Micron, the American memory giant, is gearing up to initiate the production of state-of-the-art “1γ” DRAM at its Hiroshima fab in Japan, starting in 2025. Concurrently, there are plans to manufacture High-Bandwidth Memory (HBM) at the same fab, tailored for the rising demand for generative AI applications.

According to a report from Nikkei Asia on December 13th, Joshua Lee, VP at Micron Memory Japan, made this announcement during the event SEMICON Japan 2023. Lee highlighted that the Hiroshima fab is slated to manufacture DRAM with the most advanced “1γ” process by 2025. He also pointed out that Micron is also going to be the first semiconductor company to introduce Extreme Ultraviolet (EUV) lithography equipment to Japan.

In addition to this, Lee shared insights into Micron’s intentions to produce HBM at the Hiroshima fab, which is widely applied for generative AI applications. He stated that Japan’s strong semiconductor ecosystem will be a key driving force behind Micron’s progress. Furthermore, he emphasized that collaboration is pivotal for Japan to establish itself as a global leader in the semiconductor supply chain.

Earlier In October, the Ministry of Economy, Trade, and Industry (METI) of Japan announced a substantial subsidy of JPY 192 billion for Micron’s Hiroshima fab. Micron has recently declared a comprehensive investment plan of JPY 500 billion in Japan over the next few years, encompassing the Hiroshima fab.

Micron has been actively developing its DRAM manufacturing operations in Japan and Taiwan. Donghui Lu, Corporate VP of Micron Taiwan, revealed in a September interview with the UDN News that approximately 65% of Micron’s DRAM output originates from Taiwan. Regarding the migration to the 1β process, mass production began at Micron Japan last year, and Micron Taiwan has also commenced mass production this year. As for the more advanced 1γ process, production is expected to take place in both Taiwan and Japan by 2025.

TrendForce’s analysis has also revealed that Micron is leveraging its 1β nm technology to produce HBM3e in a bid to gain a competitive edge over Korean suppliers. Its front-end manufacturing is strategically positioned in Japan, aligning with expansion plans for 1β nm capacity.

Additionally, Micron has established a backend factory in Taiwan to meet surging HBM demands driven by the AI era. TrendForce anticipates that HBM products will substantially boost the revenue of DRAM suppliers in 2024.

(Image: Micron)

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Due to escalating raw material and labor expenses, The Elec reported that Dongwoo Fine-Chemistry, a subsidiary of Japan’s Sumitomo Chemical, plans to increase the prices of KrF and L-line photoresists for South Korean semiconductor companies. Price increases vary depending on the type of offering, ranging from around 10% to 20%.

As a pivotal material in semiconductor manufacturing, photoresist leverages photochemical reactions and undergoes processes like exposure and development through photolithography. This facilitates the transfer of intricate patterns from the reticle to the processing substrate. The KrF photoresist highlighted in this report represents a high-end variant, marking a significant competitive market for future players.

The photoresist market has been dominated by several major manufacturers such as Tokyo Ohka Kogyo, DuPont, JSR, Shin-Etsu Chemical, Sumitomo Chemical, and Dongjin Semichem. This market concentration is particularly pronounced in the market segment for semiconductor photoresist.

The photoresist industry demands high specialization, involving intricate formulations of resins, photosensitive acids, and additives—guarded as trade secrets by each company. The substantial technological barrier, coupled with the necessity for purity and performance from laboratory trials to market production, makes the entire product development process time-consuming and intricate. Additionally, meeting customer requirements and adaptation of the production line requires 1 to 3 years of validation, making it challenging for the customers to shift from current photoresist companies.

Faced with technological and customer-centric challenges, photoresist companies wield substantial negotiating power. The recent uptick in photoresist prices has prompted a noteworthy response from the South Korean semiconductor industry.

Insiders from the foundries commented, “In the face of rising photoresist prices, foundries have little choice but to pass on some of the costs to customers (fabless companies).” They further noted, “The price increase in Dongwoo Fine-Chemistry’s photoresist may contribute to a decline in the profitability of foundries and the fabless industry.”

(Image: Dongwoo Fine-Chemistry)

SEMICON Japan, commenced on the 13th, with key participants including Rapidus, tasked with revitalizing advanced semiconductor manufacturing in Japan, major equipment manufacturers Advantest, Japanese material giants Kyocera, Sekisui Chemical, and the Semiconductor Equipment Association of Japan (SEAJ).

The event featured grand exhibits and keynote speeches from top executives of Intel, Applied Materials, and Sony, drawing global participation from semiconductor industry stakeholders.

This year, SEMICON Japan centered its theme around “Accelerate the Future. Shape the Next Era,” conveying the vision of advancing society into a new stage with semiconductors that boast higher performance, lower costs, and increased production volumes, contributing to sustainable development.

Also, spurred by the development of generative AI, many exhibitors this year showcased AI, high-speed computing, and high-performance technologies, highlighting a range of technology for artificial intelligence applications and 3D chip packaging.

Advantest, for instance, exhibited its latest equipment developed for the testing of AI and HPC chips, while Rapidus, currently engaged in the development of 2-nanometer technology, presented developments in small chips and other advanced technologies to event attendees.

Despite challenges such as a surge in semiconductor inventory and sluggish end demand causing the industry’s downward cycle this year, Ajit Manocha, President and CEO of SEMI, states that the semiconductor market is cyclical, foreseeing a turning point toward recovery in 2024 and anticipating increased demand for production capacity, new fab constructions, and advanced technologies and solutions in 2025. With this growth, a robust recovery is expected.

On another front, the Japanese government is steadfast in revitalizing the semiconductor industry, making the Japanese market a global focal point. This commitment has once again drawn exhibitors and participants from around the world to SEMICON Japan this year, with organizers expecting attendance to surpass last year, reaching 70,000 participants.

South Korean President Yoon Suk Yeol concluded his visit to the Netherlands, announcing the establishment of a “Semiconductor Alliance” between South Korea and the Netherlands. The alliance involves collaboration between Dutch semiconductor equipment giant ASML and South Korean companies Samsung and SK Hynix. This marks South Korea’s first alliance announcement with a specific country.

According to the Korea Times and South Korean President Office’s press release on December 13th, President Yoon Suk Yeol’s held a dialogue with Dutch Prime Minister Mark Rutte during the state visit to the Netherlands. They issued a joint statement formalizing the “Semiconductor Alliance” and establishing bilateral mechanisms for economic, security, and industrial consultations.

On December 12th, President Yoon Suk Yeol led a delegation to ASML’s headquarters in the Netherlands, including representatives from South Korean semiconductor giants Samsung and SK Hynix, as reported by the Korea Times. During the visit, Samsung and ASML signed an MOU, jointly investing approximately KRW 1 trillion (about USD 7.6 billion) to establish a research fab in South Korea.

Bloomberg also reports that the new fab will expand ASML’s market in South Korea, where it already operates four fabs, servicing clients including Samsung. ASML’s exclusive EUV technology is crucial amid the US-China tech trade tensions, making regional diversification increasingly important for the company.

ASML is a leading global player of semiconductor EUV lithography systems, which is crucial for processing semiconductor manufacturing’s most vital steps. EUV equipment are a pivotal part of chip manufacturing, and ASML can produce only around 60 EUV devices annually. Currently, 70% of ASML’s EUV equipment are purchased by market leader TSMC.

Previous reports from South Korean media highlighted Samsung’s substantial EUV equipment purchases from ASML, totaling 50 units. Samsung is the world’s first company to produce 3nm chips, commencing production of the first-generation 3nm chips in the latter half of 2022. It aims to start mass production of the second-generation 3nm chips in the first half of the next year and targets producing 2nm chips by 2025 and 1.4nm chips by 2027.

(Image: 대한민국 대통령실)

Rumors suggest TSMC will set up a new fab that deploys 2nm and more advances processes in the Central Taiwan Science Park (CTSP) Phase 2, Taichung City, Taiwan. The city mayor Shiow-Yen Lu has confirmed TSMC’s entry into Phase 2, designating all allocated land exclusively for TSMC 2nd Fab in CTSP. According to the local government, the new fab is expected to house “processes advances than 2nm,” expressing the hope that TSMC will bring its latest technology to Taichung City.

The latest news about TSMC’s new plant has emerged. CNA reported that during the regular session of the Taichung City Council on December 12th, the mayor responded to councilors regarding the progress of Taichung’s efforts to attract TSMC’s new plant. Mayor stated that the city government has secured the deal, confirming that TSMC will establish itself in the CTSP Phase 2.

Mayor Lu explained that due to the immense scale of TSMC’s Taichung 2nd Fab, the Ministry of Economic Affairs in Taiwan is assisting as well. While CTSP Phase 1 accommodates numerous companies, almost all the land in Phase 2 is allocated for TSMC’s Taichung 2nd Fab.

In response, TSMC expressed gratitude for the support from the Taichung city government and pledged to continue cooperating with the relevant procedures. Regarding whether Phase 2 of CTSP will adopt technology for 2nm and more advances process, TSMC did not provide further clarification.

TSMC has also responded to earlier reports about Samsung offering discounts so as to be more effective in competing with TSMC for 2nm orders. During a joint interview before the Taiwan Executive Yuan’s Science & Technology Meeting on December 13th, TSMC Chairman Mark Liu stated that TSMC’s customers prioritize technological quality. As for the outlook for the coming year, Liu expressed hope for a very healthy year.

▲ TSMC’s Current Layout of Global Production Capacity
Edited by TrendForce, November, 2023

(Image: TSMC)

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