According to a report from Economic Daily News, Luxshare, a crucial player in the Chinese Apple supply chain, is said to be entering NVIDIA’s supply chain for the GB200, as it has announced the development of various components tailored for NVIDIA’s GB200 AI servers.

These components encompass connector, power-related items, and cooling products. The sources cited by the same report have noted that Luxshare’s focus areas align closely with Taiwanese expertise, setting the stage for another direct showdown with Taiwanese manufacturers.

Luxshare, previously not prominent in the server domain, has now reportedly made its move into NVIDIA’s top-tier AI products, attracting market attention. Especially given Luxshare’s swift entry into the iPhone supply chain previously, aggressively competing for orders with Taiwanese Apple suppliers.

As per the same report, Luxshare has revealed in its investor conference records that it has developed solutions corresponding to the NVIDIA GB200 AI server architecture, including products for electrical connection, optical connection, power management, and cooling. The company is reportedly said to be expected to offer solutions priced at approximately CNY 2.09 million and anticipates that the total market size will reach hundreds of billions of CNY.

If Luxshare adopts a similar strategy of leveraging its latecomer advantage in entering the NVIDIA AI supply chain, it will undoubtedly encounter intense competition.

Industry sources cited by the report also point out that Luxshare’s claim to supply components for NVIDIA’s GB200 is in areas where Taiwanese suppliers excel.

For instance, while connector is Luxshare’s core business, Taiwanese firms like JPC Connectivity and Lintes Tech also serve as suppliers of connectors for NVIDIA’s GB200 AI servers. They are poised to compete directly with Luxshare in the future.

In terms of power supply, Delta Electronics leverages its expertise in integrating power, cooling, and passive components to provide a comprehensive range of AI power integration solutions, from the grid to the chip. They cater to orders for power supplies for NVIDIA’s Blackwell architecture series B100, B200, and GB200 servers, and will also compete with Luxshare in the future.

When it comes to thermal management, Asia Vital Components and Auras Technology are currently the anticipated players in the market, and they are also poised to compete with Luxshare.

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• [News] NVIDIA’s H100 Chip Heat Declines, CoWoS Capacity Eases
• [News] Luxshare Acquires Leadership of Pegatron’s Kunshan Plant, Challenging Foxconn’s Dominance on iPhone Assembly?

(Photo credit: Luxshare)

The recent rapid downturn in the black market prices of AI servers equipped with NVIDIA’s highest-tier AI chip, the H100, in China, has attracted attention, as per a report from Economic Daily News. This fluctuation, triggered by US sanctions, has reportedly prompted concerns about its impact on overall supply and demand dynamics, and whether it will further squeeze normal market mechanisms.

Industry sources cited by the same report have revealed that the prices of AI servers equipped with the H100 chip have recently plummeted on the Chinese black market. This is primarily due to the imminent launch of NVIDIA’s next-generation high-end AI chip, the H200. With the transition between old and new products, scalpers who previously hoarded H100 chips to drive up prices are now offloading their large inventories.

As per a report from Reuters, despite the US expanding its ban on AI technology-related exports to China last year, some dealers are still taking risks. There is still trading of H100 chips in the Huaqiangbei electronics market in northern Shenzhen, but it has all gone underground. The chips are said to be mainly imported into China through purchasing agents or shell companies set up overseas, making them accessible to Chinese universities, research institutions, and even companies through special dealer channels.

Due to the US ban, both the H100 chip and AI servers equipped with it can only be traded on the black market, not openly. Scalpers have significantly inflated prices, with servers featuring the H100 chip reaching over CNY 3 million (over USD 420,000) in China, compared to the official price of USD 280,000 to USD 300,000, resulting in profits of over 10% for some middlemen after deducting logistics and tariffs.

With the H200 set to launch in the second quarter, the H100 will become the “previous generation” product. Consequently, middlemen who had hoarded H100 chips are eager to sell their inventory, leading to a rapid correction in prices.

Recently, servers with the H100 chip on the China black market have dropped to around CNY 2.7 to 2.8 million, with spot prices in Hong Kong falling to around CNY 2.6 million, representing a decline of over 10%.

According to a previous report from Reuters, in response to Chinese universities and research institutions reportedly acquired high-end AI chips from NVIDIA through distributors, a NVIDIA spokesperson stated that the report does not imply that NVIDIA or any of its partners violated export control regulations, and the proportion of these products in global sales is negligible. Nvidia complies with U.S. regulatory standards.

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• [News] NVIDIA’s H100 Chip Heat Declines, CoWoS Capacity Eases
• [News] NVIDIA’s H100 AI Chip No Longer Out of Reach, Inventory Pressure Reportedly Forces Customers to Resell

(Photo credit: NVIDIA)

NVIDIA’s upcoming next-generation high-end AI chip, the H200, is on the horizon. As per a report from Economic Daily News, currently, the mainstream high-end H100 chip has seen a decline in demand, putting an end to the previous state of supply shortages.

As per the same report, Taiwanese contract manufacturers openly acknowledge that the supply of H100 chips is indeed smoother now, primarily due to the alleviation of tight CoWoS advanced packaging capacity constraints.

Despite a significant short-term correction in the market price of H100 chips in China, Taiwan’s AI server manufacturers, such as Quanta and Inventec, are still striving to maximize shipments. This quarter, the momentum of AI server shipments is expected to see a significant boost.

From the perspective of server manufacturers, the demand and pricing of critical components are typically negotiated directly between cloud service providers (CSPs) and chip manufacturers like NVIDIA. Once the price and quantity are agreed upon, manufacturers are then commissioned to produce and ship the products.

Quanta emphasized that with the easing of tight capacity in upstream CoWoS advanced packaging, the supply of H100 chips has become smoother. Maintaining their previous stance, they anticipate that the momentum of AI server shipments will begin to show from this quarter onwards.

A previous report from tom’s hardware once emphasized that the ease of purchasing H100 GPUs has brought about some changes in the market as well. Customers now prioritize price and practicality when leasing AI computing services from cloud service providers.

Additionally, alternatives to the H100 GPU have emerged in the current market, offering comparable performance and software support. These may come at more affordable prices, potentially fostering a fairer market environment.

Mike Yang, Senior Vice President and General Manager of Quanta Cloud Technology (QCT), also mentioned recently that they expect to see a significant improvement in chip supply by June, which will subsequently boost server shipment performance in the second half of the year.

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• [News] NVIDIA’s H100 AI Chip No Longer Out of Reach, Inventory Pressure Reportedly Forces Customers to Resell
• [News] CoWoS Capacity Shortage Challenges AI Chip Demand, while Taiwanese Manufacturers Expand to Seize Opportunities

(Photo credit: NVIDIA)

As the competition in advanced semiconductor chip manufacturing industry heats up, EUV lithography machine has been sought after by the market, attracting great attention across the industry.

Currently, Intel has taken the lead by purchasing ASML’s High-NA EUV lithography equipment and announced the completion of assembly recently. Samsung is also stepping up its efforts by partnering with Zeiss, a supplier of components for ASML’s EUV lithography machine, to deepen cooperation in the EUV field. At the same time, rumor has surfaced about the delivery of ASML’s second High-NA EUV lithography machine, though the buyer remains undisclosed.

• Samsung and Zeiss to Deepen EUV-Related Cooperation

According to South Korean media The Korea Herald report, Jay Y. Lee, the vice chairman of Samsung Electronics, recently met with Karl Lamprecht, President and CEO of Zeiss, along with other company executives in Germany.

During the meeting, both parties agreed to expand cooperation in EUV technology and cutting-edge semiconductor equipment development to enhance their competitiveness in the foundry and memory chip sectors. Through this collaboration, Samsung aims to advance next-generation semiconductor technology, optimize chip manufacturing processes, and improve the yield of advanced chips.

Zeiss also plans to invest KRW 48 billion by 2026 to establish a research and development center in South Korea as a way to strengthen strategic cooperation with South Korean companies including Samsung.

As a developer of optical and optoelectronic solutions, Zeiss serves as the exclusive supplier of components for ASML’s EUV lithography machines, with each machine containing over 30,000 components made by Zeiss. Zeiss holds more than 2,000 core patents about EUV technology, and its expertise can make a significant difference in the production of high-performance advanced chips.

In the future, Samsung Electronics and Zeiss will further expand their cooperation in EUV technology and related fields of advanced semiconductor equipment.

• ASML has Delivered the Second High NA EUV Lithography Machine?

Recently, Intel announced it has completed installation of the ASML High NA EUV lithography machine, which has now entered the optical system calibration phase. This represents the first High NA EUV lithography machine produced by ASML, valued at up to EUR 350 million. Intel plans to use this equipment to produce advanced process chips below 1.8nm.

In addition to Intel, companies such as TSMC, Samsung, and Micron have also placed orders for the High NA EUV lithography machine from ASML. ASML’s financial report for the first quarter of this year revealed a total of EUR 3.6 billion order intakes, with EURO 656 million from EUV lithography machine orders. ASML recently delivered its second equipment without revelation of the buyer.

The two High NA EUV lithography machines are insufficient to meet the market demand for advanced process chips. Therefore, ASML plans to manufacture more high-end lithography equipment in the future to address the continuously growing market demand.

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• [News] ASML Reports China Accounts for 49% of Q1 Total Sales and 20% of Backlog Orders
• [News] ASML Points to Chip Industry Recovery Amid Export Control Risks

(Photo credit: ASML)

Per a report from TechNews, during Intel’s earnings call last week, CEO Pat Gelsinger stated that the supply of Core Ultra processors in the second quarter is limited due to insufficient wafer-level assembly capacity.

Gelsinger mentioned in the meeting that with the increasing demand for AI PCs and customers continually adding processor orders to Intel due to Windows update cycles, Intel’s AI PC CPU shipments for 2024 are expected to surpass the originally set target of 40 million units. In response, Intel is actively ramping up production to meet customer demand, with the current supply bottleneck primarily concentrated in the backend wafer-level assembly.

Wafer-level assembly is a technology where packaging is done on wafers before they are cut into chips, widely utilized in processors like Meteor Lake and future Core Ultra processors. However, in the face of overwhelming demand, this production bottleneck has led Intel’s Consumer Computing Division to anticipate second-quarter revenue to be roughly equivalent to that of the first quarter, around USD 7.5 billion.

To address this issue, Intel is actively enhancing its wafer-level assembly capacity to meet the growing orders. It is expected that the current tight situation will be alleviated in the second half of 2024, facilitating further revenue growth for the Consumer Computing Division.

As per previous report by Economic Daily News, Intel has advanced packaging capacity in Oregon and New Mexico in the United States and is actively expanding its advanced packaging capabilities in its new facility in Penang. It is noteworthy that Intel once stated its intention to offer customers the option to only use its advanced packaging solutions, expected to provide customers with greater production flexibility.

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• [News] From Technical Prowess to Integration Capability, TSMC and Intel Target Advanced Packaging to Seize Ecosystem Opportunities
• [News] NVIDIA Expands Advanced Packaging Supply Chain with Intel’s Inclusion, Diverting Orders from TSMC

(Photo credit: Intel)