substrates can yield more chips, resulting in lower edge wastage. In simple terms, 8-inch substrates offer higher utilization rate, which is the main reason why major manufacturers are actively developing them.

Currently, 6-inch SiC substrates are still dominant, but 8-inch substrates are beginning to penetrate the market. For instance, in July 2023, Wolfspeed announced that its 8-inch fab had begun shipping SiC MOSFETs to Chinese customers, indicating its bulk shipment of 8-inch SiC substrates. TankeBlue Semiconductor has also started small-scale shipments of 8-inch substrates, with plans to achieve medium-scale shipments by 2024.

Accelerated Advancement of 8-Inch SiC Substrate Lineup

Since Wolfspeed first showcased samples in 2015, the 8-inch SiC substrate has undergone a development history of 7-8 years, with significant acceleration in technology and product development in the past two years.

Looking at international manufacturers, aside from Wolfspeed, which has achieved mass production, there are seven SiC substrate, epitaxial, expected to achieve mass production of 8-inch substrates this year or in the next 1-2 years.

In terms of investment, Wolfspeed continues to construct the John Palmour Silicon Carbide Manufacturing Center (SiC substrate facility) in North Carolina, USA. This facility will further drive the expansion of substrate production capacity to meet the increasing demand for 8-inch wafers.

Coherent also announced plans last year to expand its production of 8-inch substrates and epitaxial wafers, with large-scale expansion projects in the United States and Sweden. In terms of product export channels, Coherent has received a USD 1 billion investment from Mitsubishi Electric and Denso to provide long-term 6/8-inch SiC substrates and epitaxial wafers to both companies.

STMicroelectronics also invested in the 8-inch domain last year by partnering with Hunan Sanan Semiconductor to construct an 8-inch SiC fab. The latter will accompany it by establishing an 8-inch SiC substrate plant, ensuring stable material supply for the joint venture. Simultaneously, ST is developing its own substrates and previously collaborated with Soitec to achieve mass production of 8-inch SiC substrates.

Turning to Chinese manufacturers, currently, over 10 enterprises have entered the sampling and small-scale production stages for 8-inch SiC substrates. These include companies such as Semisic Crystal Co., Jingsheng Mechanical & Electrical Co., SICC Co., Summit Crystal Semiconductor Co., Synlight Semiconductor Co., TanKeBlue Semiconductor Co., Harbin KY Semiconductor, IV Semitec, Sanan Semiconductor, Hypersics, and Yuehaijin Semiconductor Materials Co.

In addition to the mentioned companies, there are many other Chinese manufacturers currently researching 8-inch substrates, such as GlobalWafers, Dongni Electronics, Hesheng Silicon Industry, Tiancheng Semiconductor.

At present, the gap between Chinese substrate manufacturers and international giants has narrowed significantly. Companies like Infineon have established long-term partnerships with Chinese manufacturers such as SICC Co. and TanKeBlue Semiconductor Co.. From a technological standpoint, this narrowing gap reflects the overall improvement in substrate technology globally. Moving forward, concerted efforts from various manufacturers are expected to drive the development of 8-inch substrate technology.

Overall, there is a growing momentum in the overall development of 8-inch SiC substrates, with significant breakthroughs in both quantity and quality.

Global 8-Inch SiC Fabs Accelerate Expansion

As substrate materials continue to break through technological ceilings, the expansion scale of global 8-inch SiC fabs reached new heights in 2023.

As per TrendForce, approximately 12 expansion projects related to 8-inch wafers were implemented in 2023. Among them, 8 projects were led by global manufacturers such as Wolfspeed, Onsemi, STMicroelectronics, Infineon, Rohm, and others. STMicroelectronics also collaborated with Sanan Semiconductor on one project. Additionally, 3 projects were spearheaded by Chinese manufacturers such as Global Power Technology, United Nova Technology Co., and J2 Semiconductor.

From a regional perspective, significant investments in new 8-inch SiC fabs are expected in key regions such as Europe, America, Japan, South Korea, China, and Southeast Asia. As of now, there are approximately 11 8-inch fabs either under construction or planned globally (with clearer details).

These include 2 facilities by Wolfspeed (in Mohawk, USA, and Saarland, Germany), 1 by Bosch (in Roseville, USA), 1 self-built by STMicroelectronics (in Catania, Italy), 1 joint venture with Sanan (in Chongqing, China), 1 by Infineon (in Kulim, Malaysia), 1 by Mitsubishi Electric (in Kumamoto, Japan), 2 by Rohm (in Chikugo, Japan, and Kunitomi, Japan), 1 by ON Semiconductor (in Bucheon, South Korea), and 1 by Fuji Electric (in Matsumoto, Japan).

Regarding the expansion directions of manufacturers, Bosch and ON Semiconductor’s investments in 2023 are directly aimed at the automotive SiC market. STMicroelectronics’s planned 8-inch SiC chip factory in Italy also targets the electric vehicle market. While other manufacturers have not explicitly stated the application direction of future production capacity, electric vehicles are the primary growth engine for SiC both currently and in the future, making it a focal point for expansion among major manufacturers.

In the electric vehicle sector, the 800V high-voltage platform has emerged as a clear development trend. The 800V platform requires higher-voltage power semiconductor components, prompting manufacturers to begin developing 1200V SiC power devices.

From a cost perspective, although 6-inch wafers are currently mainstream in the short term, the trend towards larger sizes like 8-inch is inevitable for cost reduction and efficiency improvement purposes. Therefore, the electric vehicle market is expected to drive continuous growth in demand for 8-inch wafers in the future.

From a supply chain perspective, transitioning to 8-inch wafers represents a breakthrough for SiC manufacturers. Per industry insights, the 6-inch SiC device market has entered a phase of intense competition, particularly in the SiC JBD. For smaller-scale and less competitive enterprises, profit margins are increasingly squeezed, indicating an impending round of consolidation and restructuring in the future.

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• [In-Depth Analyses] China Advances to 8-Inch SiC Substrates in 2023