Rapidus, a foundry company established through Japanese government-industry collaboration, aims to mass-produce 2-nanometer chips by 2027. According to Rapidus, Canadian artificial intelligence (AI) chip startup Tenstorrent is set to become Rapidus’ 2nm client.

On February 27th, Rapidus announced a collaboration with Tenstorrent to jointly develop and manufacture edge AI accelerators based on 2nm logic technology. Tenstorrent will be responsible for the design/development of the AI chips, while Rapidus will handle production utilizing its under-construction factory in Hokkaido.

Rapidus had announced its collaboration with Tenstorrent in November 2023 to accelerate the development of AI chips, and this collaboration now extends into the realm of manufacturing.

This marks the first public announcement by Rapidus of securing a client (contract manufacturing order) for the most advanced chips. However, Rapidus has not disclosed details such as production volume or financial terms.

Atsuyoshi Koike, President of Rapidus, stated at a press conference held on February 27th, “In the future, AI will be utilized in all products, and the ability to swiftly produce AI chips that meet customer demands is crucial for competitiveness.”

As per a report from Asahi News, Tenstorrent is currently collaborating with TSMC and Samsung. Tenstorrent’s CEO, Jim Keller, stated, “We will be producing various products. Many people are looking forward to our collaboration with Rapidus.”

Rapidus is expected to mass-produce logic chips of 2 nanometers or less by 2027. The first plant, “IIM-1,” located in Chitose City, Hokkaido, began construction in September 2023. The trial production line is scheduled to start in April 2025, with mass production slated to begin in 2027.

Per NHK’s report, At a press conference held in Chitose City on January 22nd, Junichi Koike announced that the construction of the 2-nanometer plant is proceeding smoothly, and the trial production line is scheduled to be operational by April 2025 as originally planned.

Regarding the construction of the plant, Koike stated, “There has been no delay even for a day; it is progressing according to schedule.” He also mentioned that they are also considering the construction of a second and third plant in the future.

After the groundbreaking ceremony held in September 2023, the foundation work for Rapidus’ 2-nanometer factory was mostly completed by December at the same year. Construction of the above-ground factory building commenced in January this year (2024). The framework of the factory is expected to be completed by April or May this year, with the factory anticipated to be completed by December this year (2024).

Established in August 2022, Rapidus was jointly founded by eight Japanese companies, including Toyota, Sony, NTT, NEC, Softbank, Denso, Kioxia (formerly Toshiba Memory Corporation), and Mitsubishi UFJ, who invested collectively in its establishment.

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(Photo credit: Rapidus)

NVIDIA, the global leader in artificial intelligence (AI) chips, is set to commence pre-orders for its AI chip H20 specially designed for the Chinese market by the end of March this year in response to US export bans, according to sources cited by a report from STAR Market Daily.

However, due to consecutive reductions in specifications, the cost-performance ratio has diminished, prompting cautious attitudes among Chinese distributors.

The report further mentions that by the end of 2022, the US Department of Commerce restricted the export of NVIDIA AI chips to China due to concerns about their potential military use. In response, NVIDIA has repeatedly reduced product performance to comply with US regulations. The H20 chip, derived from the H800, is specifically designed as a ‘special edition’ for the Chinese market.

Citing industry sources, STAR Market Daily‘s report also states that H20 will be available for pre-order following NVIDIA’s GTC 2024 conference (March 18th to 21st), with deliveries possible within a month. The sources note that H20’s performance is approximately one-fourth that of H100, resulting in a less favorable cost-performance ratio. Additionally, production capacity is unable to meet demand, with mass production expected to commence in the second half of this year.

A distributor in Beijing pointed out that currently, there is not significant demand for the H20 chip, primarily due to its relatively low cost-performance ratio. Chinese-made AI chips serve as viable alternatives.

The same distributor noted that most of the foundational technology for computing power providers is still supported by NVIDIA. The advantages of adopting the H20 lie in its compliance and low migration costs. However, the trend toward self-developed AI chip in China is a long-term certainty, presenting a choice between the two options.

The distributor further emphasized that NVIDIA’s introduction of the H20 is primarily aimed at stabilizing its presence in the Chinese market. As long as the product specifications slightly surpass those of domestically produced chips, it should suffice. However, whether there is demand for this chip still requires market validation.

Another distributor from the Shenzhen cited in the report also stated that it is uncertain whether they will stock the H20 chip, as their decision depends on subsequent market demand.

Regarding the need for H20, TrendForce believes Chinese companies will continue to buy existing AI chips in the short term. NVIDIA’s GPU AI accelerator chips remain a top priority—including H20, L20, and L2—designed specifically for the Chinese market following the ban.

At the same time, major Chinese AI firms like Huawei, will continue to develop general-purpose AI chips to provide AI solutions for local businesses. Beyond developing AI chips, these companies aim to establish a domestic AI server ecosystem in China.

TrendForce recognizes that a key factor in achieving success will come from the support of the Chinese government through localized projects, such as those involving Chinese telecom operators, which encourage the adoption of domestic AI chips.

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(Photo credit: NVIDIA)

The previously elusive NVIDIA data center GPU, H100, has seen a noticeable reduction in delivery lead times amid improved market supply conditions, as per a report from Tom’s Hardware. As a result, customers who previously purchased large quantities of H100 chips are reportedly starting to resell them.

The report further points out that the previously high-demand H100 data center GPU, driven by the surge in artificial intelligence applications, has seen a reduction in delivery wait times from a peak of 8-11 months to 3-4 months, indicating a relief in supply pressure.

Additionally, with major cloud providers such as AWS, Google Cloud, and Microsoft Azure offering easier access to AI computing services for customers, enterprises that previously purchased large quantities of H100 GPUs have begun further reselling these GPUs.

For instance, AWS introduced a new service allowing customers to rent GPUs for shorter periods, resolving previous chip demand issues and shortening the waiting time for artificial intelligence chips.

The report also indicates that customers are reselling these GPUs due to reduced scarcity and the high maintenance costs, leading these enterprise customers to make such decisions. This situation contrasts starkly with the market shortage a year ago.

However, even though the current difficulty in obtaining H100 GPUs has significantly decreased, the artificial intelligence market remains robust overall. The demand for large-scale artificial intelligence model computations persists for some enterprises, keeping the overall demand greater than the supply, thereby preventing a significant drop in the price of H100 GPUs.

The report emphasizes that the current ease of purchasing H100 GPUs has also brought about some changes in the market. 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 but at potentially more affordable prices, potentially contributing to a more equitable market condition.

TrendForce’s newest projections spotlight a 2024 landscape where demand for high-end AI servers—powered by NVIDIA, AMD, or other top-tier ASIC chips—will be heavily influenced by North America’s cloud service powerhouses.

Microsoft (20.2%), Google (16.6%), AWS (16%), and Meta (10.8%) are predicted to collectively command over 60% of global demand, with NVIDIA GPU-based servers leading the charge.

However, NVIDIA still faces ongoing hurdles in development as it contends with US restrictions.

TrendForce has pointed out that, despite NVIDIA’s stronghold in the data center sector—thanks to its GPU servers capturing up to 70% of the AI market—challenges continue to loom.

Three major challenges are set to limit the company’s future growth: Firstly, the US ban on technological exports has spurred China toward self-reliance in AI chips, with Huawei emerging as a noteworthy adversary. NVIDIA’s China-specific solutions, like the H20 series, might not match the cost-effectiveness of its flagship models, potentially dampening its market dominance.

Secondly, the trend toward proprietary ASIC development among US cloud behemoths, including Google, AWS, Microsoft, and Meta, is expanding annually due to scale and cost considerations.

Lastly, AMD presents competitive pressure with its cost-effective strategy, offering products at just 60–70% of the prices of comparable NVIDIA models. This allows AMD to penetrate the market more aggressively, especially with flagship clients. Microsoft is expected to be the most enthusiastic adopter of AMD’s high-end GPU MI300 solutions in 2024.

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• [News] Micron Begins Mass Production of HBM3e for NVIDIA’s H200
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(Photo credit: NVIDIA)

The U.S. memory giant Micron Technology has started the mass production of high-bandwidth memory “HBM3e,” which will be utilized in NVIDIA’s latest AI chips.

Micron stated on February 26th that HBM3e consumes 30% less power than its competitors, meeting the demands of generative AI applications. Micron’s 24GB 8H HBM3e will be part of NVIDIA’s “H200” Tensor Core GPUs, breaking the previous exclusivity of SK Hynix as the sole supplier for the H100.

Per TrendForce’s earlier research into the HBM market, it has indicated that NVIDIA plans to diversify its HBM suppliers for more robust and efficient supply chain management. The progress of HBM3e, as outlined in the timeline below, shows that Micron provided its 8hi (24GB) samples to NVIDIA by the end of July, SK hynix in mid-August, and Samsung in early October.

As per a previous report from NVIDIA last year, the H200 is scheduled to ship in the second quarter of this year (2024), replacing the current most powerful H100 in terms of computing power. Micron’s press release on February 26th has further solidified that Micron will begin shipping its 24GB 8H HBM3e in the second calendar quarter of 2024.

In the same press release, Micron’s Chief Business Officer, Sumit Sadana, has also indicated that“AI workloads are heavily reliant on memory bandwidth and capacity, and Micron is very well-positioned to support the significant AI growth ahead through our industry-leading HBM3e and HBM4 roadmap, as well as our full portfolio of DRAM and NAND solutions for AI applications.”

HBM is one of Micron’s most profitable products, and its complex construction process is part of the reason. Micron previously predicted that HBM revenue could reach hundreds of millions of dollars in 2024, with further growth expected in 2025.

Micron has further announced that it will share more about its industry-leading AI memory portfolio and roadmaps at the “GPU Technology Conference” (also known as the GTC conference) hosted by NVIDIA on March 18th.

Previously, Micron indicated in a December 2023 conference call with investors that generative AI could usher in a multi-year growth period for the company, with projected memory industry revenue reaching historic highs in 2025. They also mentioned at the time that HBM3e, developed for NVIDIA’s H200, had entered its final quality control phase.

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(Photo credit: Micron)

According to a report from Bloomberg, sources reveal that Israeli firm Tower Semiconductor has proposed a USD 9 billion investment to establish a plant, while India’s Tata Group has proposed an USD 8 billion fab. Sources further indicate that both proposed locations for these projects are in the state of Gujarat.

Tower Semiconductor plans to establish a plant in India, which is expected to establish a foothold in emerging markets and move past the shadow of the failed Intel deal. While the company’s sales are far behind those of Intel and TSMC, it produces components for major clients like Broadcom and holds a significant position in rapidly growing fields like electric vehicles.

Sources cited in the report say that Tower Semiconductor hopes to expand its facility over the next decade, with the ultimate goal of producing 80,000 wafers per month. If approved by the Indian government, the plant could become India’s first semiconductor facility operated by a major player in the industry.

Previous reports from India’s media outlet, the Economic Times, have also indicated that India’s Tata group may collaborate with Taiwanese semiconductor foundries like UMC or PSMC to establish the first fab in India. Initially, they would produce mature process chips with a planned monthly capacity of 25,000 wafers. If successful, it would mark Taiwan’s semiconductor industry’s first venture into India.

Additionally, Japan’s Renesas Electronics is seeking to collaborate with CG Power and Industrial Solutions, a subsidiary of the Murugappa Group, to establish a chip packaging plant.

Semiconductors have become a significant geopolitical battleground, with the United States, Japan, and China investing heavily in domestic chip capacity. India’s plan to establish itself as a semiconductor manufacturing hub includes attracting overseas chipmakers’ investments to catch up and save on high import costs while bolstering the local smartphone manufacturing industry.

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(Photo credit: Tata Group)