Currently, the global semiconductor industry is entering a new period of transformation. With the rapid development of AI, big data, cloud computing, and other technologies, the demand for high-performance computing chips, optical communication chips, and advanced packaging has surged, and recent reports suggest that prices for these types of chips are increasing.

Advanced Process and Advanced Packaging Products May See Price Increases

According to a recent report by Morgan Stanley, TSMC is considering raising prices for its 3nm process and CoWoS advanced packaging technology in response to soaring market demand. TSMC plans to implement these price increases in 2025, with the cost of its 3nm process potentially rising by up to 5%.

Industry analysts point out that on the demand side, major AI chip manufacturers such as NVIDIA and AMD heavily rely on TSMC’s 3nm process, and the explosive growth in AI technology has driven continuous demand for these chips, contributing to the price increase.

On the supply side, the high research and production costs associated with advanced process technology—including equipment investment, material costs, and R&D personnel—add significant pressure to the supply chain. Multiple factors have led to a tight supply of such chips, further driving up prices.

Additionally, TSMC’s 5nm and 4nm process quotes have increased more than previously anticipated by 4%, with some price hikes reaching as much as 10%.

Reports indicate that TSMC also plans to raise prices for its CoWoS advanced packaging technology, with potential increases between 10% and 20%. High demand for CoWoS from major companies like NVIDIA, AMD, Microsoft, Amazon, and Google has resulted in a shortage of CoWoS packaging capacity, which has driven up prices.

According to TrendForce research, NVIDIA is the primary driver of demand for CoWoS, and with the upcoming launch of its Blackwell series, demand for CoWoS is expected to increase by more than 10 percentage points annually by 2025.

Optical Communication Chip Sector Begins Price Increases

Demand for high-speed, high-bandwidth, and low-latency optical communication is rising, particularly in data centers, enterprise networks, and telecommunications, driving demand in the optical communication chip market. Recently, media reports revealed that Marvell, a major optical communication chip manufacturer, has issued a price increase notice, with its entire product line set to see price hikes starting January 1, 2025. According to TrendForce, Marvell ranked sixth in the global IC design market in 2023.

Industry forecasts predict that, driven by ongoing advances in optical communication technology and expanding applications, the global optical communication chip market will grow rapidly in the coming years.

The development and application of technologies such as silicon photonics, optoelectronic hybrid integration, and high-performance photonic chip materials are expected to bring new growth points and opportunities to the optical communication chip market.

(Photo credit: Marvell)

According to a report from TechNews, the AI boom has significantly boosted the share prices of the “Magnificent Seven”—Apple, Microsoft, Google’s parent company Alphabet, Amazon, NVIDIA, Meta, and Tesla—resulting in a total market value exceeding USD 16 trillion.

Alongside this growth, the report highlighted that the salaries of the CEOs of these companies have also risen. Notably, Microsoft CEO Satya Nadella’s compensation increased by over 60%, reaching an annual total of USD 79.1 million (approximately NTD 2.537 billion).

The Magnificent Seven of the U.S. stock market includes tech giants like Microsoft, Apple, Alphabet, Amazon, Meta, NVIDIA, and Tesla. These companies primarily focus on artificial intelligence, cloud computing, online gaming, and software and hardware technologies. With AI driving market growth, their stock prices have consistently hit record highs, pushing their total market value above USD 16 trillion, according to the report.

Citing statisitcs by the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), the report indicated that Tim Cook, CEO of Apple, ranks first among the CEOs of the Magnificent Seven Stocks. For the fiscal year ending in 2023, Cook’s total compensation amounts to USD 63.2 million, which includes USD 46.9 million in stock awards, USD 10.7 million in non-equity incentive plan compensation, and USD 2.5 million in other compensation, such as security costs and expenses for business and personal travel on private jets.

Microsoft CEO Satya Nadella ranks second with a total compensation of USD 48.5 million for the fiscal year ending in 2023. His compensation is largely tied to Microsoft’s performance. As of December 2023, Nadella owns 800,667 shares of Microsoft Corp. According to the Compensation Committee of the Microsoft Board of Directors, Nadella’s salary is set to reach USD 79.1 million in 2024, reflecting a 63% increase, primarily due to his success in steering Microsoft into the AI sector, as indicated by the report.

The third place goes to NVIDIA CEO Jensen Huang, who received USD 34.2 million in annual compensation, reflecting a 60% increase. This total includes USD 26.7 million in stock awards, USD 4 million in non-equity incentive plan compensation, and USD 2.5 million in other expenses. Thanks to the AI boom, Huang’s net worth has skyrocketed sixfold to USD 125.3 billion in just two years. He has also ranked among the top ten richest people in the world for the first time, as the report pointed out.

The fourth is Meta CEO Mark Zuckerberg. Although his salary is only a symbolic USD 1, he receives USD 24.4 million annually, of which protection fees are as high as USD 23.4 million, including USD 9.4 million in direct security costs, and additional USD 14 million to “cover additional expenses related to the personal safety of Mr. Zuckerberg and his family.”

Fifth is Sundar Pichai, CEO of Alphabet, Google’s parent company, who receives USD 8.8 million annually. This includes a salary of USD 2 million and approximately USD 6.77 million for personal security. However, following several major layoffs at Google, Pichai’s salary has drawn criticism from employees worldwide, making it a controversial topic, as the report pointd out.

The sixth place goes to Amazon CEO Andy Jassy, who receives an annual compensation of USD 1.3 million. This includes a salary of USD 365,000 and a security fee of USD 992,764. When the value of vested shares is included, Jassy’s total compensation for 2023 amounts to approximately USD 29.2 million, as the report mentioned.

The seventh is Tesla CEO Elon Musk. Initially, his extraordinarily high salary of USD 56 billion for 2023 was not approved, resulting in the American Federation of Labor and Congress of Industrial Organizations reporting it as 0. However, during Tesla’s shareholders’ meeting on June 13, a new 10-year compensation package worth USD 44.9 billion was approved.

(Photo credit: NVIDIA)

According to a report from Reuters, the U.S. government is finalizing regulations that will prohibit investments in AI in China, as indicated by a recent government update. The regulation will restrict specific outbound investments to China in areas such as AI, semiconductors, microelectronics, and quantum computing.

According to the report, the rule is currently under review at the Office of Management and Budget, suggesting that it is expected to be released within the next week or so.

The rules will reportedly require U.S. investors to notify the Treasury Department about certain investments in AI and other sensitive technologies in China.

The report highlighted that the rules are based on President Joe Biden’s executive order from August 2023, aimed at safeguarding American knowledge and preventing its application in China’s military advancements.

According to the proposals released last year, the U.S. Treasury Department highlighted that the military, intelligence, surveillance, and cyber-enabled uses of these technologies and products pose risks to U.S. national security, particularly when developed by countries of concern such as the PRC.

Citing former Treasury official Laura Black, the report suggested that the rule is expected to be released before the U.S. election. Black also noted that the Treasury office responsible for overseeing regulations typically allows for a minimum 30-day period before the actual implementation of the rule.

According to the report, the Treasury Department released proposed rules, including some exceptions, and invited public comments in June. Black expected that the final rules will provide further clarity on the scope of coverage for AI and the thresholds for limited partners.

Additionally, the report noted that the proposed exceptions include publicly traded securities such as index funds and mutual funds, along with certain limited partnership investments and specific syndicated debt financings.

Read more

• [News] U.S. Urges South Korea to Tighten Chip Export Controls to China
• [News] China Bypasses Restrictions to Acquire NVIDIA Chips, with Cloud Service Costs Even Lower Than in the U.S.

(Photo credit: istock)

According to a report by Commercial Times, as NVIDIA’s GB200 is set to officially ship by the end of this year and gradually ramping up in 2025, it is anticipated to usher in a new era of liquid cooling.

TrendForce predicts that the liquid cooling penetration will rise from 11% in 2024 to 24% in 2025. This growth is expected to be fueled by advancements in AI, which we may witness in 2025.

The expansion of liquid cooling will benefit several Taiwanese companies, including Delta Electronics, Asia Vital Components, Auras Technology, LOTES, and Fositek.

The growing global awareness of ESG principles, coupled with cloud service providers (CSPs) accelerating the deployment of AI servers and the upcoming official launch of NVIDIA’s Blackwell platform all contribute to the growth of liquid cooling technology, as the report in Commercial Times indicated.

According to the report, the market is optimistic that the significant growth in NVIDIA Blackwell’s penetration will drive a shift from air cooling to liquid cooling solutions.

Currently, the Hopper architecture remains dominant, commanding 90% of the market share this year. On the other hand, Blackwell is projected to capture only 4% of the market by the end of 2024. However, as Blackwell ramps up sales next year, it is expected to replace Hopper and establish itself as the new mainstream.

From the perspective of thermal design power (TDP), NVIDIA’s GB200 NVL72 racks, with a TDP of approximately 140 kW, will require liquid cooling solutions to manage heat dissipation, with Liquid-to-Air (L2A) technology anticipated to become the predominant method.

While immersion cooling is an option, it faces technical challenges that may prevent it from becoming mainstream in the next 3 to 5 years, as the report stated.

The report highlighted that the market price of a single NVL72 rack is 28 times that of a traditional server. As a result, an increasing number of companies are entering and competing in the liquid cooling market.

Currently, for those Taiwanese companies in the supply chain which may benefit from the market opportunities, Asia Vital Components and Cooler Master lead in providing cold plates, while Cooler Master and Auras supply manifolds, and Vertiv and Delta Electronics provide coolant distribution units.

On the other hand, quick disconnect (QD) components are critical for preventing leakage and have frequently been reported as out of stock. Taiwanese companies like LOTES and Fositek are reportedly in the validation phase, and by the first half of 2025, they are expected to join the list of QD suppliers, to compete with major companies such as CPC, Parker Hannifin, Denfoss, and Staubli.

Read more

• Blackwell Platform and ASIC Chip Upgrades to Boost Liquid Cooling Penetration to Over 20% in 2025, Says TrendForce

(Photo credit: NVIDIA)

In light of slow revenue growth in the Chinese market, China’s AI startups are seeking to enter the U.S. market in pursuit of overseas growth opportunities, following the successful model of the short video platform TikTok, according to a report by Commercial Times.

According to a report by the Financial Times, despite U.S. restrictions on chip exports to China, the country still maintains a competitive advantage in launching products like chatbots that do not require substantial computing resources.

The report highlights that Chinese AI companies, including MiniMax, TikTok’s parent company ByteDance, and 01.AI, have introduced AI products overseas, particularly targeting the U.S. market, which boasts a larger base of high-end consumer users.

These Chinese app companies have seen significant success. For instance, the report in Commercial Times points out that the majority of MiniMax’s sales stem from its chatbot application “Talkie,” which has gained immense popularity among American teenagers.

Shanghai-based MiniMax has made major breakthroughs in the past year, and the company plans to reach a sales target of USD 70 million in 2024, Commercial Times notes.

The Financial Times report also highlights that Chinese company ByteDance has launched several AI apps internationally. ByteDance’s photo editing application “Hypic,” along with Zuoyebang’s homework assistant “Question AI,” both made it into the top 20 downloads internationally.

However, according to the Financial Times report, Chinese companies still face certain challenges. Firstly, the opportunities for revenue growth are limited due to the high costs associated with training language models, which can negatively impact the potential of these companies. Additionally, to mitigate external risks, Chinese firms need to take measures such as placing servers outside of China to avoid the potential crisis of TikTok being banned in the United States.