As TSMC, Samsung, and Intel compete fiercely in the race for 2nm advanced processes, a new wave of the “battle for crucial equipment” is simultaneously unfolding.

According to South Korean reports, ASML, the leader in semiconductor advanced lithography equipment, plans to manufacture ten equipment capable of producing 2nm chips next year, while aiming to increase its annual production capacity to 20 devices in the coming years.

Intel has secured up to six of the 10, taking the lead, while Samsung is also actively pursuing the procurement of the equipment. TSMC faces significant pressure in this competitive landscape.

South Korean tech media SamMobile has unveiled that as major semiconductor manufacturers announce plans to start producing 2nm chips in 2025, ASML is set to unveil equipment capable of manufacturing chips using the 2nm process in the coming months.

The latest extreme ultraviolet (EUV) lithography equipment is expected to increase the numerical aperture (NA) from 0.33 to 0.55. This enhancement improves the light-collecting capability of the optical system, enabling semiconductor fabs to utilize advanced patterning techniques for the production of 2nm process chips.

ASML is the sole global manufacturer of advanced EUV equipment for processes at 7nm. These equipment are not only expensive, costing several million dollars each, but they also have limited production capacity.

It has led to high demand from major semiconductor manufacturers like Samsung, Intel, and TSMC. Currently, only five chipmakers globally, including TSMC, Samsung, SK Hynix, Intel, and Micron, require EUV equipment, with TSMC accounting for 70% of EUV purchases.

Consequently, Samsung is actively pursuing collaboration and has signed a historic agreement with ASML to jointly invest KRW 1 trillion (approximately USD 755 million) in establishing a research and development facility in South Korea.

This collaboration aims to contribute to the development of Samsung’s 2nm process. Samsung plans to commence the production of 2nm process chips by the end of 2025 after acquiring the 2nm manufacturing equipment.

Samsung Electronics Vice Chairman Kyung Kye-hyun, who heads the Device Solutions Division, emphasized that the new agreement with ASML will assist Samsung in acquiring the next-generation high NA EUV equipment.

Kyung said, “Samsung has secured a priority over the High-NA equipment technology. (From the trip), I believe we created an opportunity for us to optimize the usage of High-NA technology for our production of DRAM memory chips and logic chips in the long term.”

On the Intel front, as part of its IDM 2.0 strategy, it is executing a 5 nodes in four years process development plan. Intel emphasizes that its Intel 20A process is progressing towards volume production readiness as planned, while the Intel 18A process is scheduled to test production phase in the first quarter of next year.

Facing the strong competition from Samsung and Intel, TSMC is not sitting idle. According to reports citing from Financial Times, TSMC has showcased its 2nm prototype test results to major clients like Apple and NVIDIA.

TSMC previously mentioned in its earnings call that it expects the 2nm process to enter mass production as scheduled in 2025. The company’s 2nm backside power rail solution is scheduled for the latter half of 2025, with mass production slated for 2026.

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• [News] Samsung’s Discount Strategy Challenges TSMC as the Battle for 2nm Orders Heats Up
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(Photo credit: ASML)

TSMC announced yesterday that Chairman Mark Liu will retire after the shareholders’ meeting in June 2024, and it is possible that CEO C.C. Wei will succeed him as chairman, according to TechNews.

While the news shocked the industry, insiders see it as somewhat expected. As early as March this year, the Taiwan Semiconductor Industry Association (TSIA) elected its 14th board of directors and appointed a new chairman, with TSMC’s Senior Vice President Dr. Cliff Hou taking over the position previously held by Mark Liu, who had served two terms as chairman of TSIA. This move was seen as a possible precursor to Mark Liu’s retirement and succession planning.

Apart from being close to 70 years old, Mark Liu’s retirement is rumored to be related to issues with TSMC’s progress in the United States. TSMC’s Arizona plant previously faced a shortage of skilled equipment installation workers, prompting TSMC to consider sending 500 Taiwanese technicians to assist.

However, locals interpreted this move as an attempt to introduce low-cost labor and compete for local jobs, leading to a standoff between TSMC and the local labor union.

On the other hand, while progress in TSMC’s Japanese factory is relatively smooth, there are reports indicating significant differences between TSMC’s management style and the customary Japanese approach, prompting locals to express discomfort, stating “not accustomed.”

Therefore, how TSMC continues to operate its overseas facilities after Mark Liu’s retirement next year poses a significant challenge.

Industry sources believe that TSMC’s biggest challenge lies in “culture.” Whether operating in the United States or Japan, it requires understanding and operating from the standpoint and perspective of the other party’s culture for smooth cultural integration.

It’s not surprising that Mark Liu mentioned the challenges of setting up plant in the United States, stating that Taiwan cannot only manage Taiwanese people; we must be able to manage people from around the world.

Additionally, international management requires an understanding of local culture, including language and management. In the future, TSMC will need to learn how to manage young talent, explaining “why” rather than following the traditional Taiwanese manufacturing approach of “you do what you are told.”

Mark Liu also mentioned before that TSMC is currently in the early stages of learning. The primary goal is to effectively manage factories, cultivate management team, and “every place has its way of doing things, which is what our management team needs to face.”

However, with TSMC facing the imminent retirement of Mark Liu and the sole leadership transition to C.C.Wei, how he will lead TSMC in effectively managing a global workforce will be the key focus in the industry.

(Photo credit: TSMC)

The global provider of connectivity and power solutions Qorvo announced that it has reached a definitive agreement with Luxshare Precision for the acquisition of Qorvo’s assembly and test facilities in Beijing and Dezhou, China.

According to Qorvo’s official news, the companies anticipate completing the transaction by the first half of calendar 2024, subject to receipt of regulatory approvals and the satisfaction or waiver of other closing conditions.

Upon closing, Luxshare will acquire each facility’s operations and assets, which include the property, plant and equipment, as well as the existing workforce, to enable seamless continuity of operations. Qorvo will continue to maintain its sales, engineering and customer support employees in China to continue serving customers.

Following the close of the transaction, Luxshare will assemble and test products for Qorvo under a newly established long-term supply agreement. The Beijing and Dezhou facilities primarily support Qorvo’s highly integrated advanced cellular products.

Luxshare Precision Expected to Deepen Ties in Apple’s Supply Chain

Reportedly, to establish a presence in the Chinese Radio Frequency (RF) industry, Qorvo has set up facilities in Beijing and Dezhou, Shandong. The Dezhou facility is twice the size of the Beijing facility and is primarily engaged in the assembly, packaging, and testing of RF devices.

The product range includes RF switches, multiplexers, tuners, amplifiers, and various other series. At the time of the public information available, the Dezhou facility was responsible for packaging 75% of Qorvo products and testing 85%-90% of Qorvo products.

Now, Qorvo has decided to sell its Chinese factories, aiming to further reduce capital intensity, support the pursuit of long-term gross margin goals, and ensure continuity in serving Chinese customers.

This move aligns with the current development trends, and in the future, Qorvo intends to achieve continuous market presence in China and improve profitability through the collaboration with Luxshare Precision.

From the perspective of Luxshare Precision, one significant point of connection between Qorvo and its business lies in end customers. As widely known, one of Qorvo’s major clients is the consumer electronics giant Apple, and Luxshare Precision has been providing outsourced manufacturing services for Apple for many years, consistently deepening its integration into Apple’s supply chain.

Read more

• [News] Luxshare Doubles Business with 3 iPhone 15 Orders, Breaking Foxconn’s High-End Supply Dominance
• [News] Apple-Backed Luxshare Disrupts Foxconn’s Manufacturing Dominance with iPhone Production Shift

(Photo credit: Apple)

TSMC today announced that its Chairman Dr. Mark Liu has decided not to seek the nomination of TSMC board membership for the next term and will retire from the Company after the 2024 Annual Shareholders Meeting.

TSMC’s Nominating, Corporate Governance and Sustainability Committee of the board recommends vice chairman Dr. C.C. Wei succeed as the company’s next Chairman, subject to the election of the incoming board in June 2024.

According to the news released by TSMC, Dr. Mark Liu joined TSMC in 1993 and assumed the role of chairman after Founder Dr. Morris Chang’s retirement since June 2018. During his tenure, Dr. Mark Liu has reaffirmed the Company’s commitment to its mission and focused on enhancing corporate governance and competitiveness particularly in technology leadership, digital excellence, and global footprint.

Dr.Liu indicated that, “The past 30 years with TSMC has been an extraordinary journey for me. I want to extend my sincerest thanks to our incredibly talented team who made the company the global leader it is today,” said TSMC Chairman Dr. Mark Liu. “It has been a privilege to serve as Chairman after our legendary Founder Dr. Morris Chang for such a world-renowned enterprise.”

Dr. Liu De-Yin further explained, “I now would like to give my decades of semiconductor experience to other use, spend more time with my family, and start the next chapter of my life. I will continue to oversee the corporate governance with the Board diligently until the last day of this term. I am confident that TSMC will continue to perform outstandingly in the years to come.”

(Photo credit: TSMC)

An increasing number of Chinese semiconductor design companies are seeking collaboration with testing and packaging facilities in Malaysia to carry out advanced chip packaging. According to Reuters’ report, this move aims to hedge the risk of potential expanded U.S. restrictions on the Chinese semiconductor industry.

As there is currently only one non-U.S. testing and packaging provider in Malaysia with advanced capabilities, namely ASE Technology Holding Co., a Taiwanese semiconductor packaging and testing firm, industry sources believe that ASE is likely to become the top choice for orders from Chinese enterprises.

Previously, the U.S. has imposed controls on China’s advanced semiconductor manufacturing processes and access to high-performance chips from major companies like NVIDIA. However, advanced packaging has not yet fallen within the restricted scope.

Two anonymous sources reportedly revealed that some of the Chinese businesses are showing interest in advanced chip packaging services. Despite the fact that the chip packaging sector has not yet faced export controls from the U.S., concerns are rising among businesses due to its involvement in sophisticated technology, fearing that it might be targeted for curbs on exports in the future.

Reuters’ report also indicates that due to the relatively affordable investment costs in Malaysia and the availability of experienced workforce and sophisticated equipment, an increasing number of Chinese chip design firms are seeking Malaysian Firms to carry out advanced chip packaging activities, including graphic processing units (GPUs).

Insiders have informed Reuters that the related contracts only involve packaging and do not violate any restrictions imposed by the U.S.. Additionally, they clarified that wafer manufacturing is not included in these contracts.

Two of the sources mentioned that some contracts have already been agreed. However, these insiders prefer not to disclose the names of the involved companies.

Meanwhile, according to a report from Taiwan’s Economic Daily News, when observing the global landscape of advanced packaging, in addition to TSMC, there are integrated device manufacturers (IDMs) like Intel and Samsung, as well as outsourcing semiconductor assembly and test (OSAT) companies like ASE Technology, Amkor, and others that possess advanced packaging capabilities. Among them, only ASE Technology, Amkor, and Intel have production capacity in Malaysia.

Reportedly, industry analysts predict that Chinese companies seeking advanced packaging support in Malaysia, due to geopolitical considerations, are likely to avoid American companies such as Intel and Amkor. Given that ASE is not an American company and can provide high-end packaging services, it is expected to be the preferred choice for Chinese companies.

ASE has previously stated that it will continue to invest in advanced packaging for AI, expecting the performance of advanced packaging to double next year compared to this year.

Read more

• [News] Bypassing U.S. Restrictions? CXMT Showcases GAA Technology for 3nm Chips
• Malaysia: Rising Global Hub for Semiconductor Backend Testing and Packaging in Supply Chain Shift

(Photo credit: ASE Holdings)