Intel, according to South Korea’s media outlet TheElec, is actively promoting its 18A process (equivalent to 1.8 nanometers) to South Korean fabless chip companies.

The report cites industry sources revealing that Intel CEO Pat Gelsinger personally engaged with senior executives of these South Korean fabless IC design companies last year. He briefed them on the latest developments in Intel’s foundry plans.

The same source further indicates that Intel is vigorously marketing the 18A process to South Korean chip startups and pledges various benefits to them.

Last week, Intel unveiled its 14A process, equivalent to a 1.4-nanometer process, and announced that chips utilizing this process will enter mass production in 2027. Intel has also announced that it has secured USD 15 billion in orders during its event Intel Foundry Direct Connect at San Jose.

Intel continues to emphasize its goal of becoming the second-largest foundry by 2030, aiming to surpass current foundry runner-up Samsung Electronics and trailing behind market leader TSMC.

As for the mass production of the 18A process, Intel has indicated that it is scheduled to commence by the end of this year. This signifies that Intel’s process technology will surpass both Samsung and TSMC, as the latter two are currently preparing to launch 2-nanometer processes.

Samsung is planning to utilize the gate-all-around (GAA) transistor architecture, initially developed for the 3-nanometer process, for its upcoming 2-nanometer process. On the other hand, TSMC and Intel have opted to employ the fin field-effect transistor (FinFET) structure for their 3-nanometer chips.

Currently, these three major players are actively vying for customers. A report from the Business Korea has indicated that Samsung Electronics recently secured an order from the Japanese AI startup Preferred Networks (PFN) to produce semiconductors based on the 2-nanometer process.

Per the report, while this Japanese company initially planned to use TSMC’s process for producing their Gen 2 AI chips, they will now transition to Samsung’s 2-nanometer process.

Read more

• [News] Gelsinger Opens Up, as Intel Reportedly Expands Orders to TSMC
• [News] Samsung Secures 2-Nanometer Order from Japanese AI Startup Preferred Networks

(Photo credit: Intel)

Currently, the top three leaders—Samsung, SK Hynix, and Micron—in the HBM sector are undergoing unprecedented expansion. Below is an overview of the progress made by each of these giants in the realm of HBM:

• Samsung: HBM Production to Increase 2.5 Times in 2024, Another 2 Times in 2025

Samsung Electronics has begun expanding its HBM3 supply since the fourth quarter of 2023. Prior to this, internal messages within Samsung during the fourth quarter of 2023 indicated that samples of the next-generation HBM3e with an 8-layer stack had been provided to customers, with plans for mass production to commence in the first half of this year.

Han Jin-man, Executive Vice President in charge of Samsung’s semiconductor business in the United States, stated at CES 2024 this year that Samsung’s HBM chip production volume will increase 2.5 times compared to last year and is projected to double again next year.

Samsung officials also revealed that the company plans to increase the maximum production of HBM to 150,000 to 170,000 units per month before the fourth quarter of this year in a bid to compete for the HBM market in 2024.

Previously, Samsung Electronics spent KRW 10.5 billion to acquire the plant and equipment of Samsung Display located in Tianan City, South Korea, to expand HBM capacity. They also plan to invest KRW 700 billion to 1 trillion in building new packaging lines.

• SK Hynix: To Commence Mass Production of World’s First Fifth-Generation High-Bandwidth Memory HBM3e in March

According to the latest report from Korean media Moneytoday on February 20th, SK Hynix will commence mass production of the world’s first fifth-generation high-bandwidth memory, HBM3e, in March this year. The company plans to supply the first batch of products to NVIDIA within the next month.

However, SK hynix noted that it “cannot confirm any details related to its partner.”

In its financial report, SK Hynix indicated plans to increase capital expenditure in 2024, with a focus on high-end storage products such as HBM. The HBM production capacity is expected to more than double compared to last year.

Previously, SK Hynix forecasted that by 2030, its HBM shipments would reach 100 million units annually. As a result, the company has decided to allocate approximately KRW 10 trillion (approximately USD 7.6 billion) in CAPEX for 2024. This represents a significant increase compared to the projected CAPEX of KRW 6 to 7 trillion in 2023, with an increase ranging from 43% to 67%.

The focus of the expansion is on constructing and expanding factories. In June of last year, Korean media reported that SK Hynix was preparing to invest in backend process equipment to expand its HBM3 packaging capabilities at its Icheon plant. By the end of this year, it is expected that the scale of backend process equipment at this plant will nearly double.

Furthermore, SK Hynix is also set to construct a state-of-the-art manufacturing facility in Indiana, USA. According to the Financial Times, this South Korean chip manufacturer will produce HBM stacks at this facility, which will be used for NVIDIA GPUs produced by TSMC.

• Micron: Continuing the Pursuit, Betting on HBM4

Micron holds a relatively low share in the global HBM market. In order to narrow this gap, Micron has placed a significant bet on its next-generation product, HBM3e.

Sanjay Mehrotra, CEO of Micron, stated, ” Micron is in the final stages of qualifying our industry-leading HBM3e to be used in NVIDIA’s next-generation Grace Hopper GH200 and H200 platforms.”

Micron plans to begin mass shipments of HBM3e memory in early 2024. Mehrotra emphasized that their new product has garnered significant interest across the industry, implying that NVIDIA may not be the sole customer ultimately utilizing Micron’s HBM3e.

In this competition where there is no first-mover advantage, Micron seems to be betting on the yet-to-be-determined standard of the next-generation HBM4. Official announcements reveal that Micron has disclosed its next-generation HBM memory, tentatively named HBM Next. It is expected that HBM Next will offer capacities of 36GB and 64GB, available in various configurations.

Unlike Samsung and SK Hynix, Micron does not intend to integrate HBM and logic chips into a single chip. In the development of the next-generation HBM, the Korean and American memory manufacturers have distinct strategies.

Micron may address AMD, Intel, and NVIDIA that faster memory access speeds can be achieved through combination chips like HBM-GPU. However, relying solely on a single chip means greater risk.

As per TrendForce, HBM4 is planned to be launched in 2026. It is expected that specifications and performance, including those for NVIDIA and other CSP (Cloud Service Providers) in future product applications, will be further optimized.

With specifications evolving towards higher speeds, it will be the first time that the base die of HBM, also known as the Logic die, will adopt a 12nm process wafer. This part will be provided by foundries, necessitating collaboration between foundries and memory manufacturers for single HBM product integration.

Furthermore, as customer demands for computational efficiency increase, HBM4 is expected to evolve beyond the existing 12hi (12-layer) stack to 16hi (16-layer) configurations. The anticipation of higher layer counts is also expected to drive demand for new stacking methods such as hybrid bonding. HBM4 12hi products are slated for release in 2026, while 16hi products are expected to debut in 2027.

Read more

• [News] SK Hynix Signs Prioritized Supply Agreement with NVIDIA for HBM3e, 2023 Q4 Revenue Expected to Surpass KRW 10 Trillion Again
• [News] H200 Unveiled: NVIDIA Integrates HBM3e for Enhanced AI Performance

(Photo credit: Samsung)

A glimmer of hope for the once-failed engagement between NAND flash memory giants Kioxia and Western Digital (WD) may emerge again. According to a report from Japanese media Asahi News, the two parties may restart merger negotiations in late April.

 It’s reported on February 23rd that Kioxia and WD are expected to resume merger talks in late April. Although their merger negotiations hit a snag last fall, both companies are facing pressure to expand their scale for survival. However, whether they can ultimately reach a merger agreement remains uncertain.

According to the report, both Kioxia and WD manufacture NAND Flash products. If they merge, their scale will rival that of the global market leader, Samsung Electronics. The Japanese government reportedly views the Kioxia/WD merger as a “symbol” of Japan-US semiconductor cooperation and has provided support. However, the merger negotiations hit an impasse last fall, reportedly due to opposition from SK Hynix, indirectly invested in Kioxia.

As per TrendForce’s  data for 3Q23, Samsung maintained its position as the top global NAND flash memory manufacturer, commanding a significant market share of 31.4%. Following closely, SK Group secured the second position with a 20.2% market share. Western Digital occupied the third position with a market share of 16.9%, while Japan’s Kioxia held a 14.5% market share.

Asahi News’ report further indicates that WD declared in October of last year that “all discussions had ended.” To avoid insider trading, as per the report cited sources, WD is expected to wait for a certain period before the negotiation can be resumed. Therefore, once this waiting period concludes, merger talks are set to resume in late April.

Per a report from Jiji Press on February 17th, regarding the merger proposal involving Kioxia and WD, Kioxia has proposed a collaboration with SK Hynix, which opposes the merger. Kioxia has reportedly approached SK Hynix and plans to utilize the jointly operated Japanese plants of Kioxia and WD to manufacture semiconductors for SK Hynix.

The report notes that SK Hynix and Kioxia are competitors in the NAND Flash industry. However, since 2018, SK Hynix has indirectly invested approximately 15% in the predecessor of Kioxia, “Toshiba Memory,” through the American investment fund Bain Capital. SK Hynix has consistently sought to strengthen its relationship with Kioxia since then.

Kioxia’s proposed acceptance of SK Hynix’s request to “strengthen the relationship” is seen as a gesture to persuade SK Hynix to agree to the merger proposal. The goal, as per the report, is to restart the stalled merger negotiations between Kioxia and WD.

Read more

• [News] Kioxia and Western Digital Resume Merger Negotiations? Rumors of Bain Negotiating with SK Hynix Surface

(Photo credit: Kioxia)

U.S. Commerce Secretary Gina Raimondo previously mentioned during an online Intel foundry event that the U.S. must continue investing to regain global leadership and requires “Chip Act 2.”

According to a report from TechNews citing from global media Tom’s Hardware, the U.S. Department of Commerce plans to announce additional subsidies for the semiconductor bill as soon as this week.

Raimondo is scheduled to attend the “Revitalizing American Innovation” conference hosted by the Center for Strategic and International Studies (CSIS) in Washington on February 26th and will unveil the latest subsidies under the “Chip Act.”

In this regard, Intel is expected to receive a government subsidy of USD 10 billion, while TSMC and Samsung may also be included in the latest subsidy list. Samsung Electronics is, according to its own expectation, investing USD 17 billion to construct a foundry in Taylor, Texas, while TSMC is investing roughly USD 40 billion to build a foundry in Phoenix, Arizona. However, it’s rumored that due to the U.S. prioritizing domestic companies, the expected subsidy amounts may differ from those of Intel.

The U.S. government enacted the “Chip Act” in 2022, but subsidies have been modest, with only three American companies currently benefiting, including BAE Systems, GlobalFoundries, and Microchip Technology.

Due to Intel’s investment of USD 43.5 billion in the United States since 2021, constructing new semiconductor plants, sources cited by the report believe that the likelihood of Intel receiving USD 10 billion (equivalent to 23% of the investment amount) is quite high.

Read more

• [News] GlobalFoundries Reportedly Becomes Third Recipient of CHIPS Act Subsidy, Receives USD 1.5 Billion
• [News] US Allocates USD 39 Billion Subsidy to Semiconductor Industry for Establishing Plants

(Photo credit: TSMC)

TSMC’s establishment of a plant in Kumamoto, Japan, with its opening ceremony scheduled for February 24th, has sparked attention regarding the economic growth benefits it brings.

According to TechNews cited Kumamoto Governor Ikuo Kabashima, TSMC’s investment is expected to bring economic benefits to Kumamoto, reaching JPY 6.85 trillion within 10 years. Governor Kabashima even claimed it as a “once in a century” opportunity for Kumamoto.

Firstly, the most noticeable aspect as per the report is the salary increase.

According to the hiring conditions set by TSMC, starting salaries are JPY 280,000 (roughly USD 1,858.65) for university graduates, JPY 320,000 (roughly USD 2124.18) for master’s degree holders, and JPY 360,000 (roughly USD 2389.70) for PhD holders. With an additional four-month bonus and performance dividends, the package even exceeds the conditions offered to fresh graduates by Japanese company SONY Semiconductor.

Additionally, the hourly wage for dispatched workers is as high as JPY 3,000 (roughly USD 19.91), which is more than three times higher than local companies, prompting other industries to follow suit in retaining employees.

Furthermore, the Kumamoto plant has been mostly completed by 2023, with part of the office building already in use, resulting in 400 employees commuting from Taiwan to work. At the same time, TSMC has announced plans to construct a second fab, with construction expected to commence by the end of the year and operations slated to begin by the end of 2027.

Since TSMC’s investment in Japan, it has also attracted at least 35 related supply chain companies to follow suit with investments, thereby altering the local financial ecosystem.

This is because they must provide loan financing and consultation services for employee housing, among others. Consequently, Japanese financial institutions have also begun to focus on Taiwanese companies, including Kumamoto Bank and banks with nationwide reach.

In addition, as per comprehensive reports from Japanese media, some Japanese citizens believe that the establishment of the TSMC plant has significantly changed the atmosphere of the city, making it more vibrant.

A 32-year-old interior decorator from Kumamoto Prefecture mentioned that there are so many new residential decoration projects that he cannot finish them all, and he spends his salary and tips from his supervisor on nightclub expenses or buying cars. One night, he spent JPY 150,000 just at a hotel.

Another bar owner also revealed that he once encountered a customer with tanned skin who spent JPY 300,000 in one night, speculating that he might be the owner of a construction company. Some customers are decked out in designer brands, and one spent JPY 1 million drinking each day for three consecutive days. Additionally, local supermarkets in Kumamoto have even set up a “Taiwanese Food Section.”

Kikuyo Town, Home to 43,000, May Face the Arrival of the ‘Black Ships’

While TSMC has spurred the economy in Kumamoto, some Japanese media have dubbed it the “Black Ship” and “Semiconductor Bubble.”

With skyrocketing land prices and unprecedented hourly wages, some Japanese business owners are forced to make the decision to close shops because the land has become too expensive, and they may not be able to afford the rent in the future.

As per a report from the Japan Times, Kikuyo Town, home to TSMC’s Kumamoto plant, was originally a town of 43,000 people, but residential land prices have surged by over 20% this year, marking the largest increase in over 30 years.

Apart from soaring hourly wages and housing prices, Kikuyo Town will soon face an influx of over 1,700 employees, putting pressure on the town’s roads and transportation systems. Additionally, the high water consumption of fabs raises concerns among locals about whether industrial water usage will affect domestic water supply.

While TSMC has undoubtedly contributed significantly to the local economy, the most profound impact is felt by long-term residents of the town. Nevertheless, it cannot be denied that TSMC has injected vitality into this aging town, making local life more vibrant and dynamic.

TrendForce has previously reported that Japan’s resurgence in the semiconductor arena is palpable, with the Ministry of Economy, Trade, and Industry fostering multi-faceted collaborations with the private sector. With a favorable exchange rate policy aiding factory construction and investments, the future looks bright for exports.

Read more

• [News] Multiple Fabs in Japan to Commence Production Post-2024 Boosting Industry
• [News] Semiconductor Equipment Sales in Japan Reach Nearly JPY 3.3 Trillion in 2023

(Photo credit: TSMC)