According to icsmart’s report, in October, Samsung Electronics and SK Hynix received an indefinite exemption from the U.S. government’s control over exports to China, allowing them to import semiconductor manufacturing equipment without special permission for their facilities. Samsung has initiated efforts to boost capacity at its Xi’an plant.

Reportedly, Samsung Electronics‘s 12-inch NAND flash M-FAB fab has officially entered the main construction phase.

Established in Xi’an in 2012, it is Samsung’s sole overseas memory production base and has evolved into the world’s largest NAND Flash manufacturing facility. The fab produces over 265,000 12-inch wafers per month, contributing to over 40% of Samsung’s total NAND Flash flash production.

According to publicly available data, the initial investment for the first phase of Samsung’s Xi’an fab in China was USD 10.87 billion, and it commenced production in May 2014, primarily manufacturing 3D NAND flash memory chips.

On August 30, 2017, Samsung Semiconductor announced a USD 7 billion investment to build the second phase of the 12-inch NAND flash project, establishing a new NAND flash production line. In December 2019, the company decided to further invest USD 8 billion to expand the scale of the second-phase project.

Business Korea reports that Samsung executives have decided to upgrade the Xi’an NAND Flash fab to a 236-layer stacking process and significantly expand production. Industry sources indicate that Samsung has initiated the procurement of semiconductor equipment, with deliveries scheduled for the end of the year.

In 2024, the company plans to introduce eighth-generation NAND Flash equipment in succession. This move is seen by the industry as a strategy to counter the soft demand in the global NAND Flash market.

(Photo credit: Samsung)

According to ChinaTimes’s report, following Taiwan’s implementation of strict control on 22 core key technologies, several Taiwanese lawmakers are urging the country’s Ministry of Economic Affairs to also consider “mild control” for the export of mature semiconductor process equipment and industry talents from Taiwan to China. Furthermore, the Ministry of Economic Affairs emphasized its success in attracting semiconductor giants like AMD and NVIDIA.

Taiwan’s Minister of Economic Affairs, Wang Mei-hua, stated on the December11th that discussions across government departments would be necessary to include mature semiconductor processes and industry talents in the category of “mild export controls.”

The Ministry of Economic Affairs aims to present its view on this matter within three months. She emphasized the importance of ensuring Taiwan’s continued role in critical international supply chains.

Other officials under the ministry added that they are aware of China’s significant efforts to develop mature processes. They plan to conduct an analysis of the expansion of mature processes in China, and any regulatory responses will be based on the results of this analysis.

The officials noted that China aims for competitiveness in terms of price and quantity but emphasized that Taiwan has advantages in certain special semiconductor manufacturing processes. They expressed caution about Chinese IC design firms potentially impacting the lower-end market by placing orders with their compatriot foundries.

The Ministry of Economic Affairs highlighted its success in attracting major AI chip manufacturers, such as AMD and NVIDIA, to establish logistics and operational centers in Taiwan over the past two years.

NVIDIA has chosen to establish its hub warehouse logistics center within the Farglory  Free Trade Zone. NVIDIA’s product applications span both consumer and industrial sectors, with a future focus on investments in 5G, AI, autonomous vehicles, cloud computing, advanced applications, and data centers.

The establishment of a logistics center in Taiwan is expected to further increase the share of OSAT orders in Taiwan, driving development in Taiwan’s advanced IC packaging technology. Additionally, AMD initiated an assessment in 2022 for investing in a “mega” logistics center in Asia.

The Taiwanese Ministry of Economic Affairs held multiple meetings to facilitate communication between the company and the Ministry of Finance, explaining the project’s economic benefits to Taiwan. Finally, with successful coordination, AMD smoothly proceeded with the establishment of its logistics center in Taiwan.

AMD anticipates significant revenue growth from the logistics center, aligning with the demand for high-end AI server orders from the fourth quarter of this year to the next.

(Photo credit: NVIDIA)

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• [News] Taiwan Lists 22 Critical Technologies to Face Strict Controls, Included 14nm Processes and Beyond

Nvidia CEO Jensen Huang announced on the 11th the company’s intention to deepen collaboration with high-tech companies in Vietnam, with a focus on fostering local expertise in AI and digital infrastructure development. Huang revealed plans to establish a chip center in Vietnam, as reported by Reuters.

According to documents released by the White House in September to enhance bilateral relations, Nvidia has invested USD 250 million in Vietnam. The company has strategically aligned with leading tech companies to implement AI technology in cloud computing, automotive, and healthcare industries.

This marks Huang’s first visit to Vietnam, where, during an event in Hanoi, he emphasized, “Vietnam is already our partner as we have millions of clients here.” He stated, “Vietnam and Nvidia will deepen our relations, with Viettel, FPT, Vingroup, VNG being the partners Nvidia looks to expand partnership with,” Huang said, adding Nvidia would support Vietnam’s artificial training and infrastructure.

Vietnam’s Minister of Planning and Investment, Chi Dung Nguyen, highlighted during the meeting on December 11th the country’s ongoing efforts to design mechanisms and incentives to attract investments in semiconductor and AI projects.

During his meeting with Vietnamese Prime Minister Pham Minh Chinh on the 10th, Huang shared the vision of establishing an R&D center, emphasizing that “the base will be for attracting talent from around the world to contribute to the development of Vietnam’s semiconductor ecosystem and digitalization.” Subsequently, on the 11th, Nguyen Chi Dung extended an invitation for Nvidia to consider establishing an R&D base in the country.

On the 11th, Nvidia engaged in discussions with the Vietnamese government and local tech companies regarding semiconductor cooperation agreements. According to insiders, Nvidia may potentially reach a technology transfer agreement with at least one Vietnamese company.

Given the strained trade relations between China and the U.S., Vietnam’s technology and manufacturing sectors are presented with a significant opportunity. The government actively seeks to enhance chip design capabilities and explore avenues for establishing a viable chip manufacturing industry.

Vietnam already serves as a pivotal IC packaging hub for global chip manufacturers. For instance, Intel boasts that it has world’s largest IC packaging and testing facility, is situated in Vietnam. Despite temporary delays in the expansion of its Vietnamese factory due to power supply and bureaucratic challenges, Intel affirmed in a Reuters interview, “Vietnam will continue to be a critical part of our global manufacturing operations as demand for semiconductors grows.”

Furthermore, several chipmakers have recently set up or expanded production facilities in Vietnam. Major OSAT provider Amkor commenced operations at its new USD 1.6 billion IC packaging plant in Yen Phong 2C Industrial Park, Bac Ninh Province, Vietnam, in October this year. A month earlier, Samsung’s OSAT partner, Hana Micron, announced the inauguration of its USD 600 million IC packaging plant in Bac Giang Province.

(Image: Nvidia)

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• [News] Amkor’s Vietnam Plant Meets High-End Semiconductor Demand as Advanced Packaging Thrives

Both TSMC and Samsung plan to start production on the 2nm process in 2025, triggering an early battle for related orders. According to sources reported by the Financial Times (FT), Qualcomm intends to shift production of its next-generation high-end mobile chips from TSMC to Samsung’s 2nm process. Samsung, offering substantial discounts, is aggressively pursuing orders from major players like NVIDIA, posing a challenge to TSMC’s dominance.

According to reports citing insider information, TSMC has showcased its 2nm prototype test results to major clients like Apple and NVIDIA. Additionally, sources indicate that Samsung is not only planning to introduce its 2nm prototype but is also offering discounted prices, attracting interest from prominent clients, including NVIDIA.

The report highlights that Qualcomm is planning to use Samsung’s “SF2” (2nm) process for the next generation of high-end smartphone chips. Samsung, as the first company to globally mass-produce 3nm (SF3) chips last year, is also the pioneer in adopting the new Gate-All-Around (GAA) transistor architecture.

Samsung indicated that, “We have fully deployed and can mass-produce SF2 in 2025. Since we are the first company to enter and transform the GAA architecture, we hope that the progress from SF3 to SF2 will be relatively smooth.”

However, insiders have disclosed that Samsung’s yield for the most basic 3nm chips is only 60%, significantly below customer expectations. Moreover, when producing chips with complexity equivalent to Apple’s A17 Pro or NVIDIA graphics processing units (GPUs), the yield may further decrease.

Global giants such as Qualcomm and NVIDIA follow a diversified wafer foundry strategy, but they still rely heavily on TSMC for now. Previously, NVIDIA’s Chief Financial Officer, Colette Kress, hinted during the UBS Global Technology Conference that NVIDIA may consider Intel for the production of its next-generation chips, potentially breaking away from the exclusive partnership with TSMC for AI chips.

Now, Qualcomm is also exploring collaboration with Samsung for the 2nm process, intensifying the pressure on TSMC to address potential order losses from two major clients in advanced semiconductor manufacturing.

TSMC, on the other hand, informed the Financial Times that the development progress of its 2nm process is proceeding smoothly, and it is scheduled for production in 2025. When launched, it will represent the industry’s most advanced semiconductor technology in terms of density and energy efficiency.

In a previous investor conference, TSMC stated that there is significant customer interest and engagement in 2nm for high-speed computing and smartphone applications. It is expected that 2nm, when introduced in 2025, will be the most advanced semiconductor technology in the industry, comparable or even superior to 3nm at the same stage.

TSMC plans to launch the 2nm backside power rail solution in the second half of 2025, with mass production scheduled for 2026.

Besides TSMC and Samsung actively advancing towards 2nm and more advanced processes, Intel has also joined the competition. The Financial Times characterizes this race for the 2nm process as “shaping the future of a USD 500 billion industry.”

Intel is progressing along its previously set 5 process nodes in a four-year trajectory. The Intel 4 process is ready for mass production, and the Intel 3 process is planned for launch later this year. Intel CEO, Pat Gelsinger, has previously showcased the Intel 20A wafer, which is expected to enter the pre-production phase in the first half of next year. The Intel 18A process is scheduled for mass production in the second half of 2024.

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• [News] Intense Competition in Advancing Processes at the 2nm by Samsung, Intel, and TSMC

(Photo credit: Samsung)

According to TechNews’ report, in the midst of production cutbacks by Samsung, SK Hynix, and Micron, NAND Flash wafer prices are surging.

As the traditional peak season for end-user stockpiling comes to an end, memory module manufacturers wish to position themselves favorably during a dip in demand. However, the reduced supply resulting from production cutbacks paradoxically elevates the demand for NAND Flash, intensifying the momentum of price rebounds. Memory module manufacturers are left with no choice but to accept the price increases imposed by memory manufacturers.

Fueled by the expectation that memory manufacturers will continue to raise prices, memory module manufacturers continue aggressive purchasing, contributing to an upward price trend in December.

Major memory manufacturers Samsung, SK Hynix, and Micron had previously announced significant production reduction plans. Samsung initiated a decrease in NAND Flash production from the second quarter and further expanded the reduction to 50% of total capacity in September, focusing mainly on products with less than 128 layers. This move instilled confidence in price hikes among industry peers.

Due to the unexpectedly substantial reduction in production by major memory manufacturers, coupled with generally low inventory levels on the client side, NAND Flash prices continue to rise.

In the latter half of this year, the demand for Mobile DRAM and NAND Flash (eMMC, UFS) has not only been driven by the traditional peak season but also stimulated by the production expansion goals of other Chinese smartphone brands, including the Huawei Mate 60 series. This sudden influx of demand is contributing to the price hikes in fourth-quarter contracts.

The most significant price surge in this wave is undoubtedly in NAND Flash wafer prices. According to the latest research from TrendForce, the current industry situation indicates that module manufacturers’ inventories have rapidly depleted due to increased orders from customers. This has prompted module manufacturers to turn to memory manufacturers, requesting expanded supply.

However, with memory manufacturers persisting in their production reduction strategies, the imbalance between supply and demand has led to a robust rebound in NAND Flash wafer prices in the fourth quarter. According to TrendForce’s data, the month of November alone witnessed a price increase of over 25% for NAND Flash wafers.

Industry sources reveal that in the current scenario of limited supply and significantly increased demand, module manufacturers have no choice but to accept the forceful price hikes imposed by memory manufacturers. The industry, anticipating that memory manufacturers will continue to raise prices, has resulted in a situation where “Everyone just keeps scrambling for inventory.”

Based on the current market conditions, TrendForce believes that in December, with tight supply, NAND Flash prices will continue to rise. However, whether prices will continue to surge significantly in the first quarter next year depends on the production reduction strategies of NAND manufacturers and the state of demand.

It is reported that there are industry rumors suggesting that some memory manufacturers are considering increasing production capacity due to the strong downstream demand. If memory manufacturers decide to increase its capacity earlier, coupled with unclear improvements in demand, the extent of price increases may be noticeably limited.

(Photo credit: Samsung)