TSMC’s fab in Kikuyo, Kumamoto Prefecture, Japan (Kumamoto Fab 1) is expected to begin mass production by the end of 2024, with plans for a second fab in the region. Thus, the influence of TSMC’s presence continues to expand, as per the latest estimates from local financial institutions.

Over the next decade, from now until 2031, the economic spillover effect of TSMC’s operations in Kumamoto is projected to surpass 10 trillion yen, marking a 60% increase from a previous estimate in August 2023.

According to a report from Nikkei citing Kyushu Financial Group (Kyushu FG), a new impact estimate has been released on September 5, showing that TSMC’s operations in Kumamoto Prefecture are projected to generate an economic spillover effect of approximately JPY 11.2 trillion over the next 10 years, until 2031.

This marks a 60% increase from the previous estimate of JPY 6.9 trillion published in August 2023. The projected impact on Kumamoto Prefecture’s GDP over the same period has also risen from JPY 3.4 trillion to JPY 5.6 trillion.

Reportedly, the previous estimate from Kyushu FG last August only considered the benefits of TSMC’s Kumamoto Fab 1. The latest report, however, includes the planned construction of the Kumamoto Fab 2 in its evaluation.

The upward revision is attributed to the expanded magnetic pull of TSMC’s Kumamoto operations (both fabs). The number of companies expected to set up or invest in the region has increased to 171, roughly double the previous estimate.

Initially, the first Kumamoto fab attracted strong interest from suppliers like Sony and Mitsubishi Electric. Following TSMC’s announcement in February to build a second fab, further investments are expected, not only from within Kumamoto but also from other prefectures and overseas suppliers, particularly from Taiwan.

Additionally, the economic impact is expected to extend to wage levels in Kumamoto Prefecture, with an estimated increase of JPY 380,000 in per capita annual income.

Meanwhile, as stated in an report from Bloomberg on May 11th, Kumamoto’s newly appointed governor, Takashi Kimura, once claimed that he would spare no effort to persuade TSMC to establish a third fab in the region.

In addition, a recent report from Kyodo News citing the interview with Taiwanese Minister of Economic Affairs J.W. Kuo has also hinted that TSMC plans to build a third fab in Japan, but with a projected timeline after 2030.

If the third fab is realized, the economic spillover effect is anticipated to expand further.

Read more

• [News] TSMC to Build Third Fab in Japan? The Timing May Be Reportedly after 2030
• [News] TSMC’s Kumamoto Fab 2 Reportedly Begins Land Preparation

(Photo credit: JASM)

To counter the U.S.’s ongoing semiconductor restrictions launched the U.S., China has outspent the U.S., South Korea, Japan, and Taiwan combined on chip manufacturing equipment in the first half of this year.

However, sources cited by a report from Commercial Times have warned that China’s excessive investment could soon lead to global overcapacity issues in traditional chip production, which is similar to the oversupply problems seen in the electric vehicle and solar energy sectors in recent years.

Per the data cited by CNBC from the Semiconductor Equipment and Materials International (SEMI), China spent USD 24.73 billion on chip manufacturing equipment in the first half of 2024, surpassing the combined USD 23.68 billion spent by the U.S., South Korea, Japan, and Taiwan during the same period. This surge in spending is driven by China’s efforts to achieve semiconductor self-sufficiency amid U.S.-China tensions.

The report further notes that since the U.S. implemented stricter export restrictions in October 2022, Chinese companies have been rapidly accelerating their procurement. SEMI data suggests that China’s total procurement this year is expected to exceed USD 35 billion.

Citing Clark Tseng, Senior Director at SEMI, the report indicated that the current equipment stockpiling trend may continue into the second half of this year and is expected to ease only by 2025 as companies work to absorb excess capacity.

Citing Alex Capri, a Senior Lecturer at the National University of Singapore and Research Fellow at the Hinrich Foundation, CNBC pointed out that Chinese companies are preemptively stockpiling chip manufacturing equipment in response to the risk of further export restrictions from Washington before the U.S. presidential election.

Capri highlighted that as China is making smooth progress in traditional chip production, the world might soon face an oversupply of traditional chips, similar to the overcapacity issues seen in electric vehicles and solar panels.

As a result, companies outside China could struggle to compete in the sector with lower-priced products from Chinese companies.

A previous report from Bloomberg pointed out that China has thus become the largest market by revenue for top global chip equipment suppliers. The latest quarterly financial reports from companies such as Applied Materials, Lam Research, and KLA show that China contributes approximately 40% of their revenue.

For Japanese company TEL and Dutch company ASML, the contribution from the Chinese market is even more significant, with nearly half of their revenue coming from China.

Read more

• [News] China’s 1H24 Chip Equipment Purchases Exceed Taiwan, Korea, and US Combined, Reaching USD 25 Billion
• [News] China’s Import of Chip Making Equipment Hit New High This Year, with Mature Nodes Driving the Demand

(Photo credit: SMIC)

Amid crisis and various rumors, Intel might be finding a buyer for parts of its chip business? Citing sources familiar with the matter, the latest report by Reuters suggests that U.S. chip giant Qualcomm, which is known for its Snapdragon processors used in smartphones, has investigated the possibility of acquiring parts of Intel’s design business to enhance its product portfolio.

Ahead of Intel’s board meeting next week, in which a proposal from CEO Pat Gelsinger and other executives regarding operational cuts will be reviewed, Qualcomm is said to be mulling on acquiring various segments of Intel. However, the potential target is not its FPGA unit Altera.

Instead, Qualcomm is particularly interested in Intel’s PC business, according to Reuters, though the mobile chipmaker is evaluating all of the company’s design units. The report indicates that acquiring other segments of Intel, such as the server division, would be less practical for Qualcomm.

Qualcomm, valued at USD 184 billion and known for its smartphone chips with Apple as a key customer, has been developing plans to acquire parts of Intel for several months, Reuters suggests. However, sources indicate that Qualcomm’s interest and plans are not yet finalized and could still be subject to change.

It is worth noting that earlier this week, Intel introduced Lunar Lake, which will power more than 80 new laptop designs across more than 20 original equipment manufacturers. With its boost, Intel targets to ship more than 40 million AI PC processors this year.

Almost in the meantime, on September 4^th, Qualcomm launched its latest AI PC chip, the Snapdragon X Plus 8-core processor, with the intention to counter Intel and AMD.

Qualcomm declined to comment. Intel, on the other hand, stated that there have been no discussions with Qualcomm regarding a potential acquisition, emphasizing that Intel remains “deeply committed to our PC business,” according to Reuters.

On the other hand, getting stuck in its current situation, Intel is said to be pushing U.S. officials to expedite the release of funding, another report by Bloomberg notes. Earlier in April, Intel and Biden administration announced up to USD 8.5 billion in direct funding under the CHIPS Act.

The Silicon Valley company is slated to receive USD 8.5 billion in grants and USD 11 billion in loans under the 2022 Chips and Science Act, but this funding is contingent on meeting key milestones and undergoing extensive due diligence, according to Bloomberg. Therefore, like other potential beneficiaries, Intel has not yet received any money.

More importantly, the report indicates that if Intel lowers the scale of the investment in the U.S., its subsidy package would very likely change as well. Intel CFO David Zinsner reportedly acknowledged that it is unlikely that Intel will receive subsidies before year-end.

Read more

• [News] Intel’s 18A Reportedly Runs into Trouble with Broadcom, while 20A Plan on Arrow Lake Cancelled
• [News] Amidst Rumors of Germany Plant Delay, Intel’s Penang Project Also Reportedly on Hold

(Photo credit: Qualcomm)

According to a report from Korean media ZDNet Korea, Chinese memory manufacturers like CXMT (Changxin Memory Technologies) are aggressively expanding production, which could negatively affect profitability in the traditional DRAM market. Both Samsung and SK hynix are said to be closely monitoring these developments.

Established in 2016, CXMT has become China’s largest DRAM producer with government backing, focusing on traditional DRAM and preparing to enter the HBM market.

Reportedly, CXMT has rapidly increased its DRAM production capacity, from 70,000 wafers per month in 2022 to 120,000 in 2023, and is projected to reach 200,000 wafers this year.

CXMT’s main products include 17nm and 18nm DDR4 and LPDDR4, with its latest offerings being 12nm DDR5 and LPDDR5X, which the company is also developing. Its aggressive DRAM expansion could negatively impact sales and profits for Korean memory manufacturers.

According to TrendForce’s data, the spot price of 16Gb DDR4 increased from $3 in the second half of 2023 to $3.50 in the first half of this year, before falling back to $3.30 in the second half of 2024.

For DDR5, prices have increased from $4.20 in October 2023 to over $4.50 in the first half of this year, approaching $5 in the second half.

By the end of August, the price premium of DDR5 over DDR4 had surged to 53.9%, up significantly from 36.9% six months earlier.

Per a recent report from Nomura Securities cited by ZDNet Korea, the rapid expansion of Chinese companies is expected to negatively impact the memory industry’s profitability, necessitating preparations for potential disruptions. CXMT’s production now accounts for about 5% of the market, potentially influencing prices.

Read more

• [News] Samsung and SK hynix’s China Revenue Doubled in 1H24, Reportedly Driven by Semiconductor and HBM Demand
• [News] China-US Chip War Escalated as YMTC Sues Micron for Patent Infringement

(Photo credit: CXMT)

No eternal allies. No perpetual enemies. The old proverb seems so true when it comes to the semiconductor industry, when the world’s top foundry, TSMC, announced the collaboration with its rival Samsung, the second largest foundry globally, on the development of HBM4, according to the reports by Korean media outlets the Korea Economic Daily and Business Korea. According to analysts cited by the Korea Economic Daily, it would mark their first partnership in the AI chip sector.

Citing the remarks of Lee Jung-bae, Head of the Memory Business Division at Samsung Electronics at SEMICON Taiwan, the reports note that in order to advance in HBM, Samsung is preparing over 20 customized solutions in collaboration with various foundry partners. However, Lee declined to comment on which specific foundry they were partnering with.

The answer has been revealed when on September 5^th, Dan Kochpatcharin, Head of Ecosystem and Alliance Management at TSMC, confirmed that the two companies are working together on developing a buffer-less HBM4 chip.

According to Business Korea, buffer-less HBM is a product that eliminates the buffer used to prevent electrical issues and manage voltage distribution, which Samsung targets to introduce with HBM4. The innovation is expected to enhance power efficiency by 40% and reduce latency by 10% compared to existing models.

The reports note that the main consideration Samsung chooses to team up with TSMC would be the attempt to incorporate customized features requested by major clients like NVIDIA and Google.

Although Samsung can offer a full range of HBM4 services, including memory production, foundry, and advanced packaging, the company aims to utilize TSMC’s technology to attract more clients, according to sources cited by the reports.

The manufacturing process for HBM4 differs from previous generations, with the logic die, the component that functions as the brain of an HBM chip, may now be produced by foundry companies rather than memory manufacturers.

Earlier in April, SK hynix, the current HBM leader as well as Samsung’s biggest rival on memory, announced the partnership with TSMC on HBM4 development and next-generation packaging technology.

Though months later than SK hynix and Micron, Samsung’s 8-layer HBM3e has reportedly started shipments to NVIDIA. It targets to gain a competitive edge with its rival in HBM4, eyeing to enter mass production by late 2025.

Read more

• [News] Samsung Signals Will to Collaborate with Other Foundries on Basedie
• [News] SK hynix to Begin 12-Stack HBM3e Mass Production, Marking Key Moment in HBM Battlefield

(Photo credit: Samsung)