The Institute for Supply Management (ISM) released the Manufacturing Purchasing Managers’ Index (PMI) for July on August 1st. The report indicated that the Manufacturing PMI was 46.8 in July, down from 49.3 in June and below the market expectation of 48.8. This marks the fourth consecutive month of decline, reaching the lowest level in eight months.

This decline reflects weakening demand and slowing production. The New Orders Index dropped from 49.3 to 47.4, indicating a continuous decrease in order volumes and a further move into contraction territory. The Production Index also fell from 48.5 to 45.9, showing that manufacturing output is slowing down. Additionally, the Employment Index saw a sharp decline from 49.3 to 43.4, signaling a deterioration in manufacturing employment, with companies resorting to more layoffs in response to weak demand.

Overall, the high-interest-rate environment has increased financing costs for businesses, reducing their investment appetite, while also suppressing consumer spending. However, with the Federal Reserve potentially initiating rate cuts in September, some relief for businesses and consumers may be on the horizon.

Nevertheless, even with rate cuts, interest rates are expected to remain elevated, meaning that businesses will still face considerable challenges. Manufacturing is likely to remain subdued in the short term, and economic growth momentum will continue to slow down.

Read more at Datatrack

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(Photo Credit: Pixabay)

As the battle of HBM intensifies between memory giants, the competition of NAND is also heating up. According to a report by Korean media outlet etnews, SK hynix is developing 400-layer NAND flash memory, aiming to get the technology ready for mass production by the end of 2025.

Citing sources familiar with the matter, the report notes that SK hynix is currently working with supply chain partners to develop process technologies and equipment needed for 400-layer and above NANDs. As the company plans to apply hybrid bonding to achieve the breakthrough, many packaging materials and components suppliers are expected to enter the new supply chain.

According to the report, SK hynix is reviewing new materials for bonding and various technologies for connecting different wafers, including polishing, etching, deposition, and wiring. With the goal of getting the technology and infrastructure ready by the end of next year, full-scale production for the 400-layer NAND is anticipated to begin in the first half of 2026.

Currently, the Big Three in the memory sector are all trying to push the boundaries on the layers of NAND. Earlier in April, Samsung confirmed that it has begun mass production for its one-terabit (Tb) triple-level cell (TLC) 9th-generation vertical NAND (V-NAND), with the number of layers reaching 290. For now, the company aims to stack V-NAND to over 1000 layers by 2030.

Micron, on the other hand, has announced the 2650 client SSD, its first product built from 276-layer 3D NAND on July 30^th. Japanese memory chipmaker Kioxia, after successfully increasing the number of 3D NAND layers to 218 in 2023, even stated that achieving a 1,000-layer level by 2027 would be possible.

In August, 2023, SK hynix showcased its sample of the world’s first 321-layer NAND product. Now, as the limit is expected to be pushed up to 400 layers, the company plans to apply hybrid bonding to the manufacturing, which adopts a “wafer-to-wafer” (W2W) structure, etnews notes.

According to the report, until now, SK hynix has been stacking cells on top of the peripherals, the driving circuit area, using the method of “Peripheral Under Cell (PUC)” to manufacture NAND. The structure is similar to a mixed-use high-rise apartment where the peripheral (commercial space) is at the bottom and the cells (residential units) are stacked on top.

However, as the number of NAND layers increases, the peripheral is prone to be damaged during the cell stacking process due to the high heat and pressure generated during the cell process, the report explains.

Therefore, SK hynix plans to apply hybrid bonding to overcome the issues. By implementing cells and peripherals on separate wafers and then bonding the two wafers together, the method allows the peripheral wafer that drive the cells to be separately manufactured, thus enabling a stable increase in NAND layers.

Regarding the progress on the development of 400-layer NAND, SK hynix stated that it cannot confirm details about its technology development or mass production timeline, the report notes.

Read more

• [News] SK Hynix Plans to Manufacture 3D NAND over 400 Layers at -70°C with the Help of TEL
• [News] Outpacing Samsung or the End of Race? Kioxia Aims 1000-layer NAND by 2027

(Photo credit: SK hynix)

On July 31, IQE plc, the global supplier of compound semiconductor wafer products and advanced material solutions, announced the planned initial public offering (IPO) of the Group’s Taiwanese operating subsidiary (IQE Taiwan) on the Taiwan Stock Exchange (TWSE).

The Group intends to list IQE Taiwan on the TWSE and to sell a minority shareholding through a public offering, but it plans to retain control of IQE Taiwan and will continue to leverage its strategic value, with the proceeds of the public offering intended to be utilized across the Group to fund the growth strategy.

Currently, the IPO process is at an early stage, and IQE has engaged Taishin Securities Co. Ltd as its financial advisor to assist in preparing IQE Taiwan for the IPO. IQE explained that the IPO will be proceeded in two stages.

For the initial phase, IQE Taiwan is expected to be listed on the Emerging Market Board in 1H25, subject to usual regulatory procedures and requirements. Further transaction details and information regarding the process will be disclosed as appropriate.

As IQE is capitalizing on the market opportunities ahead, including in GaN Power, the company considers the listing of its Taiwan subsidiary as an exciting opportunity for the entire group, which will accelerate IQE’s investment in its strategy for growth.

Once the subsidiary is successfully listed, IQE is expected to maximize asset value and ensure supply reliability and flexibility for its global customers.

It’s worth noting that aside from IQE, GaN IDM Innoscience is promoting its IPO process on the Hong Kong Stock Exchange while TASC has spun off its subsidiary responsible for 8-inch GaN business and promoted its listing on TWSE, which all reflect the fact that GaN power semiconductor technologies are gaining traction, particularly with the development of AI server and low-altitude economy sectors.

Read more

• [News] Hong Kong Kicked-off Construction of the First GaN Epi-Wafer Pilot Line
• [News] SK keyfoundry Advances in GaN Power Semiconductors, Reportedly Producing for Tesla Soon

(Photo credit: IQE)

Japanese NAND flash giant Kioxia announced today (August 1st) that the building construction of Fab2 (K2) of its Kitakami Plant in Iwate Prefecture was completed in July. As demand is recovering, the company will gradually make capital investments while closely monitoring flash memory market trends. Kioxia plans to start operation at K2 in the fall of Calendar Year 2025, according to its press release.

A portion of investment for K2 will be subsidized by the Japanese government according to the plan approved in February 2024, according to Kioxia.

In addition, the company notes that some administration and engineering departments will move into a new administration building located adjacent to K2 beginning in November 2024 to oversee the operation of K2.

According to a report from Nikkei on July 31, Kioxia’s Kitakami Plant started production in 2020,with the construction of K2 began in 2022. Initially, K2 was scheduled to commence production in 2023.

However, due to a downturn in the memory market and weak demand for NAND Flash used in smartphones and PCs, Kioxia started to reduce production in October 2022, with the extent of production cuts exceeding 30%. As part of these production reduction measures, Kioxia postponed the production start of the K2 facility.

Nikkei’s report further indicates that with market conditions recovering, Kioxia ended its production cuts in June 2024, and the current production line utilization rate has returned to 100%.

To mass-produce advanced memory products, Kioxia, in collaboration with Western Digital (WD), plans to invest a total of 729 billion yen in the Yokkaichi and Kitakami plants, with the Japanese government providing up to 243 billion yen in subsidies.

The Kitakami plant will produce the most advanced “8th generation” memory, with a monthly production capacity of 25,000 wafers. These will be used in AI data centers, as well as in smartphones, PCs, and automotive applications.

On June 26, according to industry sources cited in a report from Reuters, Kioxia plans to submit an initial public offering (IPO) application to the Tokyo Stock Exchange in the near future, aiming to go public by the end of October. Sources indicate that Kioxia will submit its official IPO application by the end of August, with a target listing date at the end of October.

Read more

• [News] NAND Flash Giant Kioxia Reportedly Plans IPO by Late October amid Market Recovery
• [News] Kioxia Optimistic about NAND Market Sentiment; Price Hike Expected in Q2

(Photo credit: Kioxia)

According to a report from Commercial Times, IC design giant MediaTek is making its move into the AI accelerator sector. MediaTek CEO Rick Tsai emphasized that MediaTek aims to be the best partner for edge AI, focusing on advanced technologies and 3nm process to optimize the power consumption and efficiency of its SoCs (system-on-chips).

Tsai mentioned that MediaTek will unveil its Dimensity 9400 flagship series of chips in October, designed to perfectly support most large language models on the market. He expressed confidence in achieving a more than 50% year-over-year revenue increase for flagship devices.

For the ASIC (Application-Specific Integrated Circuit) market, MediaTek has confirmed its entry into the AI accelerator field and will integrate CPUs as needed. ASICs are expected to start the revenue contribution  in the second half of next year.

Additionally, the TAM (Total Addressable Market) for generative AI is still in its early stages. MediaTek focuses on providing leading interconnect capabilities, such as SerDes IP and Ethernet PHY.

Regarding AI technology in the smartphone sector, Rick Tsai believes that flagship smartphones are seeing an increase in ASP, and there is a gradual shift towards high-end smartphones in the Chinese market. He noted that Chinese brands are actively developing AI, particularly in model development, such as open-source models like LLaMA 3.

At MediaTek’s earnings call on July 31st, Rick Tsai noted that the company anticipates a return to normal seasonal patterns in the second half of the year. The outlook for the fourth quarter will largely depend on consumer product demand.

Regarding the outlook in the third quarter, MediaTek expects the revenue to be flattish, ranging from NTD 123.5 billion to NTD 132.4 billion, compared with NTD 127.27 billion last quarter. Gross margin is projected to slide to 45.5-48.5%, from 48.8%, down 3.6 percentage points quarter over quarter and up 1.3 percentage points year-over-year.

Aside from the boost expected from the Dimensity 9400 flagship release, the company’s fourth-quarter market demand is projected to be relatively moderate, which is why the annual outlook remains unchanged. MediaTek expects its full-year gross margin to be between 46% and 48%.

Regarding TSMC’s pricing adjustments, Rick Tsai remains unperturbed, noting that all industry peers face similar cost pressures. MediaTek aims to reflect cost increases through pricing, with a gross margin target of 47% for new products. Progress has also been made in 3nm and 2nm processes, and MediaTek has secured its capacity needs for 2025 with TSMC.

Moreover, MediaTek and NVIDIA are collaborating on automotive chips, with plans to launch their first chip in early 2025. Rick Tsai mentioned that details are yet to be disclosed, but significant advancements in the automotive sector are expected between 2027 and 2028.

Read more

• [News] MediaTek Reportedly Designing ARM-Based Chips for Microsoft’s AI PCs, Launch Expected by End of Next Year
• [News] MediaTek Reportedly Partners with Meta, Entering the Battleground of AI against Apple and Qualcomm

(Photo credit: MediaTek)