TSMC, the leading semiconductor foundry, recently announced plans to establish a 2nm production line in the US, while attention remains on expansion progress in Taiwan.

According to a report from MoneyDJ, it has indicated that the 2nm fab in Hsinchu’s Baoshan is proceeding steadily as planned, and the 2nm fab in Kaohsiung is gaining momentum, with the first tool-in expected by year-end.

Initially, both fabs will achieve a monthly capacity of approximately 30,000 to 35,000 wafers. By 2027, their combined capacity is set to exceed 100,000 wafers, marking the mainstream transition to the next generation of processes.

As per industry sources cited by MoneyDJ, TSMC’s 2nm production bases are located in Hsinchu Science Park and Kaohsiung, and Baoshan’s Phase 2 will begin tool-in in the second quarter, with a “mini line” to be established by year-end and mass production targeted for Q4 2025, starting with an initial monthly capacity of approximately 30,000 to 35,000 wafers.

Meanwhile, the Kaohsiung plant is expected to commence equipment installation by year-end, ahead of the original schedule, aiming for mass production in the first half of 2026 with an initial monthly capacity plan similar to Baoshan’s 30,000 to 35,000 wafers.

The same sources also indicate that after the formal mass production of the Baoshan and Kaohsiung plants, they will enter the capacity ramp-up phase, aiming to achieve a combined capacity of around 110,000 to 120,000 wafers per month by 2027. Both fabs will produce the first-generation 2nm and the second-generation N2P with backside power rail technology. The next-generation 1.4nm (A14) is expected to commence production in the second half of 2027, potentially located in Taichung.

In the 2nm client landscape, Apple remains a frontrunner, earmarking the technology for flagship smartphones. Intel has also expressed interest, with AMD, NVIDIA, and MediaTek expected to follow suit.

Looking at the process roadmap, this year’s iPhone 16 will use N3E, while next year’s model will adopt N3P. Thus, the first consumer product leveraging TSMC’s 2nm process is anticipated to launch in 2026.

Previously at its earnings call, TSMC disclosed the development of a backside power rail solution for N2, tailored for HPC applications.

TSMC is scheduled to hold an earnings call on April 18th. It is anticipated that the related topics around its 2nm process will also be the focus of attention on the day of the conference.

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(Photo credit: TSMC)

Qualcomm was fined NTD 23.4 billion by Taiwan’s Fair Trade Commission in 2017 for antitrust violations. Both parties reached a settlement the following year, which sparked some official discontent. However, a report from Korean media outlet The Elec has pointed out that this move ultimately contributed to Taiwan’s long-term industrial growth.

Under the settlement in the subsequent year, Qualcomm reportedly committed to investing USD 700 million in Taiwan over the next five years. This included establishing operational and manufacturing facilities, testing centers, and other investments, with the plan set to conclude by the end of 2023.

Qualcomm was accused of leveraging modem chip patents to force companies into unfavorable licensing agreements, resulting in fines in Taiwan, China (2015), South Korea (2016), and the EU (2018). Taiwan initially imposed a fine of NTD 23.4 billion on Qualcomm but later reduced it, instead requiring Qualcomm to commit to investing USD 700 million over the next five years to promote local industries such as 5G.

The report points out that, at that time, Taiwan lagged behind the US, China, Japan, and South Korea in 5G development, necessitating this compromise. The reports suggest that this decision, which now appears to be correct, was not intended to boost the 5G industry but to pivot towards the semiconductor sector. Over the past five years, industry dynamics have rapidly shifted focus to the semiconductor sector, with Qualcomm channeling substantial funds into Taiwan’s chip packaging industry.

Taiwanese officials reportedly stated that Qualcomm has successfully implemented its industrial investment plan over the past five years while maintaining a strong relationship with Taiwan. All aspects of the promised investment have been fulfilled, with the investment amount exceeding USD 1.4 billion, far surpassing the initial commitment of USD 700 million—effectively doubling Qualcomm’s investment amount.

Reports further indicate that Siliconware Precision Industries (SPIL) has confirmed Qualcomm’s purchase of 500 pieces of equipment dedicated to handling Qualcomm’s backend demands. Additionally, a South Korean packaging company informed TheElec that they lost Qualcomm orders to Taiwanese competitors over the past few years. In essence, Taiwan’s government initiative has also benefited the local packaging industry, despite this not being the original intention.

While SPIL’s performance was weak during the global chip market downturn last year, its revenue steadily grew from 2018 to 2022. Qualcomm not only provides equipment and orders to SPIL but also deploys engineers directly at SPIL’s plants to ensure proper chip packaging.

Qualcomm continues to entrust its high-end chip packaging orders to Amkor’s Incheon plant. However, the report suggests that Qualcomm’s close partnership with Taiwanese packaging companies may lead to more opportunities.

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(Photo credit: Qualcomm)

Recently, major memory manufacturers such as Micron, Samsung, and Western Digital have all announced price hikes. Industry sources indicate that since 1Q24, memory manufacturers stay steadfastly in controlling supply and raising prices. Coupled with the impact of the recent earthquake in Taiwan, the supply-demand imbalance has further driven up memory prices.

However, it’s worth noting that according to industry experts, the primary driving force behind the recent price increases in the memory market is still from manufacturers. As to the demand side, significant growth are mainly seen in industrial control needs, AI large models, and automotive intelligentization, while other fields have not yet seen obvious growth.

Regarding the impact of the 403 earthquake, TrendForce expects the influence on the output bit of DRAM in 2Q24 to remain within 1%. Specifically, due to Micron’s earthquake-related damages being more concentrated in advanced processes, TrendForce does not rule out the possibility of Micron’s Server DRAM final transaction prices increasing. The subsequent price trends still require observation.

• Has Micron Increased Prices by More Than 20% in Q2?

On April 9th, Taiwanese media reported that Micron has proposed price increases of over 20% for its products in Q2 to most customers, with price negotiations still ongoing.

It is reported that after the earthquake on April 3, Micron temporarily suspended the announcement of DRAM product quotation for the second quarter.

Currently, TrendForce maintains its previous expectations for the second-quarter contract price of Mobile DRAM, with an increase of about 3-8% QoQ. As for Server DRAM, due to the earthquake-related damages to Micron being more concentrated in advanced processes, TrendForce does not rule out the possibility of Micron’s Server DRAM final transaction prices increasing, and the subsequent price trends still require observation. In regard to HBM, since most of Micron’s HBM 1beta production and TSV lines are located in Hiroshima, Japan, supply or price remain unchanged.

In the spot market, some module manufacturers like Kingston and ADATA have restarted quoting prices, but no price increase has been implemented yet. TrendForce believes that the earthquake’s impact on pushing up prices is limited.

Overall, due to the relatively low inventory of DDR3, there is still room for price increases. Whereas, DDR4 and DDR5 inventory is comparatively sufficient, coupled with weak demand, which are expected bring the situation of small consecutive price increases caused by the earthquake to return back to normal within a few days.

• Western Digital Continuously Increases NAND Flash and HDD Prices

On April 8, Western Digital confirmed for the first time that there is a shortage of supply for both HDD and SSD, and issued formal customer letters notifying of price adjustments for NAND Flash and hard drive products. Western Digital stated that the demand for flash memory and hard drive products has exceeded expectations, leading to supply shortages. Prices for these products will continue to be adjusted this quarter, with some adjustments taking immediate effect.

Western Digital acknowledged that it will perform the frequent price reviewing and adjust it accordingly. Furthermore, Western Digital also stated that its ability to handle orders outside of the plan is quite limited, so any order changes need to be notified in advance.

• Samsung Raises Prices of Enterprise SSD?

In the past two weeks, rumor has it that enterprise SSD fell into a supply shortage. According to industry sources, due to the optimistic outlook for SSD to become a part of AI in the future, paired with recent supply tensions, their prices have started to rise. Samsung is rumored to increase prices for enterprise SSD by 20-25% in 2Q24, reversing the downward trend seen in 2023.

Reportedly, Samsung initially planned to raise prices by about 15% compared to the previous quarter, but higher-than-expected demand led Samsung to expand the price hike. Samsung’s enterprise SSD accounts for approximately half of the market share, thus exerting a significant influence on pricing decisions.

A study by TrendForce on March 7 shows that in 4Q23, Samsung ranked first globally in the Enterprise SSD market with a market share of 41.7%, followed by SK Hynix (33.2%), Micron (10.8%), Kioxia (9.4%), and Western Digital (4.9%).

• TrendForce Released Forecasts for DRAM and NAND Flash Contract Prices for 2Q24

In terms of overall price trends, TrendForce estimates that although the inventory of DRAM suppliers has decreased, it has not yet returned to a healthy level. Furthermore, as they gradually shake of the loss situation, suppliers are expected to further increase their capacity utilization rates.

However, due to the lackluster overall demand outlook for this year and the large price increases by suppliers since 4Q23, the momentum for inventory replenishment is expected to weaken. Therefore, TrendForce anticipates that the quarterly increase in DRAM contract prices in the second quarter will converge to 3-8%.

Regarding NAND Flash, TrendForce stated that, except for Kioxia and Western Digital, which have been increasing their capacity utilization rates since 1Q24, other suppliers are generally maintaining a low production strategy.

Although the procurement volume of NAND Flash in 2Q24 has declined slightly compared to 1Q24, the overall market climate continues to be influenced by reduced supplier inventory and the impact of production cuts. Consequently, TrendForce forecasts a strong increase of around 13-18% in NAND Flash contract prices in 2Q24.

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(Photo credit: Samsung)

In 2024, trade tensions between China and the EU have intensified. On April 10th, the European Commission updated its report on distortive economic practices in China, expanding to include new industries such as telecommunications equipment, semiconductors, railways, renewable energy, and electric vehicles.

According to a report from Commercial Times, despite strong protests from China, the updated report from the European Union indicates that EU manufacturers may have filed anti-dumping complaints against Chinese chip and clean technology producers.

The Hong Kong Economic Journal (HKEJ) reported on April 11 that the latest updated version of the EU report, namely ‘COMMISSION STAFF WORKING DOCUMENT ON SIGNIFICANT DISTORTIONS IN THE ECONOMY OF THE PEOPLE’S REPUBLIC OF CHINA FOR THE PURPOSES OF TRADE DEFENCE INVESTIGATIONS‘, spans 712 pages. In addition to retaining industries like steel, aluminum, chemicals, and ceramics from the initial 2017 report, it has expanded to cover various new areas.

These include the role of the Chinese government in planning economic objectives, the importance of state-owned enterprises, special treatment in land, labor, raw materials, and energy for specific industries, and state subsidies, alleging distortive practices.

Previously, the EU’s new regulation on “Foreign Subsidies” came into effect in July 2023, followed by an announcement in October of the same year to initiate an anti-dumping investigation into Chinese electric vehicles. In response, China launched an anti-dumping investigation in January this year on distilled brandy containers of 200 liters or less originating from the EU.

Subsequently, the EU took action against Chinese company CRRC, prompting its withdrawal from public procurement tenders in Bulgaria. Recently, the EU escalated by announcing an investigation into Chinese-made wind turbines.

Despite escalating tensions in China-EU trade relations, when Chinese Minister of Commerce Wang Wentao visited Europe on April 7th, one of his main tasks was said to stabilize China-EU relations, maintain dialogue on trade disputes, and pave the way for Chinese President Xi Jinping’s planned visit to France in early May.

During Wang Wentao’s visit, he denied that Chinese automakers gain a competitive advantage through massive subsidies and emphasized that the anti-dumping investigation into EU brandy launched in January is unrelated to the electric vehicle dispute.

However, on April 10th, officials from China’s Ministry of Commerce Trade Remedy Bureau expressed a firm stance during a meeting with Lucais, Director of Trade Defence at the European Commission in Brussels. China stated that the updated report distorts China’s policies, market environment, and economic system, providing grounds for discriminatory anti-dumping measures. China expressed strong concern and opposition to this.

On the other hand, German Chancellor Olaf Scholz is set to lead a delegation to China on April 13th, with top executives from German companies such as BMW and Mercedes-Benz accompanying him.

According to a recent Reuters report, despite a nearly one-fifth decline in imports from China between 2022 and 2023, Germany maintains a high dependency on China for categories like chemicals, computers and solar cells. The “clear structural de-risking” is reportedly yet evident.

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Memory manufacturer Micron Technology stated on April 11 that the earthquake in Taiwan on April 3 has impacted its DRAM supply, estimated to be between 4-6% (mid-single digit percentage).

Micron emphasized in an 8-K filing with the U.S. Securities and Exchange Commission (SEC) that the earthquake did not cause permanent damage to its facilities, infrastructure, or equipment, and will not have a long-term effect on DRAM supply.

Micron noted that as of now, DRAM production post-earthquake has not fully recovered, but progress in facility restoration is promising thanks to efforts by the Taiwan team.

In February this year, Micron announced the commencement of mass production of high-bandwidth memory (HBM) chips, designed for use in NVIDIA’s H200 GPU for AI applications.

In March, Micron CEO Sanjay Mehrotra indicated that the company’s HBM chips earmarked for AI applications are sold out for 2024, with much of the 2025 supply already allocated.

Micron previously described HBM chips as utilizing stacked DRAM technology. The company did not specify whether the HBM supply would be affected by the earthquake.

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 47.5%, while Micron stood at roughly 5%.

As per Micron’s previous report, regarding growth outlooks for various end markets in 2024, the annual growth rate for the data center industry has been revised upward from mid-single digits to mid-to-high single digits, while the PC industry’s annual growth rate remains at low to mid-single digits. AI PCs are expected to capture a certain market share in 2025. The annual growth rate for the mobile phone industry has been adjusted upward from modest growth to low to mid-single digits.

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(Photo credit: Micron)