The Japan Services Producer Price Index (SPPI) growth rate keeps above 2%  in July, as reported on August 27. According to the Bank of Japan, the SPPI increased by 2.8% year-on-year in July, slightly lower than the 3.1% recorded in the previous month, but the overall upward trend remains unchanged.

The primary driver of this increase was accommodation services, which experienced a year-on-year growth rate of 13.5%, contributing 1.35 percentage points to the overall SPPI increase. Other contributors included transportation, information and communications, and advertising services, which added 0.44, 0.33, and 0.24 percentage points, respectively.

Since early 2021, the SPPI year-on-year growth rate has been steadily rising, reflecting the ongoing increase in labor costs within Japan’s service sector. The Bank of Japan recently released two reports expressing concerns about wage growth and service inflation, leading the market to anticipate that the Bank of Japan may still implement another rate hike this year to curb the growth of service inflation.

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Following TSMC’s recent acquisition of Innolux’s Tainan plant for NTD 17 billion, another Taiwanese panel maker, AUO, announced on August 27 that it will sell three idled manufacturing facilities in Tainan, Southern Taiwan as well, as memory giant Micron emerged as the buyer.

Part of buildings and facilities located in Taichung, central Taiwan, would also be sold to Micron. According to a report from Economic Daily News, the total transaction amount is NTD 8.1 billion, with an estimated profit of NTD 4.718 billion, as the deal is expected to be completed by the end of this year.

The same report indicates that after Micron’s failed attempt to acquire Innolux’s 4th Plant in Tainan (5.5-generation LCD panel plant), it turned to AUO for a plant purchase.

To focus on its operational strategy, revitalize assets, and optimize its financial structure, AUO’s board of directors has approved the sale, the report suggests. By acquiring the facilities, Micron plans to further expand its DRAM business in Taiwan, with expectations to develop high-bandwidth memory (HBM) for AI applications.

Industry sources cited by the report have further interpreted the recent plant sales by Taiwan’s leading panel manufacturers as a sign of the rising influence of Chinese LCD companies like BOE and CSOT.

With the Chinese companies dominating the LCD industry, Taiwanese panel manufacturers are moving away from volume-based competition and are gradually selling off plants to mitigate risks associated with price fluctuations in the panel market. Micron’s active investments in Taiwan further strengthen the country’s semiconductor cluster advantage.

Reportedly, AUO pointed out that it originally had three color filter plants in Tainan: the Gen-4 C4A, the Gen-5 C5D, and the Gen-6 C6C.

Among them, the C5D and C6C plants were closed last August, leaving only the C4A plant in production. All three plants are being sold to Micron, with the C4A plant continuing operations under a sale-and-leaseback arrangement.

Micron stated that its operations in Taiwan are designed to meet the growing product demands of the AI era and to reinforce Micron’s market leadership. Through this acquisition, Micron plans to leverage this site to focus on front-end wafer testing,  to supporting the ongoing expansion of DRAM production at Micron’s Taichung and Taoyuan facilities.

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• [News] Micron Advances in Acquiring Innolux’s Southern Taiwan Facility After TSMC Outbids It for the G5.5 Plant
• [News] TSMC Acquires Innolux’s Plant in Southern Taiwan to Expand Advanced Packaging Capacity

(Photo credit: Micron)

Recently, the Zhongguancun Science City Technology Growth Phase II Fund and the Vertex Ventures China Technology Innovation Phase II RMB Fund were successively launched, with a combined investment of over CNY 8.5 billion targeting integrated circuit (IC) and semiconductor sectors.

• Zhongguancun Science City Technology Growth Phase II Fund Launched with a Total Scale of CNY 5 Billion

On August 26, as per the official website of Haidian, Beijing, Zhongguancun Science City Technology Growth Phase II Fund was officially launched with a total scale of CNY 5 billion. This marks a further investment in technology innovation investment for Zhongguancun Science City, expanding the total scale CNY to 10 billion.

Zhongguancun Science City Technology Growth Fund is funded by the Haidian government, with each phase sized at CNY 5 billion. The Technology Growth Phase II Fund consists of a CNY 4 billion parent fund and a CNY 1 billion direct investment fund, managed by an investment company under Zhongguancun Science City.

In recent years, Haidian District has actively built a “1+X+1” modern industrial system, in reference to accelerating the development of strategic emerging industries such as biomedicine, IC, and commercial space under the support of the two “1”s–AI and technology service industries.

The Technology Growth Phase II Fund will closely align with this industrial system, focusing on high-potential, high-growth projects, leveraging capital to boost high-quality regional economic development, and accelerating the transformation and application of technological innovation achievements.

It is reported that following this official launch, the “Zhongguancun Science City Technology Growth Fund Sub-fund Application Guidelines” will simultaneously seek collaborative projects, with the first batch of collaborative sub-fund projects expected to be completed by September 30.

• Vertex Ventures Phase II Fund Completed a Fundraising of CNY 3.5 Billion, Targeting Sectors including Semiconductor

On August 26, Vertex Venture announced the recent successful completion of fundraising for its “Vertex Technology Phase II RMB Fund” (hereinafter referred to as “RMB Phase II”), with a scale exceeding CNY 3.5 billion, setting a new record compared to RMB Phase I.

Reportedly, RMB Phase II will primarily zero in on innovative technology sectors, including chip semiconductors, intelligent robotics solutions, large model-related applications, new energy, new materials, and medical technology.

It is noted that Vertex has consistently maintained a stable pace of fundraising and investment, with its main funds including five funds in USD and two funds in CNY, each steadily expanding in scale.

Notably, this phase has seen a significant reinvestment from LP in Phase I, as well as the introduction of large insurance companies, further improving the LP structure.

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• [News] China’s Semiconductor Industry Ushers in a New Period
• [News] China Contributes Over 40% of U.S. Chip Equipment Makers’ Revenue despite Export Controls

(Photo credit: ZGC Science City)

China’s export controls on crucial semiconductor materials are reportedly hitting the supply chain, with concerns rising over potential shortages of advanced chips and military optical hardware.

According to the U.S. Geological Survey, China produces 98% of the world’s gallium and 60% of its germanium. However, since July of last year, the Chinese government has imposed export restrictions on these minerals, causing their prices in Europe to nearly double over the past year. China claims these measures are to protect national security and interests in response to U.S. export sanctions.

As per a report from the Financial Times, an industry source who works at a large consumer of semiconductor materials has revealed that the situation with China is extremely critical, with significant reliance on China’s supplies.

Affected companies have also disclosed that while there is still some bulk shipment of Chinese gallium, the overall export volume has dropped by about half since the controls were implemented. If China continues to reduce gallium exports as it did in the first half of the year, reserves could be depleted, leading to shortages.

Per the same report from Financial Times, Jan Giese, Senior Manager at Frankfurt-based trading firm Tradium, noted that the gallium and germanium his company obtained through China’s new export licensing program account for only a small portion of past purchases. These export controls are adding additional pressure on markets outside China, making an already challenging market even more complex.

Gallium and germanium are crucial for semiconductor applications, military, and communications equipment. They are essential materials for producing advanced microprocessors, optical fiber products, and night vision goggles, so ongoing export restrictions by the Chinese government could hinder the production of such items.

Meanwhile, the Chinese government has announced new export restrictions on antimony this month. Antimony is used in armor-piercing ammunition, night vision goggles, and precision optical components. This follows previous export controls on graphite and rare earth extraction and separation technologies.

Under the regulations, each shipment requires approval, which takes 30 to 80 days and involves uncertainty, making long-term supply contracts impractical. Applications must specify the buyer and intended use.

The report cites sources in the semiconductor materials sector, noting that China is using these restrictions to catch up with the U.S. and other semiconductor technology leaders. Given the current global situation and U.S.-China relations, there seems to be no motivation for China to ease export controls.

Addressing the matter, the China’s foreign ministry declined to comment.

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• [News] China’s Antimony Export Restrictions Starting in Mid-September Reportedly Cause Prices to Skyrocket
• [News] Chip War Escalates: China to Enforce State Ownership of All Rare Earth Materials in October

(Photo credit: iStock)

In mid-August, Samsung is said to be accelerating its progress on next-gen HBM, targeting to tape-out HBM4 by the end of this year. Now it seems SK hynix has maintained its competitive edge, as the company aims to tape out HBM4 in October, which will be used to power NVIDIA’s Rubin AI chips, according to the reports by Wccftech and ZDNet.

In addition, the reports note that SK hynix also plans to tape out HBM4 for AMD’s AI chips, which is expected to take place a few month later.

To further prepare for the strong demand from AI chip giants’ upcoming product launch, SK hynix is assembling development teams to supply HBM4 to NVIDIA and AMD, according to Wccftech and ZDNet.

Per SK hynix’s product roadmap, the company plans to launch 12-layer stacked HBM4 in the second half of 2025 and 16-layer in 2026. With NVIDIA’s Rubin series planned for 2026, it is expected to adopt HBM4 12Hi with 8 clusters per GPU.

SK hynix is the major HBM3e supplier for NVIDIA’s AI chips, as the memory giant has taken the lead by starting shipping the product a few months ago, followed by Micron. Samsung’s HBM3, on the other hand, have been cleared by NVIDIA in July, while its HBM3e is still striving to pass NVIDIA’s qualification.

According to the reports, the introduction of HBM4 represents another major milestone for SK hynix, as it offers the fastest DRAM with exceptional power efficiency and higher bandwidth.

HBM4 will feature double the channel width of HBM3E, offering 2048 bits versus 1024 bits. Moreover, it supports stacking 16 DRAM dies, up from 12 in HBM3e, with options for 24Gb and 32Gb layers. This advancement will enable a capacity of 64GB per stack, compared to 32GB with HBM3e, the reports suggest.

On August 19, SK hynix showcased the ambition on securing its leadership on HBM, claiming that the company is developing a product with performance up to 30 times higher than current HBM.

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• [News] HBM Technological Battle to be on the Next Level
• [News] SK Hynix President to Join Semicon Taiwan, Bolstering HBM Partnership with TSMC and NVIDIA

(Photo credit: SK hynix)