Though being capable of running AI features may be the primary focus for global smartphones this year, due to restrictions on AI products’ usage in China, the Wall Street Journal reports that the upcoming new iPhone, expected at the end of the year, will not be able to use ChatGPT in China. Apple has reportedly been in discussions with companies like Baidu for potential partnerships, but no progress has been made yet.

China is Apple’s largest market for iPhones outside the United States. While smartphones from various brands will integrate AI this year at full throttle, incorporating apps like OpenAI’s ChatGPT, these apps from Western countries are not permitted for use in the Chinese market. According to the Wall Street Journal, industry insiders indicate that Apple is still searching for a Chinese AI partner. However, with the new iPhone set to launch in a few months, no progress has been made.

Notably, as per a report from TrendForce, in the first quarter, Apple faced a decline in sales in the Chinese market, resulting in a  drop in annual production to 47.9 million units.

In China, companies must obtain government approval to release AI devices. As of March this year, the Office of the Central Cyberspace Affairs Commission has approved 117 generative AI products, none of which are from brands outside of China.

The Wall Street Journal, citing industry sources, reported that Apple had tentatively inquired with Chinese authorities earlier this year about the possibility of allowing foreign language AI models on their smartphones. While believing approval to be unlikely, Apple has reportedly sought partnerships with local companies instead.

One of Apple’s main competitors, Samsung, has already launched the Galaxy S24 this year, featuring real-time translation and AI-enhanced photo editing and search capabilities. Samsung’s phone includes its own generative AI and also collaborates with Google. However, since Google’s AI tool Gemini is not permitted for use in China, Samsung has shifted to partnering with Baidu and Meitu AI.

It is not new for global tech companies to adjust their product and service offerings to cater to the Chinese market. For example, Apple uses state-owned enterprise servers for iCloud in China, and the recently launched Vision Pro cannot stream Apple TV+ in the country.

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• Q1 Smartphone Production Increases Due to Low Base Last Year, Expected to Decline 5–10% in Q2, Says TrendForce
• [News] Continued Slump in iPhone Demand in China – February Shipments Reportedly Plunge by 33%

(Photo credit: Apple)

Novatek, a major driver IC manufacturer in Taiwan, entered the iPhone 16 supply chain early this year and secured certification ahead of its competitor LX Semi. However, according to a report from Commercial Times citing sources, its Korean competitor, LX Semi, recently also obtained certification and, with strong support from foundries, is challenging Novatek’s exclusive supply position.

The same report continues to cite sources indicating that LX Semi remains the exclusive supplier for iPhone 16 Pro/Pro Max’s LG Display (LGD) OLED screens in the second half of the year, with significant acceleration in chip production starting in September. It is estimated that the order allocation between Novatek and LX Semi will be 55:45.

Industry sources cited by Commercial Times reveal that LX Semi has a closer partnership with leading foundries, compared to Novatek’s previous strategy of relying on established foundries. Reportedly, another sources confirms as well that LX Semi has recently been certified and, with support from foundries, will begin significant wafer production by the end of the third quarter.

Other industry sources cited by the report further pointed out that Apple’s OLED panels are supplied by Korean manufacturer LGD, while LX Semi was originally LG Group’s subsidiary. Therefore, after LX Semi obtained certification, they increased orders from LGD, thereby reducing the originally planned procurement of OLED driver ICs from Novatek. However, for Novatek, they still heavily rely on Apple orders. If shipments go smoothly, they are expected to further secure opportunities in other product lines, such as iPad OLED DDIs and Apple Watch.

Yet, concerns are also noted, as the report brought up that the momentum in TV applications accompanying sports events is expected to slow down. Additionally, subdued sales during China’s 618 shopping festival and a conservative attitude among brand manufacturers in the second half of the year may affect demand for components like DDICs.

Therefore, Novatek keeps investing in establishing OLED production lines in order to seek new breakthroughs, such as IT TCON (timing controller) products. These products are manufactured using a 12-nanometer advanced process to create efficient computing units, integrating UHD 240Hz LCD and OLED panel display compensation functions, targeting high-end laptops.

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(Photo credit: Novatek)

According to a previous report from Nikkei citing sources, TSMC is rumored to be entering the fan-out panel-level packaging sector. As cited in a report from UDN, Intel and Samsung have also announced plans to invest in this area. With TSMC, the leading wafer foundry, joining the fray, the three semiconductor giants are set to compete in fan-out panel-level packaging.

TSMC stated yesterday that the company is closely monitoring the progress and development of advanced packaging technologies, including panel-level packaging technology.

Nikkei reported that in response to future AI demand trends, TSMC is collaborating with equipment and material suppliers to develop new advanced chip packaging technology. This technology uses a rectangular substrate for packaging, replacing the current traditional circular wafer, to accommodate more chipsets on a single wafer. The report further mentioned that TSMC’s research is still in its early stages and might take several years to commercialize, but it represents a significant technological shift.

Reportedly, TSMC previously considered the challenge of using rectangular substrates to be too high, requiring substantial time and effort from both the company and its suppliers, along with upgrades or replacements of many production tools and materials.

Nikkei  also mentioned that TSMC is currently experimenting with rectangular substrates measuring 515 mm in length and 510 mm in width, providing more than three times the usable area of a 12-inch wafer.

TSMC is expanding its advanced chip packaging capacity, with the expansion of the Taichung plant mainly for NVIDIA, while the Tainan plant is primarily for Amazon and its chip design partner Alchip Technologies.

TSMC’s CoWoS advanced chip packaging can combine two sets of NVIDIA Blackwell GPU chips and eight sets of high-bandwidth memory (HBM). As single chips need to accommodate more transistors and integrate more memory, the mainstream 12-inch wafer might not be sufficient for packaging advanced chips in two years.

Samsung and Intel have also recognized the aforementioned issues and are investing in next-generation advanced packaging technologies.

Samsung currently offers advanced packaging services such as I-Cube 2.5D packaging, X-Cube 3D IC packaging, and 2D FOPKG packaging. For applications requiring low-power memory integration, such as mobile phones or wearable devices, Samsung already provides platforms like fan-out panel-level packaging and fan-out wafer-level packaging.

Intel is planning to launch the industry’s first glass substrate solution for next-generation advanced packaging, with mass production scheduled between 2026 and 2030. Intel anticipates that data centers, AI, and graphics processing—markets that require larger volume packaging and higher-speed applications and workloads—will be the first to adopt this technology.

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• [News] TSMC Reportedly Develops Panel-Level Packaging, Another New Chip Packaging Tech
• [News] Samsung Reportedly Targets Q4 Trial Production of SiP Glass Substrate, Competing with Intel in the Advanced Packaging Market

(Photo credit: Intel)

As China keeps reducing its reliance on the global semiconductor supply chain with strong support from the authority, two major smartphone manufacturers reportedly claim to have already taped out their own 4nm mobile processors. According to the reports by Liberty Times and Commercial Times, Xiaomi and Unisoc, by using foreign IP cores from ARM and IMG, have successfully taped out domestic 4nm chips.

According to the latest data from TrendForce, Xiaomi (including Xiaomi, Redmi, and Poco) has moved past last year’s high inventory issues, achieving a total production of 41.1 million units in the first quarter and ranking third globally in market share, only after Samsung and Apple. Oppo, Transsion and Vivo are the other three Chinese smartphone brands having made it to the top six regarding global shipments.

Shanghai-based fabless chip firm Unisoc, on the other hand, is specialized in areas including 2G/3G/4G/5G, Wi-Fi, Bluetooth, TV FM, satellite communications and other related technologies, according to its website.

Citing comments from Chinese tech blogger “Oneline Technology,” the reports point out that Xiaomi’s self-developed chip has made a significant leap forward, while the performance of its 4nm chip is similar to that of Huawei’s Kirin 9000s, and is expected to be seen this year. Huawei’s Kirin 9000s is reportedly manufactured by SMIC’s 7nm.

Citing another Chinese blogger, “Fixed Focus Digital,” the reports mention that Unisoc’s 4nm chip has already taped out, achieving performance levels comparable to Qualcomm’s Snapdragon 888.

Regarding the timeline for Chinese domestically produced smartphone SoCs to reach 4nm, the reports, citing industry insiders, state that it is more likely to happen in 2026. For now, MediaTek and Qualcomm still dominate Chinese’s smartphone chip market.

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• Q1 Smartphone Production Increases Due to Low Base Last Year, Expected to Decline 5–10% in Q2, Says TrendForce

(Photo credit: Unisoc)

According to a report from Nikkei citing sources, TSMC is developing a new advanced chip packaging technology that uses rectangular panel-like substrates, rather than the traditional circular wafers currently in use.

This technology allows for more chips to be placed on a single substrate, addressing the future demand trends driven by AI. Although the research is still in its early stages and may take several years to reach mass production, it represents a significant technological shift for TSMC, the report notes.

Reportedly, TSMC is currently experimenting with rectangular substrates measuring 515 mm by 510 mm, providing more than three times the usable area compared to the current 12-inch wafers, and therefore can better suit the demand for AI chipsets.

In response to Nikkei’s inquiry, TSMC stated that the company is closely monitoring advancements and developments in advanced packaging technologies, including panel-level packaging.

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• [News] TSMC Advanced Packaging Crucial for AI Computing Power

(Photo credit: TSMC)