The European Commission initiated an investigation into Chinese electric cars in October last year, targeting BYD, SAIC Group and Geely, with plans to impose provisional tariffs on new electric cars imported from China. According to previous media reports, the plans were originally scheduled to be announced by June 5th. However, as per Reuters citing sources in a latest report, the new date for announcing the imposition of temporary tariffs has been set for June 10th, after the European Parliament election.

The sources cited in the report also mentioned that the delay was due to last-minute technical issues with the documents. As of now, the European Commission has not provided comments on this matter.

Yet, the same report further noted that the European Commission has formally warned the three Chinese electric car companies under anti-subsidy investigation that the data they provided for the investigation was insufficient.

According to trade data from 2023, for every additional 10% tariff imposed by the European Union on top of the existing 10%, Chinese electric car exporters would lose approximately $1 billion.

Reuters reported that past subsidy investigations launched by the European Union on other products imported from China resulted in additional tariffs ranging from approximately 9% to 26% for related companies, while the tariffs on the Chinese electric car companies may possbly fall between this range.

The report also indicated that China may be preparing alternative plans for future negotiations. If enough EU members oppose the temporary tariffs after four months, there might be challenges to the EU’s temporary tariffs, possibly leading to their cancellation.

According to an earlier analysis by Trendforce, with China’s subsidies gradually phasing out and the increasing market penetration of NEVs in the country, the growth rate of China’s NEV market is starting to slow. This, coupled with the growing demand for electric vehicles in overseas markets, is prompting numerous Chinese automotive brands to expand internationally. But they may have to counter various challenges, as countervailing duty investigation being one of them.

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• [News] Punitive Tariffs on Chinese EVs by US Reportedly to Further Hinder BYD, Leapmotor and Others’ Global Expansion Plan, while EU Investigation Persists
• [News] EU Reportedly to Counterdump Semiconductor and Electric Vehicles from China

(Photo credit: Pixabay)

According to a report from Liberty Times, Taiwanese foundry UMC stated yesterday that the company’s operations in the second quarter would see a slight increase compared to the first quarter, and the second half of the year would be better than the first half.

With UMC’s technology and processes, the company estimated that it can capture about 10-20% of the AI foundry market share, which is expected to drive future business growth.

• Edge Computing to Become Widespread in 4 Years

At UMC’s shareholder meeting yesterday, Co-General Manager Jason Wang stated that semiconductor applications are becoming increasingly diverse and important. The most promising growth areas include autonomous vehicles, AI servers, and AI PCs.

UMC sees significant growth potential in high-speed transmission and power management. In high-performance computing (HPC), UMC will focus on back-end integration, including interposers and advanced 3D IC packaging.

Jason Wang pointed out that AI is currently in early stages, and thus more focused on building the infrastructure for high-speed computing. However, once the infrastructure is complete, the market will gradually expand to the widespread adoption of edge computing, which he estimates will take about four years.

UMC plans to position itself early, developing technologies that align with customer applications. UMC is optimistic about the market prospects and has high expectations for the future, Wang noted.

UMC’s CFO Chitung Liu stated that while UMC does not have advanced processes for producing HPC chips in the AI field, it has made significant progress in edge computing and related process technologies. With UMC’s technology, processes, and capacity, it is estimated that the company can still capture a 10-20% share of the AI foundry market, which is considerable and will be a major driver of future operational growth.

UMC currently produces CoWoS advanced packaging-related silicon interposers at its Singapore plant, with monthly capacity doubling to 6,000 wafers this year. UMC will continue to invest according to market conditions, according to Liu.

• Effects of U.S.-China Trade War Order Transferring Take At Least Six Month to be Seen

Regarding the benefits of diversification amid the U.S.-China trade war, Liu mentioned that it takes time for customers to redesign and transition orders. It can take at least six to nine months in the short term for the effects to be seen, and up to one to two years in the long term for orders to be successfully transitioned.

Currently, there are no significant effects from diversification in the short term. However, UMC’s production is diversified across regions including Singapore, Japan, China, and Taiwan, with collaborations with Intel in Arizona, USA. Thus, UMC can meet customer needs regardless of where they choose to manufacture, Liu explained.

Liu reiterated the stance from last month’s briefing, stating that the situation in the first half of the year has improved from the economic downturn, and second-quarter revenue is expected to see a slight increase compared to the previous quarter. He hopes for better performance in the second half of the year.

In terms of application markets, the short-term performance of the automotive and industrial sectors appears weak, but growth is expected in the medium to long term. On the other hand, prospects for the communication and consumer sectors in the second half of the year are expected to be better than the first half.

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• [News] UMC’s Global and Local Orders Surge Amid U.S. Tariffs on China and Networking Market Recovery
• [News] UMC Ventures into US Production of 12nm Mature Chips through Collaboration with Intel

(Photo credit: UMC)

According to a report from Bloomberg, US officials have slowed down the issuance of licenses for chip manufacturers like NVIDIA and AMD to export large quantities of AI accelerators to the Middle East. Meanwhile, officials are conducting a national security assessment of AI developments in the region.

As per Bloomberg’s report citing sources, it is still unclear how long the assessment will take and what exactly constitutes a large-scale export. They said that officials are particularly concerned about large-scale sales because countries like the UAE and Saudi Arabia are looking to import significant quantities of chips for AI data centers.

AI accelerators can help data centers process the massive amounts of information required for developing AI chatbots and other tools. They have become essential equipment for companies and governments seeking to build AI infrastructure.

Reportedly, sources have revealed that slowing down exports is intended to give Washington time to formulate a comprehensive strategy on how advanced chips should be deployed overseas. Some of these sources mentioned that this includes negotiating who will manage and secure the facilities used to train AI models.

The US Department of Commerce stated in a statement that “protecting national security” is the top priority.

“With regards to the most cutting edge technologies, we conduct extensive due diligence through an interagency process, thoroughly reviewing license applications from applicants who intend to ship these advanced technologies around the world,” a representative for the department said. “As always, we remain committed to working with our partners in the Middle East and around the world to safeguard our technological ecosystem.”

Addressing national security concerns, earlier this month, the U.S. government has reportedly revoked the licenses of Intel and Qualcomm to supply semiconductor chips used in laptops and handsets to Huawei. According to Reuters citing sources, some companies received notices on May 7th, and the revocation of the licenses took immediate effect.

Read more

• [News] U.S. Imposes Further Sanctions, Revoking Intel and Qualcomm’s License to Supply Chips to Huawei
• [News] US Considers Sanctioning Huawei-Linked Chinese Chip Network, Huawei-Related Enterprises Blacklisted

(Photo credit: NVIDIA)

Recently, rumors surfaced that price drops in the silicon carbide (SiC) wafer market. So, what is the actual market situation for SiC wafer?

Currently, most companies in the supply chain agree on the fact that the price of SiC wafer is on the decline. For instance, Xu Xiulan, the chairwoman of GlobalWafers, publicly stated that the global release of 6-inch SiC wafer production capacity, coupled with a temporary slowdown in demand for electric vehicles, is putting downward pressure on SiC wafer prices in 2024. On May 9, 2024, SICC highlighted two internal reasons for the price drop in an investor relations report: technological advancements and scale effect, which brought down wafer costs.

Indeed, changes in technology and production capacity of SiC wafer have become increasingly evident since 2H23.

Technically, more than ten China-base companies have entered the sample delivery and small-batch production stages for 8-inch SiC wafer in addition to international ones, including SemiSiC, JSG, SICC, GZSC, Synlight Crystal, Tankeblue, KY Semiconductor, Hunan San’an Semiconductor, Hypersics, Taisic Materials, Heligenius, Cengol Semi,and GlobalWafers.

Regarding scale effect, while SiC wafer manufacturers’ early invested projects are now reaching the investment return phase, not a few wafer companies have been shifting their production focus to 8-inch wafer.

For example, JSG’s project for an annual production of 250,000 6-inch and 50,000 8-inch SiC wafers officially signed and started in November 2023; Cengol’s 8-inch SiC processing line got ready and went into small-batch production in February 2024; GZSC’s 8-inch SiC single crystal and wafer project was established in Jinan, Shandong, in June 2023, with full production expected by 2025; KY Semiconductor signed a strategic cooperation agreement with Russian company N in March 2024 to work on the “8-inch SiC Perfect Seed Crystal” project.

The decline in SiC wafer prices is an inevitable trend, towards which most companies hold a positive attitude. As CGEE stated, the expansion of market space and improvement in yield levels will unavoidably cause price adjustments during the competition, which will place stress on related companies in the short term.

However, for the entire supply chain, the advantages from the improvement in yield and decrease in prices outbalance disadvantages. That means cost reduction will invigorate more downstream applications, and thereby enable the industry to maintain a sound growth rate as a whole.

As a part of SiC wafer market, SICC also pointed out that currently, the price of SiC wafer is much higher than that of Si wafer. As such, the decrease in SiC wafer prices will help expand downstream applications and promote the penetration and adoption of SiC technology and materials, fostering overall growth.

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• [News] Continuous Breakthroughs in SiC Substrates, Global 8-Inch Fab to Reach 11

(Photo credit: JSG)

According to a report from Wall Street Journal, Alphabet CFO Ruth Porat announced in a statement on May 30 that Google has committed to investing USD 2 billion in Malaysia. The investment includes building its first data center, expanding Google Cloud, and further developing artificial intelligence (AI).

Porat highlighted that this will be Google’s largest investment project in Malaysia. Google estimates that this investment will contribute over USD 3.2 billion to Malaysia’s GDP and create 26,500 jobs by 2030.

As per a report from Bloomberg, Google stated that in addition to developing cloud computing services, it will also support AI literacy programs for students and educators.

In its earnings call in April, Porat mentioned that the significant year-over-year increase in capital expenditures over recent quarters reflects Alphabet’s confidence in the potential of AI. She projected that the quarterly capital expenditures for the second to fourth quarters of this year would be comparable to or slightly higher than those in the first quarter.

On May 2, Microsoft Corp. announced that it will invest USD 2.2 billion in Malaysia over the next four years to support the country’s digital transformation. The investment projects include developing digital infrastructure, creating AI skill opportunities, establishing a National AI Excellence Center, and enhancing Malaysia’s cybersecurity capabilities.

Earlier this week, Malaysian Prime Minister Anwar Ibrahim announced the National Semiconductor Strategy, which includes providing at least USD 5.3 billion in financial support and training 60,000 semiconductor engineers, aiming to make Malaysia a global chip hub.

Amidst the U.S.-China rivalry and other geopolitical tensions, global companies are seeking to diversify their supply chains. Facing competition between the U.S. and China, Malaysia is reportedly keen to maintain a neutral position in the semiconductor supply chain landscape. According to the Malaysian Investment Development Authority (MIDA), the country currently provides 13% of global testing and packaging.

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• [News] Malaysia’s Major Investment Aims to Establish Global Chip Hub
• [News] Overseas Expansion of Testing and Packaging Facilities – Japan, Malaysia, and Singapore Emerge as Top Choices

(Photo credit: Google)