Fueled by the rising demand for generative AI, global semiconductor testing equipment giant Advantest has revised upward its fiscal projections for the year spanning from April 2023 to March 2024. Advantest witnessed a significant surge in sales in the last quarter (October-December 2023), particularly in the Taiwan market.

In a press release issued on January 31, Advantest attributed the revision to the increasing demand for testing equipment driven by the surge in generative AI requirements. Consequently, the company raised its consolidated revenue target for the fiscal year from the initial forecast of JPY 470 billion to JPY 480 billion (a year-on-year decrease of 14.3%).

Similarly, the consolidated operating income target was adjusted upward from JPY 80 billion to JPY 85 billion (a year-on-year decrease of 49.3%), and the consolidated net income target was raised from JPY 60 billion to JPY 64.5 billion (a year-on-year decrease of 50.5%).

Advantest also released its financial results for the last quarter (October-December 2023) net sales decreased by 3.4% year-on-year to JPY 133.2 billion, consolidated operating income decreased significantly by 34.9% to JPY 26.8 billion, and consolidated net income decreased by 26.0% to JPY 21.2 billion.

Advantest noted that the demand for testing equipment for high-performance DRAM, such as HBM used in the generative AI sector, is on the rise. Therefore, the company has raised its sales forecast for memory testing equipment for the current fiscal year by JPY 5 billion to JPY 81 billion.

“In order to fulfill all the demand increase in the market we need to make further efforts,” stated by Advantest CEO Yoshiaki Yoshida stated during the financial results briefing held on January 31st.

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(Photo credit: Advantest’s Facebook)

US officials have announced that the Pentagon has added over a dozen Chinese companies to a list established by the US Department of Defense. This list identifies entities accused of collaborating with the Chinese military.

According to the Pentagon’s website, the Department of Defense updated the list of “Chinese military companies” operating directly or indirectly in the United States, in accordance with Section 1260H of the National Defense Authorization Act (NDAA) for the fiscal year 2021.

As per a report from Reuters, the newly added companies to the list include Chinese memory manufacturer Yangtze Memory Technologies Corp (YMTC), artificial intelligence (AI) firm MEGVII, radar manufacturer Hesai Technology, and technology company NetPosa.

Reportedly, being listed on this roster doesn’t automatically impose bans, but it poses significant reputational risks for the designated companies and issues stern warnings to US entities, cautioning them about the risks associated with conducting business with these enterprises.

The list could also amplify pressure from the US Treasury Department to sanction these companies.

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(Photo credit: iStock)

The competition for dominance in 2nm semiconductor technology has intensified at the beginning of 2024, marking a crucial battleground among global foundry companies.

As per a report from IJIWEI, major foundry enterprises such as Samsung Electronics, TSMC, and Intel are set to commence mass production adopting 2nm process starting this year. Consequently, the fierce competition for supremacy in 2nm technology is expected to escalate from 2025 onwards. Currently, the most advanced production technology globally is at the 3nm level.

• TSMC

TSMC’s 2nm products will be manufactured at the Fab 20 in the Hsinchu Science Park in northern Taiwan and at a plant in Kaohsiung.

The Fab 20 facility is expected to begin receiving related equipment for 2nm production as early as April, with plans to transition to GAA (Gate-All-Around) technology from FinFET for 2nm mass production by 2025.

During TSMC’s earnings call on January 18th, TSMC revealed that its capital expenditure for this year is expected to fall between USD 28 billion and 32 billion, with the majority (70% to 80%) allocated to advanced processes. This figure is similar to that of 2023 (USD 30.4 billion), indicating stable investment to ensure its leading position in 2nm technology.

• Intel

After announcing its re-entry into the foundry business, Intel is actively advancing its foundry construction efforts. The plan includes the introduction of the Intel 20A (equivalent to 2nm) process in the first half of 2024 and the Intel 18A (1.8nm) process in the second half of the year. It is understood that the Intel 18A process will commence test production as early as the first quarter of this year.

Intel’s 2nm roadmap is more ambitious than originally anticipated, being accelerated by over six months. In response to criticisms of its “overly ambitious” plans, Intel swiftly began procuring advanced Extreme Ultraviolet (EUV) equipment.

• Samsung Electronics

Samsung Electronics has devised a strategy to gain an advantage in the more advanced process war through its Gate-All-Around (GAA) technology. Currently, it is mass-producing the first-generation 3nm process based on GAA (SF3E) and plans to commence mass production of the second-generation 3nm process this year, significantly enhancing performance and power efficiency.

Regarding the 2nm process, per a report from Nikkei, Samsung plans to start mass production for mobile devices in 2025 (SF2) and gradually expand to high-performance computing (HPC) in 2026 and automotive processes in 2027.

Currently, Samsung Electronics is producing GAA products for the 3nm process at its Hwaseong plant and plans to manufacture products for both the 3nm and 2nm processes at its Pyeongtaek facility in the future.

• Rapidus

Rapidus, a chip manufacturing company supported by the Japanese government, is expected to trial-adopt 2nm process at its new plant by 2025 and begin mass production from 2027.

If Rapidus’ technology is validated, the global foundry market may expand beyond the Taiwan-Korea duopoly to include Taiwan, Korea, the United States, and Japan.

The technology competition to become a “game-changer” ultimately depends on the competition for customers. It’s rumored that TSMC holds a leading position in the 2nm field, with Apple speculated to be its first customer for the 2nm process. Graphics processing giant NVIDIA is also considered a major customer within TSMC’s client base.

According to TrendForce data as of the third quarter of 2023, TSMC’s revenue share accounted for a dominant 57.9%, with Samsung Electronics trailing at 12.4%, a gap of 45.5 percentage points.

However, Samsung Electronics is not sitting idly by. With continuous technological investment, Samsung’s foundry customer base grew to over 100 in 2022, a 2.4-fold increase from 2017. The company aims to expand this number to around 200 by 2028.

Particularly, Samsung’s early adoption of GAA technology is expected to give it an advantage in achieving early production volumes for advanced processes.

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(Photo credit: TSMC)

TrendForce releases latest trends in memory spot prices. With subdued DRAM supply and demand, transactions are limited. NAND Flash shows low trading volumes as well, expected to persist until after the Chinese New Year. Details below:

DRAM Spot Market:

DRAM spot prices are rising steadily, with larger hikes for chips and smaller increases for modules. Regarding chip spot prices, DDR5 products have shown a sharper price increase compared to DDR4 products. However, the quantities that DRAM suppliers have released into the spot market have been fairly limited since the first quarter is the slow season, so transaction volumes are also modest.

Currently, some Chinese OEMs are winding down their operations in preparation for the Lunar New Year holiday, so the state of spot trading is expected to remain like this until the end of the holiday. The average spot price of the mainstream chips (i.e., DDR4 1Gx8 2666MT/s) rose by 1.00% from US$1.903 last week to US$1.922 this week.

NAND Flash Spot Market:

Suppliers are maintaining an extremely restricted shipment on 3D wafers, which explains the steady increase of prices despite low transactions, though the elevation of prices has fallen below that of recent DRAM spots. Client SSD is also amplifying in partial prices from ongoing demand of replenishment among fabs.

A number of Chinese fabs are going on holiday with Chinese New Year arriving imminently, and the current transaction status is likely to carry on until after the holiday. 512Gb TLC wafer spots have risen by 6.77% this week, arriving at US$3.437.

On January 26th, the Semiconductor Equipment Association of Japan (SEAJ) released statistical data revealing that in December 2023, sales of semiconductor equipment in Japan amounted to JPY 305.799 billion (approximately USD 2.07 billion), marking a 2.4% increase from November 2023.

This represents the second consecutive month of month-on-month growth. However, compared to the same month in 2022, there was a slight decline of 0.3%, marking the seventh consecutive month of contraction. Nonetheless, this decline is significantly smaller compared to the 11% decrease observed in the previous month.

In 2023, the total annual sales of semiconductor equipment in Japan amounted to roughly JPY 3.29 trillion (approximately USD 22.26 billion), reflecting a 6.7% year-on-year decrease. Despite the decline, this figure still represents the second-highest sales record in history, second only to the JPY 3.85 trillion (approximately USD 26.05 billion) recorded in 2022.

SEAJ predicts that aside from the recovery of foundries and logic manufacturers, expenditures from memory manufacturers are expected to significantly rebound in the second half of the fiscal year 2023 (from September 2023 to March 2024). It is anticipated that the compound annual growth rate (CAGR) will continue at 10% until March 2026.

Moreover, driven by the demand for new expenditures related to artificial intelligence (AI), semiconductor equipment sales in Japan are forecasted to surge by 27% in the fiscal year 2024 (starting from April 2024), reaching JPY 4.03 trillion (approximately USD 27 billion).

TrendForce has previously reported that Japan’s resurgence in the semiconductor arena is palpable, with the Ministry of Economy, Trade, and Industry fostering multi-faceted collaborations with the private sector. With a favorable exchange rate policy aiding factory construction and investments, the future looks bright for exports.

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