After a month of negotiations, the German government successfully resolved the budget deadlock today. Officials have confirmed that subsidies for the construction of TSMC’s and Intel’s fabs will remain unchanged. They stress that these investments will benefit the entire country.

As reported by CNA, on November 15th, the German Federal Constitutional Court declared the federal government’s redirection of the Covid pandemic emergency budget to the “Climate and Transformation Fund” unconstitutional. This fund includes subsidies for TSMC and Intel, raising concerns about potential deviations from Germany’s commitments and introducing uncertainties to the construction plans.

After a month of intense negotiations among Germany’s three ruling parties, they reached an agreement before the Christmas holiday, putting an end to the budget deadlock. Michael Kellner, Parliamentary State Secretary at the Federal Ministry for Economic Affairs, confirmed on December 13th local time that subsidies for the construction of TSMC’s and Intel’s fabs remain unchanged.

TSMC is planning to establish its first European production base in Dresden, the capital of the German state Saxony, with an investment exceeding EUR 10 billion. The German government has committed to a EUR 5 billion subsidy. Meanwhile, Intel aims to invest EUR 30 billion in Magdeburg and is expected to receive a EUR 9.9 billion subsidy.

In an interview with DPA on December 13th, Kellner emphasized that these investments will ensure future economic strength, benefiting the entire country.

The federal government’s confirmation of providing subsidies for fab construction brought relief to local leaders. Martin Dulig, Economic Minister of Saxony, noted that as time dragged on, trust was at risk of diminishing. He expressed great satisfaction with the federal government’s decision today.

Dulig underscored that for Saxony and Europe, TSMC’s fab establishment can reduce dependence on Asia and the United States, benefiting the local industry chain and small and medium-sized enterprises. This holds significant strategic importance.

“It is both good and important that the federal government has reached an agreement,” Bertram Kawlath, the vice president of the VDMA, an industry association of mechanical engineers in Germany, said in a statement. “The weeks of uncertainty are now over, clearing the way for important investments,” he said.

(Image: TSMC)

Micron, the American memory giant, is gearing up to initiate the production of state-of-the-art “1γ” DRAM at its Hiroshima fab in Japan, starting in 2025. Concurrently, there are plans to manufacture High-Bandwidth Memory (HBM) at the same fab, tailored for the rising demand for generative AI applications.

According to a report from Nikkei Asia on December 13th, Joshua Lee, VP at Micron Memory Japan, made this announcement during the event SEMICON Japan 2023. Lee highlighted that the Hiroshima fab is slated to manufacture DRAM with the most advanced “1γ” process by 2025. He also pointed out that Micron is also going to be the first semiconductor company to introduce Extreme Ultraviolet (EUV) lithography equipment to Japan.

In addition to this, Lee shared insights into Micron’s intentions to produce HBM at the Hiroshima fab, which is widely applied for generative AI applications. He stated that Japan’s strong semiconductor ecosystem will be a key driving force behind Micron’s progress. Furthermore, he emphasized that collaboration is pivotal for Japan to establish itself as a global leader in the semiconductor supply chain.

Earlier In October, the Ministry of Economy, Trade, and Industry (METI) of Japan announced a substantial subsidy of JPY 192 billion for Micron’s Hiroshima fab. Micron has recently declared a comprehensive investment plan of JPY 500 billion in Japan over the next few years, encompassing the Hiroshima fab.

Micron has been actively developing its DRAM manufacturing operations in Japan and Taiwan. Donghui Lu, Corporate VP of Micron Taiwan, revealed in a September interview with the UDN News that approximately 65% of Micron’s DRAM output originates from Taiwan. Regarding the migration to the 1β process, mass production began at Micron Japan last year, and Micron Taiwan has also commenced mass production this year. As for the more advanced 1γ process, production is expected to take place in both Taiwan and Japan by 2025.

TrendForce’s analysis has also revealed that Micron is leveraging its 1β nm technology to produce HBM3e in a bid to gain a competitive edge over Korean suppliers. Its front-end manufacturing is strategically positioned in Japan, aligning with expansion plans for 1β nm capacity.

Additionally, Micron has established a backend factory in Taiwan to meet surging HBM demands driven by the AI era. TrendForce anticipates that HBM products will substantially boost the revenue of DRAM suppliers in 2024.

(Image: Micron)

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According to South Korean electronics industry media “The Elec,” insiders have revealed that, in the year-end organizational restructuring, Samsung Display has strengthened its existing team responsible for handling demand from Cupertino, where the corporate headquarters of Apple is located.

Reportedly, the focus was on enhancing its capability to respond to the potential release of foldable devices by Apple. This suggests that an Apple foldable device might make its debut in the coming year.

The report points out that both Samsung Display and its competitor LG Display are developing a 20.25-inch foldable display for Apple’s future products. Samsung Display’s organizational restructuring appears to be a strategic move to compete more effectively against other rivals, particularly LG Display, in an effort to secure orders for Apple’s foldable panels.

Apple is Samsung Display’s most significant customer for OLED panels, and Samsung Display is the exclusive supplier of foldable OLED panels for its parent company, Samsung Electronics. Samsung Display evidently aims to leverage the experience gained in producing foldable displays for Samsung devices to prepare for potential future orders for foldable iPhones and iPads from Apple.

However, according to the analysis released by TrendForce in the second half of this year, Apple’s development in the folding field still requires time. Apple’s foray into foldables has been tepid, to say the least.

Yet, Apple’s unwavering obsession with user experience could be the culprit. Furthermore, persistent challenges with foldable tech—think panel evenness and hinge design—might be holding them back.

But here’s the kicker: Achieving perfection with larger foldable panels is somewhat simpler than their smaller counterparts. Could this mean Apple might leapfrog right into medium-sized foldable products—like laptops or tablets? Only time will tell.

TrendForce’s insights reveal that by 2023, shipments of foldable smartphones could skyrocket to an impressive 18.3 million units, marking a 43% YoY surge. However, this only captures a slim 1.6% of the year’s total smartphone market.

Fast forward to 2024, and we’re looking at another leap—a 38% growth, translating to a hefty 25.2 million units and nudging the market share up to 2.2% Looking at the medium to long term, TrendForce believes the expansion of the foldable smartphone market is inevitable. By 2027, shipments could soar to a whopping 70 million units, seizing around 5% of the global smartphone market.

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• Foldable Smartphone Market Penetration Estimated at 1.6% in 2023, with Potential to Exceed 5% by 2027, Says TrendForce

(Photo credit: Apple)

Due to escalating raw material and labor expenses, The Elec reported that Dongwoo Fine-Chemistry, a subsidiary of Japan’s Sumitomo Chemical, plans to increase the prices of KrF and L-line photoresists for South Korean semiconductor companies. Price increases vary depending on the type of offering, ranging from around 10% to 20%.

As a pivotal material in semiconductor manufacturing, photoresist leverages photochemical reactions and undergoes processes like exposure and development through photolithography. This facilitates the transfer of intricate patterns from the reticle to the processing substrate. The KrF photoresist highlighted in this report represents a high-end variant, marking a significant competitive market for future players.

The photoresist market has been dominated by several major manufacturers such as Tokyo Ohka Kogyo, DuPont, JSR, Shin-Etsu Chemical, Sumitomo Chemical, and Dongjin Semichem. This market concentration is particularly pronounced in the market segment for semiconductor photoresist.

The photoresist industry demands high specialization, involving intricate formulations of resins, photosensitive acids, and additives—guarded as trade secrets by each company. The substantial technological barrier, coupled with the necessity for purity and performance from laboratory trials to market production, makes the entire product development process time-consuming and intricate. Additionally, meeting customer requirements and adaptation of the production line requires 1 to 3 years of validation, making it challenging for the customers to shift from current photoresist companies.

Faced with technological and customer-centric challenges, photoresist companies wield substantial negotiating power. The recent uptick in photoresist prices has prompted a noteworthy response from the South Korean semiconductor industry.

Insiders from the foundries commented, “In the face of rising photoresist prices, foundries have little choice but to pass on some of the costs to customers (fabless companies).” They further noted, “The price increase in Dongwoo Fine-Chemistry’s photoresist may contribute to a decline in the profitability of foundries and the fabless industry.”

(Image: Dongwoo Fine-Chemistry)

SEMICON Japan, commenced on the 13th, with key participants including Rapidus, tasked with revitalizing advanced semiconductor manufacturing in Japan, major equipment manufacturers Advantest, Japanese material giants Kyocera, Sekisui Chemical, and the Semiconductor Equipment Association of Japan (SEAJ).

The event featured grand exhibits and keynote speeches from top executives of Intel, Applied Materials, and Sony, drawing global participation from semiconductor industry stakeholders.

This year, SEMICON Japan centered its theme around “Accelerate the Future. Shape the Next Era,” conveying the vision of advancing society into a new stage with semiconductors that boast higher performance, lower costs, and increased production volumes, contributing to sustainable development.

Also, spurred by the development of generative AI, many exhibitors this year showcased AI, high-speed computing, and high-performance technologies, highlighting a range of technology for artificial intelligence applications and 3D chip packaging.

Advantest, for instance, exhibited its latest equipment developed for the testing of AI and HPC chips, while Rapidus, currently engaged in the development of 2-nanometer technology, presented developments in small chips and other advanced technologies to event attendees.

Despite challenges such as a surge in semiconductor inventory and sluggish end demand causing the industry’s downward cycle this year, Ajit Manocha, President and CEO of SEMI, states that the semiconductor market is cyclical, foreseeing a turning point toward recovery in 2024 and anticipating increased demand for production capacity, new fab constructions, and advanced technologies and solutions in 2025. With this growth, a robust recovery is expected.

On another front, the Japanese government is steadfast in revitalizing the semiconductor industry, making the Japanese market a global focal point. This commitment has once again drawn exhibitors and participants from around the world to SEMICON Japan this year, with organizers expecting attendance to surpass last year, reaching 70,000 participants.