On July 31, IQE plc, the global supplier of compound semiconductor wafer products and advanced material solutions, announced the planned initial public offering (IPO) of the Group’s Taiwanese operating subsidiary (IQE Taiwan) on the Taiwan Stock Exchange (TWSE).

The Group intends to list IQE Taiwan on the TWSE and to sell a minority shareholding through a public offering, but it plans to retain control of IQE Taiwan and will continue to leverage its strategic value, with the proceeds of the public offering intended to be utilized across the Group to fund the growth strategy.

Currently, the IPO process is at an early stage, and IQE has engaged Taishin Securities Co. Ltd as its financial advisor to assist in preparing IQE Taiwan for the IPO. IQE explained that the IPO will be proceeded in two stages.

For the initial phase, IQE Taiwan is expected to be listed on the Emerging Market Board in 1H25, subject to usual regulatory procedures and requirements. Further transaction details and information regarding the process will be disclosed as appropriate.

As IQE is capitalizing on the market opportunities ahead, including in GaN Power, the company considers the listing of its Taiwan subsidiary as an exciting opportunity for the entire group, which will accelerate IQE’s investment in its strategy for growth.

Once the subsidiary is successfully listed, IQE is expected to maximize asset value and ensure supply reliability and flexibility for its global customers.

It’s worth noting that aside from IQE, GaN IDM Innoscience is promoting its IPO process on the Hong Kong Stock Exchange while TASC has spun off its subsidiary responsible for 8-inch GaN business and promoted its listing on TWSE, which all reflect the fact that GaN power semiconductor technologies are gaining traction, particularly with the development of AI server and low-altitude economy sectors.

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(Photo credit: IQE)

Japanese NAND flash giant Kioxia announced today (August 1st) that the building construction of Fab2 (K2) of its Kitakami Plant in Iwate Prefecture was completed in July. As demand is recovering, the company will gradually make capital investments while closely monitoring flash memory market trends. Kioxia plans to start operation at K2 in the fall of Calendar Year 2025, according to its press release.

A portion of investment for K2 will be subsidized by the Japanese government according to the plan approved in February 2024, according to Kioxia.

In addition, the company notes that some administration and engineering departments will move into a new administration building located adjacent to K2 beginning in November 2024 to oversee the operation of K2.

According to a report from Nikkei on July 31, Kioxia’s Kitakami Plant started production in 2020,with the construction of K2 began in 2022. Initially, K2 was scheduled to commence production in 2023.

However, due to a downturn in the memory market and weak demand for NAND Flash used in smartphones and PCs, Kioxia started to reduce production in October 2022, with the extent of production cuts exceeding 30%. As part of these production reduction measures, Kioxia postponed the production start of the K2 facility.

Nikkei’s report further indicates that with market conditions recovering, Kioxia ended its production cuts in June 2024, and the current production line utilization rate has returned to 100%.

To mass-produce advanced memory products, Kioxia, in collaboration with Western Digital (WD), plans to invest a total of 729 billion yen in the Yokkaichi and Kitakami plants, with the Japanese government providing up to 243 billion yen in subsidies.

The Kitakami plant will produce the most advanced “8th generation” memory, with a monthly production capacity of 25,000 wafers. These will be used in AI data centers, as well as in smartphones, PCs, and automotive applications.

On June 26, according to industry sources cited in a report from Reuters, Kioxia plans to submit an initial public offering (IPO) application to the Tokyo Stock Exchange in the near future, aiming to go public by the end of October. Sources indicate that Kioxia will submit its official IPO application by the end of August, with a target listing date at the end of October.

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(Photo credit: Kioxia)

According to a report from Commercial Times, IC design giant MediaTek is making its move into the AI accelerator sector. MediaTek CEO Rick Tsai emphasized that MediaTek aims to be the best partner for edge AI, focusing on advanced technologies and 3nm process to optimize the power consumption and efficiency of its SoCs (system-on-chips).

Tsai mentioned that MediaTek will unveil its Dimensity 9400 flagship series of chips in October, designed to perfectly support most large language models on the market. He expressed confidence in achieving a more than 50% year-over-year revenue increase for flagship devices.

For the ASIC (Application-Specific Integrated Circuit) market, MediaTek has confirmed its entry into the AI accelerator field and will integrate CPUs as needed. ASICs are expected to start the revenue contribution  in the second half of next year.

Additionally, the TAM (Total Addressable Market) for generative AI is still in its early stages. MediaTek focuses on providing leading interconnect capabilities, such as SerDes IP and Ethernet PHY.

Regarding AI technology in the smartphone sector, Rick Tsai believes that flagship smartphones are seeing an increase in ASP, and there is a gradual shift towards high-end smartphones in the Chinese market. He noted that Chinese brands are actively developing AI, particularly in model development, such as open-source models like LLaMA 3.

At MediaTek’s earnings call on July 31st, Rick Tsai noted that the company anticipates a return to normal seasonal patterns in the second half of the year. The outlook for the fourth quarter will largely depend on consumer product demand.

Regarding the outlook in the third quarter, MediaTek expects the revenue to be flattish, ranging from NTD 123.5 billion to NTD 132.4 billion, compared with NTD 127.27 billion last quarter. Gross margin is projected to slide to 45.5-48.5%, from 48.8%, down 3.6 percentage points quarter over quarter and up 1.3 percentage points year-over-year.

Aside from the boost expected from the Dimensity 9400 flagship release, the company’s fourth-quarter market demand is projected to be relatively moderate, which is why the annual outlook remains unchanged. MediaTek expects its full-year gross margin to be between 46% and 48%.

Regarding TSMC’s pricing adjustments, Rick Tsai remains unperturbed, noting that all industry peers face similar cost pressures. MediaTek aims to reflect cost increases through pricing, with a gross margin target of 47% for new products. Progress has also been made in 3nm and 2nm processes, and MediaTek has secured its capacity needs for 2025 with TSMC.

Moreover, MediaTek and NVIDIA are collaborating on automotive chips, with plans to launch their first chip in early 2025. Rick Tsai mentioned that details are yet to be disclosed, but significant advancements in the automotive sector are expected between 2027 and 2028.

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(Photo credit: MediaTek)

Samsung Electronics, which has been surround by concerns that its HBM3e products are still struggling to pass NVIDIA’s qualifications, has confirmed in its second quarter earnings call that the company’s fifth-generation 8-layer HBM3e is currently undergoing customer valuation, and is scheduled to enter mass production in the third quarter, according to a report by Business Korea.

TrendForce notes that Samsung’s recent progress on HBM3e qualification seems to be solid, and we can soon expect both 8hi and 12hi to be qualified in the near future. The company is eager to gain higher HBM market share from SK hynix so its 1alpha capacity has reserved for HBM3e. TrendForce believes that Samsung is going to be a very important supplier on HBM category.

Driven by the momentum, the report from Business Korea, citing an official speaking at the conference call on July 31^st, states that the share of HBM3e chips within Samsung’s HBMs is anticipated to surpass the mid-10 percent range in the third quarter. Moreover, it is projected to speedily grow to 60% by the fourth quarter.

According to Samsung, its HBM sales in the second quarter already grew by around 50% from the previous quarter. Being ambitious about its HBM3 and HBM3e sales, Samsung projects its HBM sales will increase three to five times in the second half of 2024, driven by a steep rise of about two times each quarter.

Samsung has already taken a big leap on HBM as its HBM3 chips are said to have been cleared by NVIDIA last week. According to a previous report by Reuters, Samsung’s HBM3 will initially be used exclusively in the AI giant’s H20, which is tailored for the Chinese market.

On the other hand, the South Korean memory giant notes that it has completed the preparations for volume production of its 12-layer HBM3e chips. The company plans to expand the supply in the second half of 2024 to meet the schedules requested by multiple customers, according to Business Korea. The progress of its sixth-generation HBM4 is also on track, scheduled to begin shipping in the second half of 2025, Business Korea notes.

Samsung Electronics reported higher-than-expected financial results in the second quarter, with a six-fold year-on-year increase in net income, soaring from KRW 1.55 trillion won (USD 1.12 billion) to KRW 9.64 trillion (USD 6.96 billion), as demand for its advanced memory chips that are crucial for AI training remained strong.

SK hynix, as the current HBM market leader, has expressed its optimism in securing the throne as well. The company reportedly expects its HBM3e shipments to surpass those of HBM3 in the third quarter, with HBM3e accounting for more than half of the total HBM shipments in 2024. In addition, it expects to begin supplying 12-layer HBM3e products to customers in the fourth quarter.

Micron, on the other hand, has reportedly started mass production of 8-layer HBM3e as early as in February. The company reportedly plans to complete preparations for mass production of 12-layer HBM3e in the second half and supply it to major customers like NVIDIA in 2025.

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(Photo credit: Samsung)

According to a report from Bloomberg, the US is reportedly considering new measures and could unilaterally impose restrictions on China as early as late August. These measures would limit China’s access to AI memory and related equipment capable of producing them.

Moreover, another report from Reuters further indicates that US allies, including semiconductor equipment manufacturers from Japan, the Netherlands, and South Korea—such as major Dutch semiconductor equipment maker ASML and Tokyo Electron—will not be affected in their shipments. The report also notes that countries whose exports will be impacted include Israel, Taiwan, Singapore, and Malaysia. 

Bloomberg, citing sources, revealed that the purpose of these measures is to prevent major memory manufacturers like Micron, SK hynix, and Samsung Electronics from selling high-bandwidth memory (HBM) to China.

These three companies dominate the global HBM market. Reportedly, regarding this matter, Micron declined to comment, while Samsung and SK hynix did not immediately respond to requests for comment. 

Bloomberg’s source also emphasized that the US has yet made a final decision. The source also state that if implemented, the new measures would cover chips such as HBM2, HBM3, and HBM3e, as well as the equipment needed to manufacture these chips.

The source further revealed that Micron will essentially not be affected by the new regulations, as Micron stopped exporting HBM to China after China banned Micron’s memory from being used in critical infrastructure in 2023.

Reportedly, it is still unclear what methods the US will use to restrict South Korean companies. One possibility is the Foreign Direct Product Rule (FDPR). Under this rule, if a foreign-made product uses any US technology, even just a small amount, the US can impose restrictions.

Both SK hynix and Samsung are said to be relying on chip design software and equipment from US companies such as Cadence Design Systems and Applied Materials.

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• [News] U.S. Reportedly Enhancing Chip Export Restrictions to China, while NVIDIA’s H20 Might Get Banned
  
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(Photo credit: SK hynix)