As TSMC’s earnings call approaches on April 18th, according to a source cited in a report from Commercial Times, it has predicted a downturn in the smartphone industry as it enters a slow season. However, TSMC is reportedly benefiting from AI demand, bolstering its operations through HPC (High-Performance Computing). Additionally, the increasing revenue share from the 3nm process is expected to contribute positively to performance in the second quarter.

TSMC has issued updates for three consecutive days, indicating that the overall recovery rate of its fabs has exceeded 80%. They reiterated their annual performance outlook from January’s earnings call, forecasting revenue growth in the low-to-mid twenties percentage range for the full year. Notably, in the fourth quarter of last year, the revenue share from high-performance computing matched that of smartphones, both reaching 43%, serving as dual engines for operational growth.

The same report, citing sources, indicates that TSMC’s advanced process technology and yield rates lead the industry, making it the primary foundry choice for most global customers.

Based on overall market share, TrendForce’s latest report reveals that in 2023, global foundry revenues hit US$117.47 billion, with TSMC capturing a dominant 60% share. This figure is expected to climb to around $131.65 billion in 2024, increasing TSMC’s share to 62%. It is also estimated in the report from Commercial Times that TSMC holds a market share of approximately 70-80% in 5nm technology, and this is expected to exceed 90% for 3nm, covering nearly all major players in the market.

TSMC has also emphasized that besides traditional smartphone applications, High-Performance Computing (HPC) is becoming an increasingly important application for their advanced processes. This means that even during the second quarter when demand for smartphone chips is typically lower, it will be supported by HPC demand.

The current major AI accelerators such as NVIDIA’s A100 and H100 GPUs, AMD’s Instinct MI250 and MI300, are all manufactured utilizing TSMC’s 7nm or 5nm nodes, highlighting TSMC’s critical position in the AI industry. Reportedly, as demand for AI-based Generative AI (AIGC) continues to rise, TSMC’s production volume is also expected to increase accordingly.

According to the same report citing sources, TSMC’s utilization rate for its 3nm production remains high and unaffected despite the impact of the recent earthquake on its facilities. TSMC has emphasized that key machines used for advanced processes, including all Extreme Ultraviolet (EUV), were undamaged.

However, in areas where the shaking was more severe, certain production lines are expected to require longer adjustments and calibration to restore automated production. TSMC is conducting a comprehensive review of the impact of this earthquake while maintaining close communication with its customers.

Furthermore, TSMC’s biggest challenge at the moment is how to catch up with customer expansion demands.

The most lacking capacity currently is in CoWoS production. Although TSMC maintains its stance of doubling capacity compared to 2023, market estimates cited in the report indicate that TSMC’s capacity is expected to increase from around 13,000 wafers to 30,000-35,000 wafers. This aligns with what founder Morris Chang described—AI chip demand in the future will no longer be in the tens or hundreds of thousands of wafers but will require the capacity of 3, 5, or even 10 fabs.

Read more

• [News] TSMC’s Latest Statement Indicates Equipment Largely Recovered, Revenue Forecast Unchanged
• [News] Taiwan Hit by 7.2 Magnitude Earthquake: TSMC and Other Semiconductor, Panel Supply Chain Updates

(Photo credit: TSMC)

According to a report from South Korean media outlet TheElec, Samsung’s Advanced Package (AVP) team has reportedly secured an advanced packaging order for NVIDIA’s AI chip, paving the way for future supply of NVIDIA’s high-bandwidth memory (HBM) chips.

The report, citing sources, reveals that Samsung Electronics’ Advanced Packaging team will provide interposer and 2.5D packaging technology for packaging NVIDIA’s AI processors. However, the HBM and GPU chips used in these NVIDIA AI processors will be supplied by others.

2.5D packaging technology enables the horizontal integration of chips like CPUs, GPUs, and HBMs on an interposer. Processors such as NVIDIA’s A100, H100, and Intel’s Gaudi all utilize this technology for packaging.

TSMC’s CoWoS advanced packaging facility utilizes 2.5D packaging technology, while Samsung Electronics employs their iCube technology, which also falls under the category of 2.5D packaging.

Over the past year, Samsung Electronics has been expanding its advanced packaging division by increasing personnel and developing its own interposer technology. They have also procured a large amount of 2.5D packaging equipment from Japanese semiconductor equipment suppliers such as Shinkawa and others.

The same report from TheElec also revealed that in the future, stacking eight HBM chips on a 12-inch wafer will require the use of 16 interposers. Therefore, Samsung Electronics is actively working to increase its silicon interposer production capacity.

Although Samsung Electronics has declined to comment on the rumors regarding NVIDIA’s packaging orders, industry speculation suggests a connection to insufficient capacity at TSMC’s CoWoS, compounded by recent earthquakes in Taiwan potentially further impacting TSMC’s CoWoS capacity. This has led to expectations of future growth in orders for Samsung Electronics’ Advanced Packaging Division.

Samsung Electronics’ plant located in Cheonan, South Korea, is where the company’s Advanced Packaging team is based. Recently, the production capacity at the Cheonan plant has reportedly been ramped up to full utilization, which is believed by industry observers to be one of the possible reasons why Samsung secured NVIDIA’s advanced packaging orders.

Previously reported by The Korea Times, Samsung Co-CEO Kye-Hyun Kyung stated that he expects the results of Samsung’s investment to come out in earnest from the second half of this year.

Kyung further noted that for a future generation of HBM chips called HBM4, likely to be released in 2025 with more customised designs, Samsung will take advantage of having memory chips, chip contract manufacturing and chip design businesses under one roof to satisfy customer needs.

TrendForce’s latest report reveals that in 2023, global foundry revenues hit US$117.47 billion, with TSMC accounting for close to 60% of the market share, while Samsung held approximately 11%.

Read more

• [News] Samsung Reportedly Commits to Advanced Packaging, Targets Over USD100 Million in Related Revenue This Year
• [News] Samsung Accelerates 3D Packaging with Hybrid Bonding Production Line in Korean Advanced Packaging Hub

(Photo credit: Samsung)

According to TechNews, TSMC announced its latest updates on the evening of the 5th, stating that equipment within its Taiwan wafer fabs has largely recovered. The company’s full-year performance outlook, denominated in USD, is expected to remain consistent with the forecast provided during the January earnings call. Annual revenue is projected to grow in the low-to-mid twenties percentage range.

TSMC noted its robust experience and capabilities in earthquake response and disaster prevention, regularly conducting safety drills to ensure preparedness. Within just 10 hours of the earthquake on April 3rd, equipment recovery rates in the wafer fabs exceeded 70%, with newly constructed fabs like Fab 18 surpassing 80% recovery.

As of the 5th, except for certain production lines in areas with greater seismic impact requiring longer adjustment and calibration times to restore automated production, thanks to the concerted efforts of TSMC colleagues and supplier partners, equipment within Taiwan’s wafer fabs has largely recovered.

TSMC emphasized its comprehensive assessment of the earthquake’s impact and continues to maintain close communication with customers, providing timely updates on relevant impacts.

(Photo credit: TSMC)

Taiwan experienced a magnitude 7.2 earthquake on the 3rd, prompting round-the-clock repair efforts during the holiday by semiconductor fabs, aiming to restore equipment operations. According to reports from TechNews, the latest progress of various fabs and science parks across different locations is as follows.

TSMC

TSMC stated that the maximum intensity of the earthquake on the 3rd in science parks such as Hsinchu, Longtan, and Zhunan was magnitude 5, while in Central Taiwan and Southern Taiwan science parks, it was magnitude 4. The recovery rate of semiconductor fab equipment has exceeded 80%, with newly built fabs (such as Fab 18 responsible for producing 3 and 5 nanometers wafers) expected to fully recover by the evening of the 4th..

While some equipment in certain areas suffered damage, affecting production lines, major equipment including all EUV machines remained undamaged. In areas with higher seismic intensity, longer time is expected for adjusting and calibrating to restore automated production.

It is believed that this may refer to the advanced packaging stronghold in Longtan, where production process equipment needs reconfiguration due to earthquake evacuation, unstable or disrupted network signals requiring parameter reset, as well as seismic impacts on cleanroom spaces, damaged pipelines, and machinery relocation, all requiring extensive scheduling for repair.

UMC

A spokesperson for UMC indicated that the impact of the strong quake on 12-inch Fab in Southern Taiwan was relatively light, while 8-inch Fab in Hsinchu was more severely affected. The company’s machinery and pipelines remained undamaged, with only instances of machinery displacement, some quartz tube damage, sprinkler head damage, and partial office ceiling damage.

According to market sources cited in the same report, UMC is actively reallocating manpower to reposition machinery in 8-inch Fab, cleaning damaged wafers, and replacing quartz tubes, expecting a recovery time of two to three days, or even a week.

VIS

VIS stated that as of noon on the 4th, about 80% of affected machinery had returned to normal, and production operations would gradually resume. The company promptly informed affected customers upon the earthquake’s occurrence, maintaining close communication and providing detailed information individually.

Hsinchu Science Park Administration

Most major factories including semiconductor and panel manufacturing plants completed equipment recovery from the quake on the 3rd. Although there was some impact on production lines, effective measures were taken by factories such as seismic design for buildings and machinery, personnel evacuation, and preventive machinery shutdowns, resulting in minimal impact on factory operations.

Currently, factories are operating normally, with a few undergoing machine calibration for full recovery in the short term. Manufacturers’ machinery is gradually returning to operation, personnel have resumed their positions, and major wafer manufacturing plants have sufficient materials and are smoothly recovering operations.

Central Taiwan Science Park Administration

In parts of the Central Taiwan Science Park, which mainly focuses on optoelectronics, semiconductors, and precision machinery industries, manufacturers have gradually resumed operations after machinery shutdowns. Among them, over 90% of high-precision machinery in semiconductor fabs have resumed operation, with only some machines undergoing calibration, all expected to complete and operate normally by the end of the 4th.

Southern Taiwan Science Park Administration

As of noon on the 4th, major factories including TSMC, UMC, Innolux and Corning Taiwan in the area have all resumed normal operations. Continuous monitoring of aftershocks and manufacturer dynamics will be maintained, with necessary assistance provided as needed.

(Photo credit: TSMC)

On the morning of the 3rd April, a Richter scale 7.2 earthquake occurred, shaking the entire Taiwan. Semiconductor wafer foundries were also disrupted, and relevant manufacturers have carried out emergency evacuations according to SOP.

According to Money DJ, in response to the earthquake impact, TSMC is currently confirming detailed situations, while UMC has reported partial shutdowns of equipment and is making efforts to resume operations. As for PSMC, related evaluation is underway. The industry believes that the impact on the operations of related companies should be limited.

TSMC stated that, to ensure personnel safety, relevant preventive measures have been initiated according to internal company procedures. Some personnel in certain factory areas have been evacuated, and all personnel are currently safe and gradually returning to their workstations. Detailed situations are yet to be confirmed. Preliminary inspections of factory construction sites have shown normal conditions. For safety considerations, the company has decided to suspend work at construction sites across Taiwan today, and will resume after inspection.

The industry indicates that wafer fab buildings have quite high seismic resistance coefficients, capable of withstanding earthquakes of magnitude 7. However, typically occurring earthquakes of magnitude 3 to 4 may trigger machinery to activate defense mechanisms and auto shutdown. Whether normal operations will be resumed directly after restart, or if other damages occur, will require detailed inspections. Additionally, issues like wafers produced on the production line are partially damaged and ruptured quartz tubes and pipelines will require at least 1 to 2 days for further checking.

(Photo credit: CWA)