Reportedly, South Korean memory giant SK Hynix has capitalized on the surging demand in the artificial intelligence (AI) and high-performance computing (HPC) markets. As per a report by ComputerBase, with its HBM and DDR5 products, SK Hynix has swiftly emerged from the slump in the memory market in 2023 and anticipates further growth. Consequently, a new phase of expansion is underway.

The report further indicates that SK Hynix plans to invest at least KRW 120 trillion (approximately USD 89.4 billion) to construct a new semiconductor production complex in Yongin, located in the central part of Gyeonggi Province, South Korea. This includes four independent fabs, with preparations currently underway, one-third of which has already been completed.

The report indicates that SK Hynix announced plans to build the world’s largest chip production facility as early as 2019. However, due to various reasons, the project was delayed until 2022 when agreements were reached with the central and local governments of South Korea, allowing the project to progress.

SK Hynix intends to commence its expansion project officially in March 2025, with the first fab scheduled for completion in 2027 and the entire complex expected to be completed by 2046. It is yet clear whether the first fab will produce DRAM or NAND Flash memory. However, given the significant demand for HBM products in the AI market, and considering SK Hynix’s tight production capacity, this is likely the direction they will choose.

HBM, a type of DRAM primarily used in AI servers, is experiencing a surge in demand worldwide, led by NVIDIA. Moreover, according to a previous TrendForce press release, the three major original HBM manufacturers held market shares as follows in 2023: SK Hynix and Samsung were both around 46-49%, while Micron stood at roughly 4-6%.

Additionally, the four planned fabs are expected to occupy half of the complex’s size, with SK Hynix also constructing numerous supporting facilities in the area, such as wastewater treatment plants and resource recycling centers. Apart from SK Hynix, Samsung has also opted to construct a similar semiconductor production complex nearby, which includes research and development centers, to meet the anticipated market demands ahead.

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(Photo credit: SK Hynix)

The US-China tech war continues to escalate, as reported by the Financial Times (FT). Beijing has reportedly instructed official institutions in China to refrain from using PCs and servers equipped with microprocessors from Intel and AMD, as well as to reduce procurement of Microsoft Windows operating systems and database software outside of China.

In response to these reports, both Microsoft and Intel have declined to comment, while AMD, China’s Ministry of Finance, Ministry of Industry and Information Technology, and the China Information Security Evaluation Center have not responded to requests for comment from FT reporters.

FT further reveals that Chinese authorities have requested state-owned enterprises to promote localization internally. Intel and AMD are the two major semiconductor giants in the United States, dominating nearly all global market shares of PC processors.

As both Intel and AMD are significant customers of TSMC’s advanced process nodes, this move is expected to influence TSMC’s future order status. Regarding China’s full-scale development of proprietary computer processors, its potential impact on ASIC-related companies in Taiwan remains to be seen.

As per Industry sources cited by the report, they have suggested that this move by Chinese authorities demonstrates their determination to strengthen local semiconductor autonomy and enhance manufacturing and design capabilities. On the manufacturing side, the focus remains on supporting SMIC, while chip design is primarily led by companies such as Huawei and Phytium.

Per the same report, following the release of new guidelines by China’s Ministry of Finance and Ministry of Industry and Information Technology on December 26th last year, officials have begun adhering to the latest standards for PC, laptop, and server procurement this year. They have mandated that government departments at the township level and above, as well as party organizations, must incorporate standards for purchasing “secure and trustworthy” processors and operating systems.

The China Information Technology Security Evaluation Center has published the first list of “safe and reliable” processors and operating systems, all of which are from Chinese enterprises.

Among the 18 approved processors are chips from Huawei and Phytium. Chinese processor manufacturers are utilizing a hybrid architecture combining Intel x86, Arm, and self-developed designs for chip production, while operating systems are sourced from open-source Linux software.

Prior to the speculated tightening of restrictions by China on the United States, a report from Bloomberg citing sources had already signaled that the US government is considering adding Chinese semiconductor companies linked to Huawei to a blacklist.

Currently, companies that have been listed on the entity list by the US Department of Commerce include Huawei, SMIC (Semiconductor Manufacturing International Corporation), and Shanghai Micro Electronics. Additionally, China’s other major memory manufacturer, Yangtze Memory Technology Corp, was added to this restriction list in 2022.

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• [News] US Government Considers Adding ChangXin Memory Technologies to Entity List, Imposing Further Sanctions on Chinese Firms
• [News] US Considers Sanctioning Huawei-Linked Chinese Chip Network, Huawei-Related Enterprises Blacklisted

(Photo credit: iStock)

As the demand for AI is becoming urgent, according to industry sources cited by the ChinaTimes News, TSMC’s Fab20 P1 plant in Hsinchu’s Baoshan area will undergo equipment installation engineering in April to warm up for mass production of the GAA (gate-all-around) architecture.

Reportedly, it is expected that Baoshan P1, P2, and the three fabs scheduled for advanced process production in Kaohsiung will all commence mass production in 2025, attracting customers such as Apple, NVIDIA, AMD, and Qualcomm to compete for production capacity.

Regarding this rumor, TSMC declined to comment.

Per the industry sources cited by the same report, whether wafer manufacturing is profitable is depending on the yield after mass production. The key lies in the speed at which the yield improves; the longer it takes and the higher the cost, the more challenging it becomes.

As per the same report, TSMC is said to be accelerating its entry into the 2-nanometer realm in April, aiming to shorten the time required for yield improvement in advanced processes. This move not only poses a continuous threat to Samsung and Intel but also widens TSMC’s leading edge.

Industry sources cited by the ChinaTimes’ report have revealed that TSMC has prepared for first tool-in at P1, with trial production expected in the fourth quarter this year and mass production in the second quarter of next year. Equipment manufacturers indicate that they have already deployed personnel and conducted preparatory training in response to TSMC’s customized demands.

As a new milestone in chip manufacturing processes, the 2-nanometer node will provide higher performance and lower power consumption. It adopts Nanosheet technology structure and further develops backside power rail technology. TSMC believes that the 2-nanometer node will enable it to maintain its technological leadership and seize the growth opportunities in AI.

In fact, the cost of producing 2-nanometer chips is exceptionally high. Per the report citing sources, compared to the 3-nanometer node, costs are expected to increase by 50%, with the per-wafer cost reaching USD 30,000. Therefore, the initial adopters are expected to be smartphone chip clients, notably Apple.

Previously, per 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.

Unlike with the 3-nanometer node, the complexity of the design means customers must start collaborating with TSMC earlier in the development process. Market speculations suggest that many clients such as MediaTek, Qualcomm, AMD, and NVIDIA have already begun cooperation. TSMC’s earnings call also emphasized that the number of customers for N2 is higher than that for N3 at the same stage of development.

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.

The competition in the development of 2-nanometer technology is fierce. ASML plans to produce 10 2-nanometer EUV lithography machines this year, with Intel already reserving 6 of them. Additionally, Japan has mobilized its national efforts to establish Rapidus Semiconductor Manufacturing, which also aims to compete in the 2-nanometer process.

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• [News] Intensified Competition in the Semiconductor Industry for 2nm Technology Dominance, Potentially Reshaping the Global Foundry Market
• [News] TSMC’s Primary Client for 2nm Chips Expected to be Apple, Set to Debut with iPhone 17 Lineup Next Year

According to a report from Korean media outlet THE ELEC, a senior executive at analog chip manufacturer Texas Instruments (TI) stated that the company is transitioning its production of gallium nitride (GaN) chips from several 6-inch fabs to 8-inch fabs.

The same report further noted that Jerome Shin, manager of Texas Instruments’ Korean subsidiary, stated at a press conference in Seoul that Texas Instruments is preparing to build 8-inch fabs in Dallas and Aizu, Japan. This move will enable the company to offer more competitively priced GaN chips.

Jerome Shin pointed out that there has been a shift in the perception of GaN chips compared to silicon carbide (SiC) chips since 2022. While GaN chips were previously considered more expensive, this perception is changing because Texas Instruments is transitioning its production from 6-inch fabs to 8-inch fabs. Producing larger wafers means more chips per wafer, leading to increased productivity and lower costs for GaN chips.

Currently, the price of GaN chips is already lower than that of SiC chips. Once the transformation of Texas Instruments’ fabs in Dallas and Aizu, Japan is completed, they will be able to offer even more affordable solutions. Expansion at the Dallas facility is expected to be completed by 2025, although Jerome Shin did not disclose the timetable for the Aizu facility.

However, some industry sources cited in the report suggest that Texas Instruments’ plan may lead to a comprehensive decline in GaN chip prices.

Currently, Texas Instruments is also transitioning the production of power management IC from 8-inch fabs to 12-inch fabs. This move has already resulted in a decrease in the prices of power management chips across the industry.

Still, reportedly, transitioning the production of power management chips from 8-inch fabs to 12-inch fabs could enable Texas Instruments to save over 10% in costs.

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• [News] Major Acquisition in SiC/GaN Semiconductor Industry Concludes as Infineon Completes GaN Systems Purchase

(Photo credit: Texas Instruments)

Following NVIDIA’s GTC 2024, AMD also hosted an AI PC Innovation Summit on March 21st, with CEO Lisa Su leading the top executives in attendance. As per a report from Commercial Times, by collaborating with partners including brands ASUS, MSI, and Acer, AMD has showcased its exciting applications in AI PCs.

AMD highlights that future language models will evolve in two directions: one is the large-scale models introduced by tech giants, which use increasingly more parameters and become more complex in operation, with closed architecture being a major characteristic.

The other direction is small open-source models, which are becoming more widely accepted by the public. These models with fewer parameters can run smoothly on edge devices, especially AI PCs, expecting a significant influx of developers.

Furthermore, the AI compute requirements for large and small language models are entirely different. AMD has different hardware positioning to meet all demands.

Lisa Su emphasizes that artificial intelligence is driving a revolution, reshaping every aspect of the tech industry, from data centers to AI PCs and edge computing. AMD is excited about the opportunities presented by this new era of computing.

TrendForce previously issued an analysis in a press release, indicating that the AI PC market is propelled by two key drivers: Firstly, demand for terminal applications, mainly dominated by Microsoft through its Windows OS and Office suite, is a significant factor. Microsoft is poised to integrate Copilot into the next generation of Windows, making Copilot a fundamental requirement for AI PCs. Secondly, Intel, as a leading CPU manufacturer, is advocating for AI PCs that combine CPU, GPU, and NPU architectures to enable a variety of terminal AI applications.

Introduced around the end of 2023, Qualcomm’s Snapdragon X Elite platform is set to be the first to meet Copilot standards, with shipments expected in the second half of 2024. This platform is anticipated to deliver around 45 TOPS.

Following closely behind, AMD’s Ryzen 8000 series (Strix Point) is also expected to meet these requirements. Intel’s Meteor Lake, launched in December 2023 with a combined CPU+GPU+NPU power of 34 TOPS, falls short of Microsoft’s standards. However, Intel’s upcoming Lunar Lake might surpass the 40 TOPS threshold by the end of the year.

The race among Qualcomm, Intel, and AMD in the AI PC market is set to intensify the competition between the x86 and Arm CPU architectures in the Edge AI market. Qualcomm’s early compliance with Microsoft’s requirements positions it to capture the initial wave of AI PC opportunities, as major PC OEMs like Dell, HPE, Lenovo, ASUS, and Acer develop Qualcomm CPU-equipped models in 2024, presenting a challenge to the x86 camp.

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• [News] AMD Reportedly Faces Obstacles in Selling Custom AI Chips to China
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(Photo credit: AMD)