Automotive chip market, previously enjoying robust growth among the semiconductor sector, is now showing signs of slowing down.

According to a report from WeChat account DRAMeXchange, the major foundry UMC announced that it expects customer inventories in the communications, consumer electronics, and computer sectors to return to seasonal levels as usual in the second half of this year, and to reach healthy levels by the end of the year.

However, demand in the automotive end market remains weak, which may extend the period of inventory adjustment, with healthy levels anticipated only by the first quarter of next year.

Another foundry giant, TSMC, warned in its latest financial statement that the automotive market might decline this year in spite of a quarter-on-quarter increase of 5% in the revenue of its automotive electronics end market in 2Q24.

Meanwhile, the sluggish growth trend in the automotive chip market is also exemplified by the business performance of three leading automotive chip companies—Texas Instruments, STMicroelectronics, and NXP as they all saw declines in revenues.

Texas Instruments’ revenue for 2Q24 was USD 3.82 billion, down 16% YoY and the sales of its industrial and automotive business continue to decrease.

STMicroelectronics delivered revenue of USD 3.23 billion, down 25.3% YoY, with automotive business revenue falling short of expectation, offsetting growth in personal electronics sales.

NXP’s achieved revenue of USD 3.13 billion, down 5.2% YoY and its automotive business generated revenue of USD 1.728 billion, down 7.4% YoY, indicating the decline widened compared to the first quarter.

Despite the strong growth in the automotive chip market in 2023, the industry believes that as the overall automotive end market fails to advance as expected and there is an overcapacity in some automotive chip markets, automotive chip market growth will slow down in 2024, with the growth rate dropping to single digits in the coming years.

It’s learned that automotive semiconductor can be broadly categorized into microcontroller (MCU), computing chip (CPU, GPU, NPU, etc.), sensing chip (radar, image sensor, photoelectric sensor, etc.), memory chip (DRAM, NAND Flash, etc.), communication chip (CAN bus chip, connectivity chip, etc.), and power chip (IGBT, silicon carbide, etc.), among others.

In the view of the industry, current MCU and other chips are facing significant inventory pressure due to the declining automotive end market demand. However, power chip and autonomous driving chip continue to see strong demand driven by the wave of automotive electrification and intelligence.

Therefore, while the automotive semiconductor market may slow down in the short term, the automotive chip market still possesses growth potential in the long run with the continuous adoption of silicon carbide and autonomous driving chips in the increasingly popular EV and smart vehicle markets.

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(Photo credit: Pixabay)

According to a report from Tom’s Hardware citing industry sources, it’s indicated that Chinese memory giant ChangXin Memory Technologies (CXMT) has started mass production of HBM2. If confirmed, this is approximately two years ahead of the expected timeline, although the yield rate for HBM2 is still uncertain.

Earlier, Nikkei once reported that CXMT had begun procuring equipment necessary for HBM production, estimating it would take one to two years to achieve mass production. Currently, CXMT has ordered equipment from suppliers in the U.S. and Japan, with American companies Applied Materials and Lam Research having received export licenses.

Reportedly, HBM2 has a per-pin data transfer rate of approximately 2 GT/s to 3.2 GT/s. Producing HBM2 does not require the latest lithography techniques but does demand enough manufacturing capacity.

The process involves using through-silicon vias (TSV) to vertically connect memory components, which is rather complex. However, packaging the HBM KGSD (known good stack die) modules is still less intricate than manufacturing traditional DRAM devices using a 10nm process.

CXMT’s DRAM technology is said to be lagging behind that of Micron, Samsung, and SK hynix. These three companies have already started mass production of HBM3 and HBM3e and are preparing to advance to HBM4 in the coming years.

There also are reports indicating that Huawei, the Chinese tech giant subject to US sanctions, looks to collaborate with other local companies to produce HBM2 by 2026. Per a previous report from The Information, a group led by Huawei aimed at producing HBM includes Fujian Jinhua Integrated Circuit.

Moreover, since Huawei’s Ascend 910 series processors use HBM2, it has made HBM2 a crucial technology for advanced AI and HPC processors in China. Therefore, local manufacturing of HBM2 is a significant milestone for the country.

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(Photo credit: CXMT)

According to a report from The Information, NVIDIA’s “world’s most powerful AI chip,” the GB200, is said to be experiencing yield issues, leading to a one-quarter delay in mass shipments.

As per sources cited by a report from the Economic Daily News, it’s suggested that the problem likely lies in the yield rates of advanced packaging, mainly affecting the non-reference-designed GB200 chips.

The supply of the reference-designed GB200 chips remains stable, with Foxconn being the sole contract manufacturer receiving an adequate supply of these chips. Foxconn is set to ship according to the original schedule in the fourth quarter.

Furthermore, the sources cited by the same report point out that Foxconn is currently the only manufacturer able to meet the scheduled shipment of the GB200 in the fourth quarter. This is primarily due to Foxconn securing NVIDIA’s reference-designed GB200 chips orders, which are prioritized for shipment amid the supply shortage.

The term “reference-designed” refers to the GB200 AI servers ordered by NVIDIA for production at Foxconn and other manufacturers. These products are made according to NVIDIA’s reference designs and are not customized. Once produced, they can be sold to cloud service providers (CSPs) and other clients.

In contrast, “non-reference-designed” refers to customized versions of the GB200, which are tailored to specific customer requirements. The current yield issues are affecting the production of these non-reference-designed items, with the priority given to shipping the reference-designed products first.

Following the reports addressing the tight supply of GB200, customers are said to be scrambling to secure their orders from Foxconn due to its ample chip supply. Foxconn, traditionally silent on customer and order details, will reveal the latest status of its product lines during the press conference on August 14th.

The GB200 was originally scheduled for mass shipments starting in the fourth quarter of this year. However, over the weekend, reports emerged about yield issues, pushing the mass shipment timeline to the first quarter of next year, causing a stir among the market.

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(Photo credit: NVIDIA)

As the demand for AI GPUs increases, TSMC’s advanced packaging capacity for CoWoS is struggling to keep up. Recently, according to a report from Commercial Times, NVIDIA has reportedly turned to Intel for advanced packaging solutions.

According to industry sources cited by the same report, TSMC’s CoWoS-S and Intel’s Foveros packaging technologies are similar, allowing clients to turn to Intel and secures the capacity needed quickly.

Despite its current struggling on transformation, Intel has been gradually developing its ‘s foundry services. In addition to clients like Qualcomm and Microsoft, Intel’s advanced packaging has also attracted interest from companies like Cisco and AWS.

Under the IDM 2.0 strategy, Intel has opened up its wafer outsourcing and foundry services to customers, establishing an the independent IFS foundry service. Earlier this year, Intel secured a major USD 15 billon foundry order from Microsoft for the first system-level AI foundry service, which is expected to use the Intel 18A process.

The report from Commercial Times further suggested that Microsoft’s move is anticipated to reduce its heavy reliance on TSMC. The report also indicates that chip customers, including NVIDIA, have engaged with Intel. Intel’s flexible foundry strategy, which can provide advanced packaging, software, and chiplet services tailored to customer needs, has been well-received by chipmakers.

Sources cited by the same report reveal that the U.S. has begun allocating specialized funds to increase investments in the advanced packaging sector as well. This move could highlight the importance of advanced packaging as the next key area for global competition in production capacity.

In November last year, the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST) released a report titled “National Advanced Packaging Manufacturing Program,” highlighting that advanced packaging technology is one of the key technologies in semiconductor manufacturing.

Additionally, the U.S. Department of Commerce plans to invest approximately USD 3 billion to advance the National Advanced Packaging Manufacturing Program. Intel, alongside Amkor, is another giant in local advanced packaging in the U.S.

The main focus of advanced packaging is on interconnect density, power efficiency, and scaling. From Foveros to hybrid bonding technology, Intel is gradually scaling down bumping pitch sizes, which allows for higher current loads and better thermal performance.

Furthermore, in May last year, Intel’s advanced packaging technology roadmap outlined plans to transition from traditional substrates to more advanced glass substrates.

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(Photo credit: Intel)

Amid the heating tech war between the U.S. and China, and the stringent sanctions imposed to prevent China from obtaining cutting-edge chips, it appears that China is still able to find its way out. According to a report by Tom’s Hardware, citing the New York Times, the latest tactic of China would be setting up new companies to trade advanced hardware and operating them until they are shut down.

Before that, it is understood that Chinese firms have been smuggling NVIDIA chips through some underground networks, which involve buyers, sellers and dispatchers, according to a previous report by the Wall Street Journals.

Now the country seems to find another option in order to evade the sanctions. According to the New York Times and Tom’s Hardware, buyers that include state-owned or affiliated companies, even sanctioned companies, are reportedly collaborating with the Chinese defense industry, as transactions ranging from a few hundreds of GPUs to a deal worth USD 103 million have been observed lately.

The new tactic, it is reported, would be to establish new companies to acquire advanced chips before facing U.S. sanctions. For instance, after Sugon, established under the strong promotion of the Chinese Academy of Sciences and focuses on fields like computing, storage, security and data center, was banned from obtaining NVIDIA chips due to its ties with the Chinese military, some former executives created a new company named Nettrix.

The reports further note that within six months, Nettrix became one of the largest Chinese manufacturers of AI servers, as tech giants including NVIDIA, Intel, and Microsoft have already begun doing business with it, all without violating any American laws. Given the company’s recent establishment, the U.S. likely hasn’t had the opportunity to thoroughly vet its background.

The reports suggest that the White House might significantly reduce Chinese backdoors in trade by ensuring that only licensed, white-listed buyers can legally procure these chips. However, many in the industry oppose increasingly stringent bans, arguing that they harm American companies more than they help.

Before the upcoming U.S. presidential election in November, the Biden authority is said to be considering a series of actions targeting semiconductors. The latest one includes new measures that might unilaterally impose restrictions on China as early as late August, preventing major memory manufacturers like Micron, SK hynix, and Samsung Electronics from selling high-bandwidth memory (HBM) to China.

• [News] US Reportedly Weighs Stricter Limits on AI Memory Access for China
• [News] China Reportedly Acquires Nvidia AI Chips Indirectly; Nvidia, Gigabyte Emphasize Compliance with U.S. Regulations

(Photo credit: Nettrix)