Previously, TSMC has indicated that TSMC’s 2nm process will be deployed as scheduled in the second half of 2025, indicating that before that, the most advanced chips in the market will be produced using TSMC’s 3nm process. Apple, which has consistently been the first to adopt TSMC’s latest process, is set to be the first to adopt TSMC’s latest 2nm process.

▲ TSMC’s Layout of Global Production Capacity Edited by TrendForce, November, 2023

According to a report from the media outlet wccftech, Apple’s iPhone, Mac, iPad, and other devices will be the first users of TSMC’s 2nm process. Apple will leverage TSMC’s 2nm process technology to enhance chip performance and reduce power consumption. This advancement is expected to result in longer battery life for future Apple products, such as the iPhone and MacBook.

Currently, Apple’s chips designed for products like MacBook, iPad, and iPad Pro are produced using TSMC’s 3nm process technology. In 2023, the company announced the inclusion of the M3 Pro and M3 Max chips in the new MacBook Pro models. 

Additionally, TSMC will utilize new technology based on the GAAFET (Gate-All-Around Field-Effect Transistor) transistors instead of the traditional FinFET. While this new architecture makes the manufacturing process more complex, it also brings advantages such as smaller transistor sizes and lower power consumption.

In terms of performance analysis, Apple’s current chips are transitioning from the 5nm process to the 3nm process. This transition has resulted in a 10% increase in CPU performance and a 20% increase in GPU performance.

For now, TSMC is actively planning the capacity for future 2nm process technology through the construction of two new factories. Additionally, TSMC will utilize new technology based on the GAAFET (Gate-All-Around Field-Effect Transistor) architecture instead of the traditional FinFET architecture.

While this new architecture makes the manufacturing process more complex, it also brings advantages such as smaller transistor sizes and lower power consumption.

The report further indicates that Apple is expected to adopt the 2nm process for chip production in the iPhone 17 by 2025. Additionally, the same technology will also be applicable to the production of Mac’s M-series chips. 

Furthermore, as TSMC is quietly developing 1.4nm process, it is expected to be unveiled in 2027. This development means that, like the 2nm process technology, Apple could potentially be the first company to receive the latest process technology from TSMC for chip production, whether it’s 1.4nm or 2nm.

Read more

• [News] Samsung’s Discount Strategy Challenges TSMC as the Battle for 2nm Orders Heats Up
• [News] TSMC Responds to Rumors of New 1.4nm Fab

(Photo credit: NVIDIA)

NVIDIA CEO Jensen Huang stated on January 25th that the current phase marks the beginning of AI expansion and growth. He emphasized that AI is set to transform everything and be omnipresent in the future. However, the most significant challenge at present is the ongoing tight supply of AI chips.

According to a report from Economic Daily News, Huang, who recently visited Taiwan, shared his thoughts during an interview before attending the NVIDIA Taiwan branch’s year-end banquet.

He revealed that during his trip to Taiwan, he had meetings with TSMC’s founder couple, Morris and Sophie Chang, as well as with CEO C.C. Wei, his semiconductor manufacturing partner. During the discussion, Huang and Wei talked about the substantial demand for NVIDIA’s products and the necessary collaborative efforts with TSMC to address market needs.

Regarding the challenges facing AI development, Jensen Huang believes that one key challenge lies in expanding the production capacity of AI chips. While there is a tight supply of NVIDIA products, the demand is incredibly strong. 

As a result, NVIDIA actively collaborates with TSMC and other supply chain partners to meet this demand. The company continues to advance AI technology while also paying attention to related security issues.

When discussing the major trends in AI, Jensen Huang pointed out that the development of AI can help rejuvenate the computer industry. He further indicated that AI will operate in smartphones, computers, robots, automobiles, as well as in the cloud and data centers. Huang emphasized that NVIDIA is a pioneer in accelerating computation and AI computing, and in the next decade, he envisions a reshaping of computation, with every industry being impacted.

Before Huang’s visit to Taiwan, Huang also went to China recently, which is seen as an effort to alleviate concerns among customers about adopting the downgraded versions

Read more

• [News] Expert Insights on NVIDIA’s AI Chip Strategy – Downgraded Version Targeted for China, High-End Versions Aimed Overseas

(Photo credit: NVIDIA)

Intel announced on the evening of January 25th that it will collaborate with UMC to develop 12-nanometer process platform technology. The production will utilize Intel’s wafer fab capacity in the United States, and both parties will share the cash generated from the collaboration. The production is expected to commence in 2027.

This marks Intel’s first collaboration with a Taiwanese foundry in process development. Intel is actively venturing into the foundry business, and this collaboration with UMC not only marks a new milestone in the Taiwan-US semiconductor foundry industry but also initiates a new competitive relationship in the global foundry industry.

Intel and UMC have not disclosed the expected investment amount for their collaboration. UMC stated that the investment amount cannot be disclosed as the collaborative technology will not enter production until 2027, at which point it will begin contributing to revenue.

Therefore, the investment will be shared by both parties. Regarding whether they will advance towards more advanced processes, UMC stated that they do not respond to distant matters and primarily focus on financial indicators that the company can afford.

Intel noted that the collaboration with UMC to develop the 12-nanometer process platform is primarily aimed at addressing the high growth in markets such as mobile, communication infrastructure, and networking.

This long-term collaboration combines Intel’s large-scale manufacturing capacity in the United States with UMC’s extensive experience in mature processes in foundry, expanding the process portfolio while providing a better regionally diversified and resilient supply chain to assist global customers in making better procurement decisions.

The new process node, according to Intel, will be developed and manufactured in Fabs 12, 22 and 32 at Intel’s Ocotillo Technology Fabrication site in Arizona.

“Taiwan has been a critical part of the Asian and global semiconductor and broader technology ecosystem for decades, and Intel is committed to collaborating with innovative companies in Taiwan, such as UMC, to help better serve global customers,” said Stuart Pann, Intel senior vice president and general manager of Intel Foundry Services (IFS).

He further stated that, “Intel’s strategic collaboration with UMC further demonstrates our commitment to delivering technology and manufacturing innovation across the global semiconductor supply chain and is another important step toward our goal of becoming the world’s second-largest foundry by 2030.”

Jason Wang, UMC co-president, said that UMC’s collaboration with Intel on a U.S.-manufactured 12 nm process with FinFET capabilities in the United States is a crucial aspect of the company’s pursuit of cost-effective capacity expansion and technological node advancement.

UMC anticipates that this collaboration will assist customers in smoothly migrating to this critical node while benefiting from the resilience of the expanded capacity in the North American market.

UMC looks forward to strategic collaboration with Intel, leveraging the complementary advantages of both parties to expand potential markets and significantly accelerate technology development timelines.

TrendForce believes that this partnership, which leverages UMC’s diversifed technological services and Intel’s existing factory facilities for joint operation, not only aids Intel in transitioning from an IDM to a foundry business model, it also allows UMC to agilely leverage FinFET capacity without the pressure of heavy capital investments.

TrendForce forecasts that this collaboration slashes average investment by a staggering 80%, compared to the cost of new equipment. This calculation includes only the expenses related to the relocation of equipment, secondary piping costs for factory services, and other minor associated expenses for ancillary equipment.

However, the journey is not without its challenges. UMC’s 14nm process, in development since 2017, is yet to hit mass production, and its 12nm process is still in the R&D phase, with mass production eyed for late 2026. This collaboration’s mass production timeline is tentatively set for 2027, with the FinFET architecture’s stability under careful watch.

Overall, TrendForce views this alliance as a significant step. UMC brings its plentiful experience in mature processes, while Intel contributes its advanced technological prowess.

This partnership is not just about mutual benefits in the 10nm process level; it’s a watchpoint for potentially deeper and more extensive collaboration in their respective fields of expertise. In the dynamic world of semiconductor manufacturing, this Intel-UMC alliance is a fascinating development to keep an eye on.

Read more

• [News] Intense Competition with Samsung and Intel in Advanced Processes; TSMC Speeds Up 2nm Progress
• [News] Intel to Launch New Automotive AI Chips, Competing with NVIDIA and Qualcomm

(Photo credit: Intel)

Despite the U.S. export control measures on semiconductor equipment, including those from the Netherlands-based ASML, a major player in advanced manufacturing tools, recent financial reports have contrastingly indicate a doubling of the revenue share from the Chinese market?

On January 24, ASML, a leading provider of photolithography equipment, released its latest financial results for the fourth quarter and the full year of 2023. In Q4 2023, the revenue reached EUR 5.683 billion, with China accounting for 39% of ASML’s total revenue. 

Source: ASML

Although slightly lower than the 46% in Q3, the annual perspective for 2023 reveals that China contributed to 29% of ASML’s revenue for the year. This marks a significant increase compared to the 14% revenue share from China in 2022, indicating a direct doubling of ASML’s revenue share in the Chinese market.

Source: ASML

ASML’s Chief Financial Officer, Roger Dassen, explained the significant increase in the revenue share from the Chinese market within a year during the interview accompanying the recent financial report. 

Dassen attributed the strong performance in China in 2023 to orders received at the end of 2022, which were executed throughout 2023. In the previous quarter, ASML had highlighted that the global order delivery rates, including the Chinese market, had been relatively low, below 50% over the past few years. 

He then emphasized that the demand from Chinese orders primarily comes from mid-critical and mature manufacturing, and this demand remains solid.

With the Netherlands imposing new restrictions on the export of advanced chip manufacturing equipment effective from January, ASML officially announced that starting from 2024, they would not be able to ship NXT:2000i and higher DUV lithography equipment to China.

Equipment below NXT:2000i, including NXT:1970i and NXT:1980i, would also be restricted from shipment to advanced process fabs in China. Dassen anticipated that this will impact 10% to 15% of sales in the Chinese market in 2024. However, he emphasized that this aligns with the financial forecasts provided in the third quarter of last year, and the demand for mature manufacturing processes remains robust.

For the full year of 2023, ASML reported a net sales revenue of EUR 27.6 billion, with a net income of EUR 7.8 billion and a gross profit margin of 51.3%. ASML estimates that the net sales for 2024 will be similar to those in 2023.

Read more

• [News] ASML Reports Partial Revocation of Export Licenses for DUV Equipment
• [News] The Battle on Advanced Processes Intensifies as ASML Plans to Produce Ten Equipment Capable of 2nm Chip Production Next Year

(Photo credit: ASML)

South Korean memory giant SK Hynix has released its financial results for the fourth quarter of 2023 and the full year 2023, ending on December 31, 2023. In the fourth quarter, the revenue reached KRW 11.306 trillion, operating profit amounted to KRW 346 billion, and net loss was KRW 1.38 trillion. The operating profit margin for Q4 2023 was 3%, with a net profit margin of negative 12%.

Source: SK Hynix

SK Hynix noted that, with the rebound in the memory market, the operating profit for the fourth quarter of 2023 reached KRW 346 billion, successfully marking a turnaround from losses. This signifies that SK Hynix, in just one year, has managed to break free from the continuous operating losses experienced since the fourth quarter of 2022.

SK Hynix emphasizes that the overall memory market conditions improved in the last quarter of 2023 with demand for AI server and mobile applications increasing and average selling price (ASP) rising. 

Simultaneously, the effective implementation of a profit-oriented business plan by SK Hynix has enabled the company to achieve the goal of turning losses into profits within just one year.

Source: SK Hynix

Furthermore, SK Hynix has reduced the cumulative scale of operating losses that persisted until Q3 2023. In total, the consolidated revenue for 2023 reached KRW 32.766 trillion, with an operating loss of KRW 7.73 trillion and a net loss of KRW 9.138 trillion. Overall, the operating loss rate for 2023 is 24%, and the net loss rate is 27%.

SK Hynix also notes that in the DRAM sector for 2023, the company actively addressed customer demands. The revenue for the company’s flagship products, DDR5 and HBM3, increased by more than four and five times, respectively, compared to 2022.

Additionally, considering the relatively slow recovery in the NAND Flash memory market, the business plan primarily focuses on investment and cost efficiency.

In response to the growing trend in demand for high-performance DRAM, SK Hynix will smoothly proceed with the mass production of HBM3e memory for AI and the development of HBM4.

TrendForce’s earlier research into the HBM market indicates that NVIDIA plans to diversify its HBM suppliers for more robust and efficient supply chain management. The progress of HBM3e, as outlined in the timeline below, shows that SK Hynix provided its 8hi (24GB) samples to NVIDIA  in mid-August.

Simultaneously, the company aims to supply high-performance and high-capacity products like DDR5 and LPDDR5T to the server and mobile markets.

Moreover, to address the continued growth in demand for AI servers and the widespread adoption of edge AI computing applications, SK Hynix will exert efforts in the development of high-capacity server module MCR DIMM and mobile module LPCAMM2 to respond to the ever-increasing demand for AI servers and on-device AI adoption.

For NAND, the company aims to continue to improve profitability and stabilize the business by expanding sales of premium products such as eSSD, expected to improve profitability and strengthen internal management.

Lastly, SK Hynix emphasizes its commitment to maintaining and enhancing profitability and efficiency by continuing to expand the production of high-value-added products in 2024, similar to its strategy in 2023. The company will focus on minimizing capital expenditures while prioritizing stable business operations. 

“We achieved a remarkable turnaround, marking the first operating profit in the fourth quarter following a protracted downturn, thanks to our technological leadership in the AI memory space,” said Kim Woohyun, Vice President and Chief Financial Officer (CFO) at SK Hynix.

Kim further stated, “We are now ready to grow into a total AI memory provider by leading changes and presenting customized solutions as we enter an era for a new leap forward.”

Read more

• [News] SK Hynix Signs Prioritized Supply Agreement with NVIDIA for HBM3e, 2023 Q4 Revenue Expected to Surpass KRW 10 Trillion Again
• [News] TSMC Reportedly Attracts Influx of 3nm Customers, Predicts Production Capacity Utilization to Surge to 80% by Year-End

(Photo credit: SK Hynix)