As reported by CNA, the Hsinchu Science Park Bureau(HSPB) is overseeing the expansion project for the Longtan Science Park in Taoyuan, which is essential for advanced manufacturing processes with nodes of 2 nanometers and below, a critical need for TSMC. The project has sparked social controversy, leading TSMC to withdraw its plan to establish a factory. In response, HSPB has indicated that several semiconductor companies are interested in developing in the vicinity of the Longtan Park.

The “Anti-Longtan Science Park Phase 3 Expansion Association” posted on Facebook that representatives from the HSPB, TSMC, and the association recently engaged in discussions. TSMC representatives expressed their unease about the significant social controversies surrounding the Longtan Science Park Phase 3 Expansion. They acknowledged the local residents’ attachment to their land and homes and have decided to abandon their original plan to set up a factory within the expansion project.

TSMC did not provide a direct response to the association’s post. In regard to the controversies surrounding the Longtan expansion project, TSMC stated that it is a tenant of the Science Park land. The park’s development is under the government’s purview, and they respect the residents and competent authorities, refraining from making further comments.

In response to the diverse opinions within the local community, HSPB announced its intention to adjust the expansion scope to ensure a win-win situation, balancing industrial development and the rights of the people. They plan to reevaluate the land requirements for the project, seeking and incorporating public opinions. The second public hearing, originally scheduled for October, will be postponed.

HSPB stressed that the expansion of the park aims to upgrade Taiwan’s industrial clusters, rather than merely serving the land needs of a single company. The establishment of the science park is intended to provide a high-quality industrial environment that encourages investment, the introduction of advanced technology industries, and scientific talent to enhance regional innovation capabilities, thus fostering research and innovation in the domestic industry.

The management bureau pointed out that both Hsinchu Park and Longtan Park have fully leased land. Considering the concentration of high-tech talent, mature industry clusters, convenient transportation, and adequate water and power supply infrastructure in Northern Taiwan, several semiconductor companies hope to continue their development in the vicinity of the Longtan Park.

To accommodate industrial development and future land use planning, the HSPB Bureau is planning the expansion of the Longtan Park, aiming to drive the transformation and upgrading of Taiwan’s industries.

(Image: sipa.gov.tw)

Semiconductor inventory adjustments are showing positive signs, with the MCU market, which was among the first to bear the brunt of price pressure, now leading the way as Chinese companies have recently ceased their aggressive price-cutting strategies to clear their inventory. In fact, some MCU product lines have even begun to see price increases.

According to reports from Taiwan’s Economic Daily, MCUs are widely used across various key sectors, including consumer electronics, automotive, and industrial control. The recent increase in pricing suggests a resurgence in end-demand, indicating that the semiconductor industry is on the path to recovery.

Prominent global MCU manufacturers include Renesas, NXP, and Microchip, all of which play essential roles in the global semiconductor industry. On the other hand, Taiwanese companies such as Holtek, Nuvoton, Elan, and Sonix represent the local landscape.

Industry experts attribute the current developments to the COVID-19 pandemic, which caused disruptions in the supply chain throughout 2020 and 2021, leading to a frenzied rush to secure semiconductor components. This resulted in a surge in orders and significant price increases for ICs. However, 2022 marked a change in the industry landscape as demand weakened in various end-user applications. MCUs were hit hardest, and manufacturers’ inventories climbed steadily, reaching historical highs, with some industry leaders acknowledging that their inventory levels reached several months’ worth of supply.

To address the challenges posed by these soaring inventories, the MCU industry faced its darkest period from the fourth quarter of last year to the first half of this year. Chinese MCU manufacturers resorted to aggressive price cuts, even drawing renowned IDMs into the price-cutting competition. Fortunately, recent market conditions have started to ease the inventory-clearing phase. Chinese MCU manufacturers, who could no longer bear losses, have stopped selling below cost and have even made slight price adjustments to return to a more reasonable pricing range.

Unnamed Taiwanese MCU manufacturers revealed that as the attitude of Chinese companies towards price-cutting has softened, the pricing gap between products from Taiwanese and Chinese companies have gradually narrowed. Moreover, there are indications of small, urgently needed orders coming in, which will facilitate faster inventory reduction.

1. Gloomy Global Economy Affects Smartwatch Sales, Predicted 2023 Shipments at 130 Million

In 2023, the trajectory of the smartwatch industry is shaped by two major forces. On one hand, it’s driven by the shift in demand from the smart wristband market, becoming a gateway for brand manufacturers to create market momentum on a global scale. However, it also grapples with the impact of the sluggish economy, which affects consumers’ disposable income, leading to a reduction in market demand.

It’s estimated that the market will grow to 130 million units by the end of 2023. Brand manufacturers’ share of shipments hasn’t seen significant changes, and they continue to introduce innovative products. Apple leads with over 30%, followed by Samsung at nearly 10%, alongside Huawei, Garmin, Fitbit and others.

2. Manufacturers Opt for More Cautious Strategies, Focusing on Minor Upgrades and Diversified Research

Given the uncertain landscape, major smartwatch manufacturers like Apple, Samsung, and Huawei are expected to embrace a more conservative development approach. While they will keep innovating and introducing new products, their design philosophy leans towards incremental upgrades.

High-end watch models will be introduced with caution, targeting well-defined niche markets. Furthermore, some brands are likely to venture into other smart wearable devices, but many of these new devices face challenges in terms of data analysis, application integration, and market maturity, which means it will take time before they become commercially viable.

3. AI Focus: Major Manufacturers Prioritize AI Integration for Accuracy and Innovation

Without making substantial changes to their existing structure, companies are proactively utilizing AI technology as the cornerstone of their development strategy. This approach yields benefits such as fine-tuning existing sensor data for more precise measurements and the creation of applications that cater to consumer needs.

As AI applications heavily rely on chip performance and battery life, companies like Apple are upgrading their chips. This move aims to elevate past auxiliary functions into mainstream operations through AI. Moreover, this technology may further integrate with their Vision Pro devices’ gesture controls, enhancing the overall user experience.

The digital world is undergoing a massive transformation powered by the convergence of two major trends: an insatiable demand for real-time insights from data, and the rapid advancement of Generative artificial intelligence (AI). Leaders like Amazon, Microsoft, and Google are in a high-stakes race to deploy Generative AI to drive innovation. Bloomberg Intelligence predicts that the Generative AI market will grow at a staggering 42% year over year in the next decade, from $40 billion in 2022 to $1.3 trillion.

Meanwhile, this computational force is creating a massive surge in energy demand—posing serious consequences for today’s data center operators. Current power conversion and distribution technologies in the data center can’t handle the increase in demand posed by the cloud and machine learning—and certainly not from power-hungry Generative AI applications. The quest for innovative data center solutions has never been more critical.

Gallium Nitride (GaN) semiconductors emerge as a pivotal solution to data center power concerns, helping counter the impact of Generative AI challenges. We dive into how Generative AI affects data centers, the advantages GaN, and a prevailing industry perception of the Power Usage Effectiveness (PUE) metric—which is creating headwinds despite GaN’s robust adoption. With Generative AI intensifying power demands, swift measures are essential to reshape this perception and propel GaN adoption even further.

The rising impact of Generative AI on the data center

Today’s data center infrastructure, designed for conventional workloads, is already strained to its limits. Meanwhile, the volume of data across the world doubles in size every two years—and the data center servers that store this ever-expanding information require vast amounts of energy and water to operate. McKinsey projects that the U.S. alone will see 39 gigawatts of new data center demand, about 32 million homes’ worth, over the next five years.

The energy-intensive nature of generative AI is compounding the data center power predicament. According to one research article, the recent class of generative AI models requires a ten to a hundred-fold increase in computing power to train models over the previous generation. Generative AI applications create significant demand for computing power in two phases: training the large language models (LLMs) that form the core of generative AI systems, and then operating the application with these trained LLMs.

If you consider that a single Google search has the potential to power a 100W lightbulb for 11 seconds, it’s mind-boggling to think that one ChatGPT AI session consumes 50 to 100 times more energy than a similar Google search. Data centers are not prepared to handle this incredible surge in energy consumption. One CEO estimates that $1 trillion will be spent over the next four years upgrading data centers for AI.

Unfortunately, while technologies like immersion cooling, AI-driven optimizations, and waste heat utilization have emerged, they offer only partial solutions to the problem. A critical need exists for power solutions that combine high efficiency, compact form factors, and deliver substantial power outputs. Power electronics based on silicon are inefficient, requiring data centers to employ cooling systems to maintain safe temperatures.

GaN: Unparalleled performance and efficiency

GaN offers unparalleled performance and efficiency compared to traditional power supply designs, making it an ideal option for today’s data centers—particularly as Generative AI usage escalates. GaN transistors can operate at faster switching speeds and have superior input and output figures-of-merit. These features translate into system benefits including higher operating efficiency, exceeding Titanium, and increased power density.

GaN transistors enable data center power electronics to achieve higher efficiency levels—curbing energy waste and generating significantly less heat. The impact is impressive. In a typical data center environment, each cluster of ten racks powered by GaN transistors can result in a yearly profit increase of $3 million, a reduction of 100 metric tons of CO2 emissions annually, and a decrease in OPEX expenses by $13,000 per year. These benefits will only increase as the power demands of Generative AI increase and rack power density rises 2-3X.

While the benefits of GaN are profound, why aren’t even more data center operators swiftly incorporating the technology? Adoption faces headwinds from what we call the “PUE loophole”—an often-overlooked weakness within the widely accepted PUE metric.

The PUE Loophole

The PUE metric is the standard tool for assessing data center energy efficiency, calculated by dividing the total facility power consumption by the power utilized by IT equipment. The metric helps shape data center operations and guides efforts to reduce energy consumption, operational costs, and environmental impact.

Data center operators continuously strive to monitor and improve the PUE to indicate reduced energy consumption, carbon emissions, and associated costs. However, the PUE metric measures how efficiently power is delivered to servers—yet it omits power conversion efficiency within the server itself. As a result, the PUE calculation does not provide a comprehensive view of the energy efficiency within a data center—creating a blind spot for data center operators.

Consider that many servers still use AC/DC converters that are 90 percent efficient or less. While this may sound impressive—10 percent or more of all energy in a data center is lost. This not only increases costs and CO2 emissions, but it also creates extra waste heat, putting additional demands on cooling systems.

GaN is remarkably effective in addressing the PUE Loophole. For instance, the latest generation of GaN-based server AC/DC converters are 96 percent efficient or better – which means that more than 50 percent of the wasted energy can instead be used effectively. Across the entire industry, this could translate into more than 37 billion kilowatt-hours saved every year—enough to run 40 hyperscale data centers.

GaN can provide an immediately cost-effective way to close the PUE loophole and save high amounts of energy. But because the PUE doesn’t consider AC/DC conversion efficiency in the server, there is no incentive to make AC/DC converters more efficient.

This article was authored by Paul Wiener, Vice President of Strategic Marketing at GaN Systems.

Explore more

• Global GaN Power Device Market Set to Soar, Reaching $1.33 Billion by 2026
• GaN in Automotive Applications and Who’s Leading?

(Photo credit: Google)

On October 11th, Amkor announced the official opening of its factory located in the Yen Phong 2C Industrial Park in Bac Ninh Province, Vietnam. The new facility, occupying 57 acres, is set to become Amkor’s largest, with an investment of approximately $1.6 billion by 2035. The factory primarily focuses on providing advanced system-level packaging and testing solutions to meet the semiconductor industry’s demand for advanced packaging. However, the company has not disclosed the factory’s current production and capacity.

Multiple Players Pursue CoWoS

The ongoing AI trend continues to drive demand for Chip-on-Wafer-on-Substrate (CoWoS) technology, benefiting TSMC, which holds a significant share of CoWoS production orders. However, companies like ASE Group, Amkor, and UMC are also positioning themselves in the CoWoS packaging manufacturing space. Industry experts believe that given the current high demand for TSMC’s CoWoS production, part of this demand may potentially shift to Amkor’s factories.

Furthermore, the popular Nvidia AI chips, which are in high demand globally, utilize 2.5D packaging technology, a responsibility currently held by TSMC. Recently, Nvidia hinted at the mass production of new AI chips like the GH200 and general server chip L40S, with reports suggesting that L40S will not require 2.5D packaging. Instead, it will be shared among several backend packaging companies, including ASE, Amkor, and SPIL.

Industry source has noted the strong demand for CoWoS in the AI sector, and with TSMC’s CoWoS production capacity already unable to meet demand for several quarters, some demand may potentially shift to Amkor or Samaung’s facilities.

Amkor has announced plans to expand its advanced packaging CoWoS-like capacity. According to industry insiders, Amkor’s monthly production capacity for 2.5D advanced packaging is expected to reach approximately 3,000 wafers in early 2023, with estimates of reaching 5,000 wafers by the end of 2023 and aiming for a significant increase to 7,000 units by the end of 2024.

Additionally, ASE Group has announced its presence in advanced CoWoS-related packaging. With their fan-out chip-on-substrate (FOCoS-Bridge) packaging technology, ASE has been chosen by major chip design house to handle their backend packaging after CoW.

In mid-September, South Korean media reported that Samsung is set to introduce its FO-PLP 2.5D advanced packaging technology to catch up with TSMC in the field of advanced packaging for AI chips. Samsung’s Advanced Packaging (AVP) team began developing FO-PLP advanced packaging for 2.5D chip packaging, allowing the integration of System-on-Chip (SoC) and High Bandwidth Memory (HBM) into an interposer to create a complete chip.

It’s worth mentioning that Samsung’s FO-PLP 2.5D packaging is rectangular, while TSMC’s CoWoS 2.5D uses a circular substrate. Samsung’s FO-PLP 2.5D packaging avoids edge substrate losses and boasts higher production efficiency. However, due to the need to transplant chips from wafers onto rectangular substrates, the process is more complex.

CoWoS Demand Continues

CoWoS technology is a form of 2.5D and 3D packaging, where chips are stacked and then packaged onto a substrate, resulting in a 2.5D or 3D structure. This technology reduces chip space, while also decreasing power consumption and costs. CoWoS packaging is applied in high-performance computing, artificial intelligence, data centers, 5G, the Internet of Things, automotive electronics, and other fields.

TrendForce research indicates a growing demand for advanced packaging technologies for AI and HPC chips. Currently, TSMC’s CoWoS is the primary choice for AI server chip production. CoWoS packaging mainly consists of CoW (Chip on Wafer), integrating various logic ICs (such as CPUs, GPUs, ASICs, etc.) and HBM memory, while oS (On Substrate) integrates CoW elements using Solder bump interconnects and packages them on a substrate. These CoWoS packages become the primary computing units on server motherboards, together with other components like networks, storage, power supply units (PSUs), and other I/O units, forming complete AI server systems.

Explore more

• Advanced Packaging in High Demand, TSMC and OAST Increasing Equipment Orders
• Understanding the 3D Packaging Trends Pursued by TSMC, Intel and Samsung
• An In-Depth Explanation of Advanced Packaging Technology: CoWoS

(Photo credit: Amkor)