According to a report from Bloomberg, Applied Materials Inc. pointed out that the U.S. Department of Justice (DOJ) has requested information regarding its federal grant applications, further intensifying the government’s investigation into the company’s operations.

Per a regulatory filing last week, the chip equipment manufacturer received a subpoena from the DOJ and is fully cooperating with the government. Reportedly, the company stated that the request pertains to certain federal award applications and information submitted to the federal government.

Applied Materials had applied for government support for its planned research center under the U.S. CHIPS and Science Act, which was expected to bolster local chip facilities.

Yet, per previous reports by Bloomberg and Tom’s Hardware, the company’s funding application was ultimately denied, leaving the USD 4 billion research center planned for Sunnyvale, California, underfunded.

It is worth noting that though the U.S. keeps tightening the export controls on the semiconductor sector, major chip equipment makers seem to become increasingly dependent on the Chinese market.

Thus, Applied Materials’ dealings with China have already been under government scrutiny. Notably, from February to April, China accounted for 43% of the total sales of Applied Materials, a 22 percentage point increase YoY.

Back in February of this year, Applied Materials had already received subpoenas from the U.S. Securities and Exchange Commission, as well as the U.S. Attorney’s Office for the District of Massachusetts, even before the DOJ subpoena, and was reportedly under investigation for allegedly sending equipment to SMIC, China’s leading chipmaker, through South Korea without export licenses.

Addressing the matter, Applied Materials did not immediately respond to requests for comment.

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• [News] Funding for Applied Materials’ USD 4 Billion R&D Center Reportedly Denied by the U.S. Government

(Photo credit: Applied Materials)

Recently, the Future Chip Innovation Research Institute of Xiong’an New Area was officially established in Hebei, China.

According to the official Wechat account of “Xiong’an New Area,” the Future Chip Innovation Research Institute of Xiong’an New Area was jointly founded by the RISC-V Working Committee of the China Electronics Standardization Association, Chipup, ESWIN, and Stream Computing as the initial sponsors.

The research institute will engage in technical research and development, product testing, standard formulation, evaluation, application demonstration, and collaboration based on the RISC-V open instruction set, promoting the high-quality development of the RISC-V industry in Xiong’an New Area.

RISC-V is an open instruction set architecture (ISA) based on the principles of Reduced Instruction Set Computing (RISC). Currently, open source has become a new model for global collaborative innovation. As an advanced and easily-customizable architecture, the open-source RISC-V is still in the early stage of development in terms of ecosystem.

At present, RISC-V has not only become the preferred CPU architecture in many fields in China, including IoT, industrial, medical, intelligent connected vehicles, general computing, and communication computing, but also injecting strong momentum into technological innovation and industrial transformation in the global chip industry. It is expected to gain a foothold in the CPU field and compete with x86 and ARM.

Data shows that in 2022, 10 billion processors based on the RISC-V architecture were shipped, a scale that took x86 and ARM 30 years to achieve. The industry expects that by 2025, the number of RISC-V cores will increase to 80 billion. With the advent of the artificial intelligence (AI) era, RISC-V is also expected to embrace new development opportunities.

Currently, the overall AI chip market is still dominated by GPU (Like NVIDIA, AMD), followed by Arm. TrendForce pointed out that, RISC-V has made some investment in data center in recent years, and with efforts from NVIDIA and CSPs, RISC-V is expected to become another niche market, possibly targeting the open-source AI market (Like Meta) or other niche applications.

(Photo credit: RISC-V Working Committee)

China’s debut AAA game, Black Myth: Wukong, has achieved remarkable success just four days post-launch. The game has sold over 10 million copies on Steam alone, with peak simultaneous online players reaching 3 million. Priced around NT$1,280 per copy, its total sales revenue has hit NT$12.8 billion (approximately USD$400 million).

According to the Commercial Times, the game’s detailed graphics and cinema-quality 3D scenes have driven gamers to upgrade their memory and graphics cards, boosting related hardware sales.

Industry sources cited by the Commercial Times predict that this surge in China’s self-developed gaming trend will enhance demand for memory and graphics card upgrades. Companies such as ADATA, Kingston, and Teamgroup, as well as Gigabyte, ASUS, and MSI, are expected to see a corresponding increase in sales performance.

Black Myth: Wukong, based on the famous “Journey to the West” IP, has topped Steam’s charts with over 1.75 million simultaneous online players since its August 20 release. Developed by GameScience, a company that had faced near-bankruptcy twice in its six years of operation, the game gained prominence after Tencent’s investment.

Players cited by Commercial Times have noted that the game’s high-resolution graphics require at least 32GB of RAM to run smoothly, with many standard laptops and PCs, typically equipped with 16GB, being unable to support it. Graphics card upgrades are crucial, with minimum specifications costing over NT$10,000 (approximately USD$314). The high price of NVIDIA’s RTX 4090 card raises questions about whether players will invest heavily in upgrades.

The Black Myth: Wukong phenomenon has sparked extensive discussion. Amid a mobile game-dominated market, the resurgence of interest in standalone games signifies that China’s game production standards are now rivaling those of Japan and Korea, with international gamers and bloggers actively engaging in conversations about the title.

(Photo credit: Stram)

The Japanese Ministry of Internal Affairs and Communications (MIC) released the consumer price data on August 22, showing that the July CPI increased by 2.8% year-over-year, the same as the previous month, and slightly above market expectations by 0.1%.

This sustained growth was mainly due to a significant rise in electricity and gas prices, which drove energy prices up by 12.0% (compared to 7.7% the previous month). However, the year-over-year increase in fresh food prices fell to 4.2% (down from 8.2% the previous month), offsetting some of the overall increase.

The core CPI, which excludes fresh food, increased by 2.7% year-over-year, slightly higher than the previous month’s 2.6%, marking the 28th consecutive month above the Bank of Japan’s 2% inflation target. Further excluding energy, the double core CPI rose by 1.9%, down by 0.3% from the previous month, marking the first time it has fallen below 2% since September 2022.

At the end of July, the Bank of Japan unexpectedly raised interest rates by 15 basis points, causing significant market volatility. Subsequently, the Bank of Japan Governor stated that there would be no rate hikes during periods of market instability. However, according to the latest Shunto negotiations, Japanese wages saw the largest increase in 33 years (5.33%).

Simultaneously, on August 20, the Bank of Japan published two reports on the impact of demographic changes on wage structures and the impact of service inflation on overall CPI.

This appears to signal that the Bank of Japan may continue to raise rates in response to the persistence of service inflation. The market currently expects the Bank of Japan to maintain rates unchanged in September but anticipates another rate hike before the end of the year.

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TSMC is accelerating its global expansion, receiving robust support from governments in Japan and China. In the first half of this year alone, TSMC secured nearly NT$8 billion in subsidies from the two countries, bringing its total government aid from Japan and China to NT$62.5 billion(approximately USD $1.96 billion).

According to the Central News Agency, TSMC’s financial reports show that its subsidiaries—JASM in Japan and Nanjing in China—received these subsidies to support their plans to establish and operate manufacturing facilities in Kumamoto and Nanjing. The funds are primarily earmarked for real estate, plant, and equipment purchases, as well as to offset construction and operational costs.

TSMC reported that it received NT$7.051 billion in subsidies from Japan and China in 2022, followed by NT$47.545 billion in 2023, and an additional NT$7.956 billion in the first half of this year, totaling NT$62.5 billion.

Governments worldwide have increasingly recognized semiconductors as vital strategic assets, spurring a race to subsidize the industry’s growth. With TSMC’s cutting-edge technology leading the global market, it has become a key target for investment incentives from various governments. TSMC has already established a presence in Kumamoto, Japan, and Arizona, U.S., and is expanding its 28nm capacity in China.

On August 20, TSMC broke ground on its European Semiconductor Manufacturing Company (ESMC) in Dresden, Germany, marking the start of its initial land preparation phase for a new wafer fab. This expansion extends TSMC’s global footprint from the U.S., China, and Japan to Europe.

The groundbreaking ceremony, hosted by TSMC Chairman C.C. Wei, was attended by German Chancellor Olaf Scholz and European Commission President Ursula von der Leyen. The European Commission also announced its approval of a €5 billion German subsidy package under EU state aid rules, demonstrating its support for the ESMC project.

TSMC’s Kumamoto plant is progressing rapidly, with its first wafer fab set to begin mass production of 12nm, 16nm, 22nm, and 28nm process technologies in the fourth quarter of this year. A second fab is scheduled to start production in 2027, utilizing 6nm, 7nm, 12nm, 16nm, and 40nm process technologies.

In Arizona, TSMC’s first wafer fab is on track to begin 4nm process production in the first half of 2025, with a second fab expected to commence 2nm production in 2028. The company also plans to construct a third fab that will deploy 2nm or more advanced technologies.

In April, the U.S. Department of Commerce announced a USD $6.6 billion subsidy for TSMC’s advanced fab in Arizona. However, TSMC has yet to receive these funds and does not speculate on future government subsidies.

(Photo credit: TSMC)