As reported earlier, the global provider of outsourced semiconductor packaging and test services, Amkor, has been set to establish its presence in Arizona, USA, providing advanced packaging services for Apple chips manufactured by TSMC.

According to reports from South Korean media, the alliance formed among Apple, TSMC, and Amkor may pose a significant challenge to the South Korean semiconductor giant, Samsung Electronics, potentially creating competition for contracts and drawing close attention from the industry.

Amkor released a statement on November 30, announcing the establishment of the new facility in Peoria, northwest of Phoenix, Arizona. The construction is expected to commence in the second half of 2024, focusing primarily on advanced packaging requirements for high-end chips related to IoT, automotive electronics, 5G, artificial intelligence (AI), and high-performance computing (HPC). The facility has already secured orders from major players, with Apple being its first and largest customer.

Coincidentally, TSMC is also in the process of constructing an advanced process semiconductor wafer facility in Phoenix. 

TrendForce’s research has indicated that the current maximum capacity plan for TSMC’s Arizona plant is around 50,000, with 20-30,000 allocated for 4nm and 3nm each. It is anticipated that the expansion to this scale will only occur after 2027. This capacity is expected to cater to a limited number of domestic customers in the United States who require fully American-made semiconductor products.

Business Korea’s report also suggests that the alliance formed among Apple, TSMC, and Amkor may impact Samsung. Samsung’s second wafer facility in the U.S., located in Taylor City, Texas, is anticipated to start production in the second half of 2024, setting the stage for potential chip procurement battles with TSMC.

Speculations have arisen about Samsung possibly establishing a testing and packaging facility in Taylor City, following the strategy of strengthening vertical integration to enhance competitiveness and gain an advantage in chip procurement.

In November of this year, Samsung unveiled a new strategy called “GDP,” focusing on Gate-All-Around (GAA) transistor technology, DRAM, and 3.5D advanced packaging. The company has pledged to achieve a goal where more than half of its wafer foundry revenue comes from AI chip orders within five years.

(Photo credit: TSMC)

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• [News] Apple Expands Amkor Partnership at Arizona Fab with Amkor’s $2B Investment in Advanced Packaging

SiC industry giant Wolfspeed issued a press release on December 4th, formally selling its radio frequency business (Wolfspeed RF).

Back to August 22nd of this year, Wolfspeed had announced the sale of Wolfspeed RF to the U.S. semiconductor company MACOM Technology Solutions Holdings, Inc.

Under the transaction terms, Wolfspeed received approximately USD 75 million in cash, subject to a customary purchase price adjustment, and 711,528 shares of MACOM common stock, which shares had a market value of approximately USD 60.8 million based on the closing price for MACOM’s common stock on December 1st, 2023 as reported on the Nasdaq Global Select Market.

MACOM specializes in designing and producing high-performance semiconductor products. Their product range spans radio frequency, microwave, analog and mixed-signal, and optical semiconductor technologies, catering to industries such as telecommunications, industrial applications, defense, and data centers. Headquartered in Lowell, Massachusetts, USA, MACOM’s business footprint extends across the United States, Europe, Asia, and beyond. With the successful completion of this business acquisition, the company’s impact in the radio frequency domain is poised to experience notable reinforcement.

President of CEO of Wolfspeed Gregg Lowe said, “The completed sale of Wolfspeed RF is the final step in our transformation, and we’re happy to say Wolfspeed is now the only pure-play silicon carbide semiconductor manufacturer in the industry. As demand continues to accelerate across the automotive, industrial and renewable energy markets, we can now focus on innovation and capacity for our materials and power device businesses.”

TrendForce reveals a future landscape for the SiC power device market, projected to reach USD 5.33 billion by 2026, driven by robust demand in downstream applications, particularly in electric vehicles and renewable energy. Despite this positive outlook, the SiC industry faces constraints due to supply issues in SiC substrates.

Wolfspeed’s recent decision to divest its radio frequency business further underscores the company’s commitment to maintaining a leading role in the SiC substrate market, where it currently stands as the sole producer capable of mass-producing 8-inch SiC substrates.

Current situation of the SiC substrate industry         

Considering the SiC substrate industry dominated by few players, Wolfspeed stands out as a notable example. More and more companies are opting to enhance their production capacity for high-quality SiC substrates used in automotive main inverters.

The SiC substrate industry is actively addressing challenges of low demands and high cost, making various companies to expand from 6-inch to 8-inch SiC substrates. While Wolfspeed is ahead in the production of 8-inch SiC substrates, other industry leaders are also making notable progress:

• Rohm has established an 8-inch SiC wafer fab in Japan, scheduled to commence 8-inch substrate production next year.
• Coherent’s SiC subsidiary secured a substantial USD 1 billion investment from Japan’s Denso and Mitsubishi Electric to produce 6/8-inch substrates.
• STMicroelectronics and Sanan Optoelectronics are collaborating on an 8-inch SiC wafer fab in Chongqing, with gradual production expected to start from 2025. Concurrently, Sanan will establish an 8-inch SiC substrate fab.

Moreover, several Chinese companies, including SEMISiC, Jingsheng, Summit Crystal, Synlight, KY Semiconductor, and IV-SemiteC, are actively advancing the development of 8-inch SiC substrates, contributing to the overall progress in the SiC substrate industry.

Wolfspeed’s Optimism Amid Industry Upgrades

In the face of industry upgrades and competitive pressures, Wolfspeed’s leadership remains optimistic. Looking into its result in second quarter of fiscal 2024, Wolfspeed targets revenue from continuing operations in a range of USD 192 million to USD 222 million. GAAP net loss from continuing operations is targeted at USD 131 million to USD 153 million. Non-GAAP net loss from continuing operations is targeted to be in a range of USD 71 million to USD 88 million. Based on the result, Wolfspeed aim to meet 20% utilization goal at the Mohawk Valley Fab in next quarter. The company predicts the revenue of the fab will rise from USD 4 million to USD 10~15 million. The third quarter revenue will grow significantly as well.

Being the only front runner in the global market solely dedicated to SiC business, Wolfspeed can channel all its focus and resources into SiC materials and power device operations. As Wolfspeed enhances the capacity of its fabs, there is potential for a further increase in its market share for SiC materials and power devices. In response to this evolving landscape, other companies are likely to expedite the research and production of 8-inch SiC substrates, aiming to enhance their market presence and actively contribute to the overall advancement of the SiC industry chain.
(Image: Wolfspeed, MACOM)

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Compared to last week, there is no notable change in DRAM spot price. It is relatively stable in this week. On NAND Flash, there was a 20%+ growth in NAND Flash wafer contract prices last month, making buyers stock and sellers negotiate the price. It leads a surge in the NAND flash wafer spot price in this week.

DRAM Spot Market

The spot market has not changed noticeably from the previous week, and prices are starting to weaken as more used DDR4 chips are released into the market. Kingston has yet to adjust its module prices, so other module houses are hesitant to raise their prices as well. On the whole, the spot market remains fairly quiet in terms of trading activities, and the general price trend there is relatively flat. The average spot price of the mainstream chips (i.e., DDR4 1Gx8 2666MT/s) rose by 0.99% from US$1.712 last week to US$1.729 this week.

NAND Flash Spot Market

Overall retail sales of NAND Flash have yet to surpass performance of past years, though the growth of more than 20% in contract prices for Flash wafers during November that stimulated aggressive stocking activities among buyers had led to a more adamant approach in sellers’ negotiations, and had prompted 512Gb to surpass US$3 on a continual basis. 512Gb TLC wafer spots have risen by 5.35% this week, arriving at US$3.015.

In an announcement on December 5th, Taiwan’s National Science and Technology Council(NSTC) has designated 22 technologies, such as IC manufacturing and heterogeneous integration packaging, as national core key technologies. This inaugural list prioritizes technologies with leading advantages and immediate protection requirements.

NSTC, in collaboration with relevant ministries, plans to conduct a comprehensive review three months later, anticipating a second wave of additions or adjustments, as per reported by UDN News.

NSTC emphasized that the theft of classified national core key technologies through economic espionage will prompt legal investigations with enhanced penalties. Moreover, individuals receiving government subsidies exceeding half in national key technology businesses must obtain permission for travel to China.

Highlighting the significance of the semiconductor industry, especially considering Taiwan’s global market share and interconnected supply chain, the listed technologies include IC manufacturing for 14nm process and advanced processes beyond, encompassing critical gases, chemicals, and equipment. Heterogeneous integration packaging technologies, such as wafer and silicon photonics integration packaging, along with their essential materials and equipment, are also covered. Additionally, the list features chip security, post-quantum cryptography protection, and proactive network defense technologies, reflecting their relevance to information security.

NSTC highlighted the ongoing thoroughness of the list to safeguard industries. In this regard, it plans to collaborate with relevant ministries, keeping pace with technological advancements and the industrial development trajectories of nations like the United States and South Korea.

According to CNA’s report, the council will actively seek input from industry, government, academia, and research communities. A second wave of the list is expected to be presented after a comprehensive review three months later.

According to South Korean media Chosun Biz’s report, the prices of all memory products, encompassing servers, mobile devices, and PCs, are on the rise. This trend, combined with the thriving development of the AI market, is expected to result in even higher profitability for High-Bandwidth Memory (HBM) than initially anticipated.

Major memory manufacturers Samsung and SK Hynix are beginning to emerge from a business downturn, leading to upward revisions in their financial outlook for the fourth quarter of 2023.

The report notes that the adjustments in Q4 financial outlook by Samsung and SK Hynix indicate a rapid increase in demand for HBM due to the thriving AI market. Additionally, the recovery of the largest sales item, DRAM, is contributing to better operational performance for both companies in the fourth quarter.

Market experts reveal that Samsung’s projected operating profit for Q4 is expected to be KRW 3.487 trillion, showing slight growth compared to the estimate from a week ago. As for SK Hynix, the expected loss in Q4 is KRW 294.4 billion, reflecting a convergence from the market estimate of KRW 335.3 billion a week earlier, despite remaining in a deficit.

In addition, Micron, the American company considered one of the three major global DRAM manufacturers along with South Korean companies Samsung and SK Hynix, has also revised its financial forecast for the first quarter of the 2024 fiscal year.

The initial estimate in November of USD 4.4 billion has been adjusted to USD 4.7 billion , while the expected Earnings per Share has been raised from USD -1.07 to USD -1.

Regarding trends in the memory industry, TrendForce indicated in a recent report that a key turning point in the third quarter for the NAND Flash market was Samsung’s decision to actively reduce production.

Previously, buyers maintained a low inventory and slow procurement strategy due to concerns about low visibility of end demand and worries about a lackluster market peak season. With the leading supply-side companies significantly reducing production, buyers, anticipating a significant reduction in supply, have shifted to a more positive procurement attitude. By the end of the third quarter, contract pricing for NAND Flash had shifted toward stabilization and even price increases.

TrendForce predicts that NAND Flash products will experience both increased volume and prices in the fourth quarter. The average selling price for all products is estimated to increase by 13%, and the overall revenue growth for the NAND Flash industry in the quarter is expected to exceed 20%.

Contrarily, in the case of DRAM, prices have been on a downward trend since 2023, but they started to rise from October. TrendForce believes that the three major global DRAM manufacturers have begun intensive production cuts, and as market demand begins to recover, the pricing power of memory manufacturers is gradually increasing.

In terms of DRAM supply in the fourth quarter, memory manufacturers have a clear upward pricing attitude, as TrendForce projects a noticeable increase of approximately 13-18% in contract prices during this period. However, the recovery in demand is not as strong as in previous peak seasons.

Overall, while there is demand for stocking up, in the current scenario, the server sector remains passive in terms of procurement due to high inventory levels. The shipment growth in the DRAM industry for the fourth quarter is expected to be limited.

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• [News] Beyond Price Hikes, What Lies Ahead for the Memory Market?
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(Photo credit: Samsung)