Taiwan’s semiconductor giant, TSMC, faces overwhelming demand for its 3nm technology, with major clients like Apple and NVIDIA fully allocate its production capacity.

According to a report from Commercial Times, orders are expected to be filled through 2026. Reportedly, TSMC is planning to raise its 3nm prices by over 5%, and advanced packaging prices are anticipated to increase by approximately 10% to 20% next year.

The members of TSMC’s 3nm family include N3, N3E, N3P, as well as N3X and N3A. As the existing N3 technology continues to be upgraded, N3E, which began mass production in the fourth quarter of last year, targets applications such as AI accelerators, high-end smartphones, and data centers.

N3P is scheduled for mass production in the second half of this year and is expected to become mainstream for applications in mobile devices, consumer products, base stations, and networking through 2026. N3X and N3A are customized for high-performance computing and automotive clients.

Source: TSMC

Per the industry sources cited by the same report, TSMC’s Zhunan advanced packaging plant (AP6), operational for a year now, has become Taiwan’s largest CoWoS base with the equipment moved into its AP6C plant. In the third quarter, CoWoS monthly production capacity is expected to double from 17,000 to 33,000 wafers.

Industry sources cited by the report further suggests that while AI accelerators do not use the most cutting-edge manufacturing processes, they rely heavily on advanced packaging technology. The ability of global semiconductor companies to secure more advanced packaging capacity from TSMC will determine their market penetration and control.

TSMC’s advanced packaging capacity is scarce, with primary customer NVIDIA having the highest demand, occupying about half of the capacity, followed closely by AMD. Broadcom, Amazon, and Marvell have also expressed strong interest in using advanced packaging processes. With gross margins close to 80%, NVIDIA is said to agree to price increases to secure more advanced packaging capacity, thereby distancing itself from competitors.

Previously, NVIDIA CEO Jensen Huang emphasized that TSMC is not just manufacturing wafers but also handling numerous supply chain issues. He also agreed that the current pricing is too low and would support TSMC’s price increase actions.

The industry sources cited by Commercial Times have indicated that TSMC plans to add CoWoS-related equipment by the third quarter and has requested equipment manufacturers to dispatch more engineers to fully staff its Longtan AP3, Zhunan AP6, and Central Taiwan Science Park AP5 plants.

In addition to Zhunan’s AP6C, the Central Taiwan Science Park plant, which originally only handled the latter stages of oS, will also gradually transition to CoW processes. Meanwhile, the Chiayi site is in the land preparation stage and is expected to progress faster than Tongluo.

Reportedly, industry sources further reveal that the prices for advanced process nodes such as 3nm and 5nm will also be adjusted. Particularly, strong demand for 3nm orders in the second half of the year is expected to drive utilization rates to near full capacity, extending through 2025. The 5nm process is experiencing similar demand dynamics, driven by AI needs.

Read more

• [News] Major Clients Reportedly Fully Allocate TSMC’s Production Capacity Until 2026, 3nm Process in High Demand
• [News] NVIDIA CEO Jensen Huang Supports C.C. Wei’s Theory and Backs for TSMC to Increase Price

(Photo credit: TSMC)

Looking at next-generation networks, a range of emerging technologies are playing pivotal roles. From ground-based B5G (Beyond 5G)/6G, Wi-Fi 7, and fixed wireless access (FWA), to non-terrestrial networks (NTNs) like low-orbit satellites, Taiwan-based companies are actively involved in shaping these developments. Going forward, the telecom sector is poised to see the integration of a new generation of terrestrial networks and satellite communication systems. This will ensure seamless wireless coverage across land, sea, and air. With Taiwan’s robust ICT industry playing a vital role, the forthcoming era of AI-enabled smart network promises boundless possibilities.

Involved in Establishing Industry Standards from the Beginning, Taiwan-Based Companies Have a Head Start in the Race for the 6G Technology

As new equipment for next-generation networks is being introduced to the market, the telecom sector widely anticipates that 2023 will herald the arrival of the 6G era. Many companies involved in this sector have also initiated their own 6G deployment strategies ahead of time. The scale of the 6G market is forecasted to exceed USD 40 billion in 2030, and the corresponding CAGR from 2023 to 2030 is projected to be 34.2%.

B5G/6G builds on the foundation of three major characteristics and usage scenarios of 5G: enhanced mobile broadband (eMMB), ultra-reliable low-latency communication (uRLLC), and massive machine-type communication (mMTC). Compared with 5G, B5G/6G promises communication speeds 10 to 100 times faster than 5G, with peak speeds reaching up to 1Tbps. Its latency is set to be just one-tenth of 5G, and its device connectivity is greater than that of 5G by 10 times. “The ITU-R Framework for IMT-2030” released by the Radio Communication Sector of the International Telecommunication Union (ITU-R) in June 2023, outlined three emerging usage scenarios for 6G: integration of sensing and communication, integration of AI and communication, and ubiquitous connectivity.

Analysts at TrendForce state that apart from having higher speed and lower latency, another prominent feature of 6G is its support for terahertz communication. This means that 6G will encompass not only existing ground-based networks as in previous generations but also low Earth orbit (LEO) satellites. Such integration will provide even more comprehensive network coverage. Moreover, 6G is closely intertwined with advanced sensing and AI functionalities, allowing for unprecedented optimization in end-to-end network performance, power consumption, and AI-enabled applications.

Unlike 5G, which mainly operates in the millimeter-wave frequency range (i.e., 24~71GHz), B5G/6G is going to bring about a significant advancement of utilizing higher-frequency millimeter-wave (mmWave) bands (i.e., 71~92GHz) and sub-terahertz (sub-THz) bands (i.e., 92~300GHz). It should be noted that terahertz bands (300GHz~3THz) are not a major focus in the development of 6G at the current stage.

In June 2023, 3GPP held its 100th member meeting in Taiwan, and local ICT companies that attended this event include MediaTek, Chunghwa Telecom, Foxconn, ASUS, Taiwan Mobile, Far EasTone, HTC, Quanta, Pegatron, Auden Techno, Rapidtek, and Askey Computer. Together, 3GPP and Taiwan-based companies are driving the advancement of 6G, and this collaboration will help Taiwan secure an influential position in the global telecom sector with respect to the development and market deployment of critical technologies.

With 2030 anticipated to be the inaugural year for 6G, many leading ICT companies have formulated forward-looking strategies. At this year’s Mobile World Congress (MWC 2024), Qualcomm unveiled the world’s first prototype of Giga-MIMO antennas designed to operate in the 13GHz band, thereby meeting the higher capacity needs of the upcoming 6G era.

Recently, South Korea’s SK Telecom has partnered with Intel to develop “Inline Service Mesh,” capable of reducing latency in 6G backbone networks by 70% and boosting service efficiency by 33%. SK Telecom has also joined forces with Nokia and NTT Docomo to expand the scope of testing and validation for “6G AI-Native Air Interface (AI-AI),” which can contribute to further improvements in the performance and energy efficiency of networks.

With a World-class ICT Industry, Taiwan Occupies a Crucial Position in the Supply Chain for FWA-related Products

With the easing of the COVID-19 pandemic, many governments around the world are rolling out broadband subsidy schemes to address the issue of the digital divide. In addition to optical fiber infrastructure, FWA is also expected to play a vital role in rapidly expanding broadband access as it can provide fixed network services through mobile networks. FWA has the advantages of being highly cost-effective and eliminating the deployment of cables. Therefore, it offers the greatest benefit for remote rural communities where network connection costs are high, as well as countries with low broadband penetration rates.

Presently, the US is leading the adoption of FWA, followed by Europe. Since many countries have strict regulations concerning the preservation of historical buildings and other kinds of landmarks, local telecom companies have to devise network deployment methods that do not damage or modify building structures or local environments. Moreover, emerging countries, too, are actively investing in the build-out of FWA infrastructure. Examples include the Philippines, India, Vietnam, Indonesia, Mexico, South Africa, and countries in the Middle East.

TrendForce estimates that the shipment volume of 5G FWA equipment reached approximately 7.6 million units in 2022, marking a 111% year-on-year increase. The projected shipment volumes for 2023, 2024, and 2025 are 13 million units, 18 million units, and 22.5 million units respectively, with the corresponding year-on-year growth rates coming to 71%, 38%, and 25%. Additionally, research from Ericsson indicates that by the end of 2021, the number of FWA connections was nearly 90 million. This figure is expected to triple to around 230 million by 2027.

Taiwan has emerged as a global supply hub for FWA-related products, boasting the world’s most comprehensive and technologically mature industry chain for networking equipment, optical fiber communication equipment, and semiconductor components. Examples of notable suppliers for telecommunication equipment include Sercomm, Alpha Networks, ZYXEL, Gemtek, WNC, Askey Computer, Arcadyan, and Hitron Technologies. As for Taiwan-based suppliers for products related to fiber optic communication, they include Landmark Optoelectronics, PCL-KY, Apogee, Truelight, and Luxnet. Turning to suppliers for semiconductor components purposed for networking applications, Taiwan’s MediaTek has long been a major player. Altogether, these companies are expected to sustain impressive performance.

Local Team Is Being Formed for the Development of LEO Satellites

The Russia-Ukraine military conflict, now entering its third year, has highlighted SpaceX’s Starlink as a critical communication technology, sustaining uninterrupted communication links among various units of the Ukrainian armed forces. The conflict has greatly bolstered the reputation of Starlink and reignited the world’s interest in LEO satellites. As early as May 21st, 2021, Taiwan’s Executive Yuan approved a plan to promote the development of the “six core strategic industries,” including the aerospace sector. The plan prioritizes the development of LEO satellites and related ground equipment. Now, Taiwan’s government has provided additional funding of over TWD 40 billion into the field of LEO satellites. Specifically, the government supports the manufacturing of satellites, establishment of a local launch site, and cultivation of industry professionals.

During the 2023 Taipei Aerospace & Defense Technology Exhibition, Wu Jong-shinn, Director General of the Taiwan Space Agency (TASA), announced that Taiwan had initiated its program for the development of orbital launch vehicles. The program aims to launch a 200-kilogram satellite into low Earth orbit by 2023, at altitudes ranging from 500 to 2,000 kilometers above the Earth’s surface. Moreover, TASA plans to launch Taiwan’s first LEO satellite to support the B5G network in 2026. TRITON (FORMOSAT-7R), Taiwan’s first satellite with 83% of its parts locally sourced, was successfully launched in October 2023. This event represents an important milestone in the development of Taiwan’s aerospace sector and the related supply chain.

The introduction of LEO satellite communication into the consumer market can be traced back to February 2023 when MediaTek showcased the world’s first 5G satellite communication smartphone at MWC. Additionally, Huawei’s Mate 60 and Apple’s iPhone 14 and Apple Watch Series 8, released in the same year, all feature support for satellite communication. However, the related functionality is limited to either sending emergency messages or SOS emergency services. Nevertheless, AST SpaceMobile subsequently launched the BlueWalker 3 in September 2023, thereby establishing the world’s first “direct-to-cell” mobile broadband network. With the integration of terrestrial and non-terrestrial communication technologies under 6G, people will be able to access internet connection everywhere.

Taiwan Is Building the Most Competitive Industry Chain for Wi-Fi 7 so as to Seize Future Demand

Currently, Wi-Fi 6/6E still dominates the wireless network market. However, with the Wi-Fi Alliance releasing Wi-Fi CERTIFIED 7, MediaTek has established a coalition for the creation of a related testing and certification platform. Specifically, MediaTek is assisting its partners such as ASUS, BUFFALO, Hisense, Lenovo, TCL, TP-Link, and others in launching various kinds of devices that support the Wi-Fi 7 standard.

The market outlook for Wi-Fi 7 is bright as this new standard brings significant improvements in terms of transmission speed and latency reduction. Apart from being 4.8 times faster than Wi-Fi 6/6E, Wi-Fi 7 has important new features such as multi-link operation (MLO) and multi-resource units that meet the performance demands from various services and applications (i.e., “ultra” with respect to high transmission speed, low latency, and high reliability). Moreover, compared to upgrades between previous generations, there is strong confidence within the market that Wi-Fi 7 will rapidly attain widespread adoption and a higher penetration rate.

In the market for Wi-Fi chips, competition for dominance in the Wi-Fi 7 segment has been heating up since Qualcomm launched the FastConnect 7800, the world’s first Wi-Fi 7 chip, in February 2022. While many chip suppliers are still developing the first generation of Wi-Fi 7 chips, market leader Broadcom sought to outdistance its competitors by launching its second-generation Wi-Fi solutions in June 2023. Broadcom’s second-generation Wi-Fi 7 APs include the BCM6765 for residential networking equipment and the BCM47722 for commercial networking equipment.

Following suit, Qualcomm also unveiled its second-generation Wi-Fi 7 chip, the FastConnect 7900, on February 26th of this year. Designed for smartphones, the FastConnect 7900 is the industry’s first solution with a built-in AI engine and is scheduled to hit the market in the second half of this year. Meanwhile, Intel has introduced the BE200, a Wi-Fi 7 module designed for integration with the motherboard of a desktop or laptop PC. Currently, wireless networking cards with the BE200 are now available for purchase.

Moreover, various kinds of products and components containing Realtek’s Wi-Fi chips have been released into the market as well. They include Acer’s laptops, Azure Wave’s wireless modules, RichWave’s RF ICs, VPEC’s power amplifier, and networking equipment from WNC, Sercomm, and Senao Networks. Shipments of these end products have been gradually ramping up. All in all, with a plethora of new products hitting the market, 2024 can be regarded as the inaugural year for Wi-Fi 7.

TrendForce’s research indicates that after a downturn in 2023, the global market for Wi-Fi chips is projected to reach USD 20.9 billion in 2024, with a year-on-year growth rate of 6.1%. The market is expected to expand further to USD 21.9 billion in 2025, with a year-on-year growth rate of 4.8%. Regarding the market penetration of Wi-Fi 7, devices adhering to this standard accounted for just 1% of total shipments worldwide in 2023. By 2024, this share is expected to increase to 8%; and by 2025, it is forecasted to grow to 18%. According to Wi-Fi Alliance projections, the number of devices with Wi-Fi 7 will surpass 233 million in 2024; and by 2028, the total number of Wi-Fi 7 products across all categories will surpass 2.1 billion.

Join the AI grand event at Computex 2024, alongside CEOs from AMD, Intel, Qualcomm, and ARM. Discover more about this expo! https://bit.ly/44Gm0pK

(Photo credit: Sercomm)

Amid NVIDIA’s leadership in the AI wave, demand for CoWoS (Chip-on-Wafer-on-Substrate) has tripled, driving TSMC to aggressively expand CoWoS capacity, with a corresponding surge in demand for System-in-Integrated-Circuit (SoIC) solutions.

According to a report from MoneyDJ citing industry sources, it has suggested that in addition to AMD, which has already implemented SoIC in production, Apple is conducting limited trial production. Furthermore, collaborations are underway with NVIDIA and Broadcom, indicating that SoIC is poised to become TSMC’s next advanced packaging solution following CoWoS.

TSMC’s SoIC is the industry’s first high-density 3D chip stacking technology, enabling heterogeneous integration of chips with different sizes, functionalities, and nodes using Chip on Wafer packaging. Currently, production takes place at the AP6 assembly and testing facility in Zhunan, Taiwan. It’s rumored that the planned advanced packaging facility in Chiayi, Taiwan will include not only two CoWoS plants but also an SoIC facility.

AMD is the first customer to adopt SoIC technology, with its latest MI300 chip using SoIC combined with CoWoS solution. Apple, TSMC’s primary customer, is reportedly interested in SoIC and plans to incorporate it with Hybrid molding technology for Mac products. Small-scale trials are currently underway, with mass production anticipated between 2025 and 2026. NVIDIA and Broadcom are also collaborating in this field.

As per the same report citing industry sources, the SoIC technology is still in its early stages, with monthly production capacity expected to reach around 2,000 wafers by the end of this year. There are prospects for this capacity to double this year and potentially exceed 10,000 wafers by 2027.

With support from major players like AMD, Apple, and NVIDIA, TSMC’s expansion in SoIC is viewed as confident, securing future orders for high-end chip manufacturing and advanced packaging.

Read more

• [News] TSMC Reportedly Sensing Increased Orders Again, CoWoS Production Capacity Surges
• [News] TSMC’s SoIC Demand Heats Up, Reports Suggest Significant Capacity Expansion

(Photo credit: TSMC)

According to a news report from Economy Daily News, Taiwanese IC design company MediaTek is benefiting from a rebound of the smartphone market, with shipments of its Dimensity series 5G smartphone chips gaining momentum. Simultaneously, there is positive news of a potential surge in the demand for WiFi products next year.

MediaTek has secured major contracts for WiFi 7 with leading global tablet brands, Intel’s laptop platforms, and various prominent smartphone manufacturers, breaking Broadcom’s long-standing dominance in the WiFi chip market.

Industry sources suggest that MediaTek is expected to further expand its reach next year by securing orders from Chinese smartphone brands, Intel’s laptop platforms, and the primary WiFi 7 chip orders from the leading global tablet brand from the US.

With shipment momentum entering a quarterly ascending stage, MediaTek is poised to break the past trend of Broadcom’s long-term dominance in the WiFi chip market. Additionally, MediaTek is gaining ground on its competitor Qualcomm, positioning itself as one of the top three global suppliers in the WiFi chip market.

MediaTek has refrained from commenting on customer specifics and order status. However, market expectations are high for a significant boom in WiFi 7 opportunities next year, and MediaTek is anticipated to benefit from this surge.

According to industry analysis, WiFi 7 boasts faster transmission speeds and additional frequency bands. Its theoretical speed is 4.8 times faster than the preceding WiFi 6 standard and 13 times faster than WiFi 5. The industry widely anticipates WiFi 7 to become the mainstream network transmission standard next year.

In the current PC market scenario, major PC suppliers such as Intel and AMD are almost certain to extensively support WiFi 7 next year. In the smartphone market, there are reports that Apple and Samsung are expected to incorporate WiFi 7 specifications in their new models next year, further propelling the explosion of WiFi 7 opportunities in the coming year.

In the past, MediaTek made relatively slow progress in the WiFi market, but it accelerated its efforts upon entering the WiFi 6 era. With ambitions to outpace competitors in WiFi 7, MediaTek reportedly expanded its R&D team, deploying a thousand personnel to delve into the WiFi 7 market.

In early 2022, MediaTek took an early lead by launching its WiFi 7 product line, entering the ‘design-in’ phase with clients. In the second quarter of 2023, reports suggest MediaTek is gradually making inroads into the high-end router and enterprise-related applications. These recent developments indicate positive strides for the company.

Industry analysts have emphasized that WiFi has become an essential network feature in current terminal devices. However, due to the need for integration supporting multiple frequency band specifications in network chips like WiFi and Bluetooth, the crucial point in verifying product usability lies in complying with frequency bands specified by various countries.

Since different countries use different frequency bands, a significant amount of manpower is required in the testing and verification stages. The development challenges associated with these chips are second only to modem chips.

Even Apple has reportedly delayed its in-house WiFi chip development due to a shortage of manpower. Instead, Apple has shifted its focus to procuring WiFi chips from other IC design companies. This opens up opportunities for Broadcom, Qualcomm, and MediaTek to secure significant orders for WiFi chips in Apple devices like iPhones, iPads, and MacBooks.

Reportedly, an insider has indicated that MediaTek’s WiFi 7 chips will be produced using TSMC’s 6nm process. It is anticipated that the wafer input for these chips will ramp up in the first half of 2024 as MediaTek will be gearing up to seize new opportunities in the latter half of that year when consumer devices will have widely adopted WiFi 7.

(Photo credit: MediaTek)

After obtaining approval from Chinese regulatory authorities at the end of November, Broadcom, a leading IC design company, has officially completed the acquisition of VMware, a prominent player in cloud computing. This strategic move propels Broadcom into the competitive cloud market, with software becoming a substantial part of its revenue. This trend of IC design companies, including AMD, Qualcomm, and Nvidia, venturing into software acquisitions continues to reshape the industry landscape.

Broadcom announced the acquisition of VMware on May 26, 2022, through a cash and stock transaction valued at USD 61 billion. After obtaining approvals from global regulatory authorities, including the EU, UK, South Korea, and Japan, the final conditional clearance from Chinese authorities was secured. This clearance involved ensuring compatibility between VMware server software and Broadcom hardware competitors’ products. The official announcement of completion came on November 22, 2023, following approval from Chinese authority. The final total transaction value came to USD 69 billion.

VMware, known for its expertise in cloud computing and virtualization software, separated from Dell in late 2021. With a customer base exceeding 400,000, it competes with Nutanix and Cloud Software Group. VMware’s core service lies in multi-cloud management, streamlining the integration of cloud resources from various vendors. It enables customers to manage multiple public clouds on a unified platform. The VMware platform significantly reduces the time needed for data migration to different public clouds, from 45 months to approximately 2.5 months.

Broadcom’s Software Business Soars to 40-45% Share after Acquisition, Ventures into Cloud and AI Markets

In 2023, VMware is expected to dominate the server virtualization market with a market share exceeding 70%. VMware’s strategic plan involves increasing the sales share of subscription services and cloud services from 25% in 2021 to 40% by 2025. With Q2 2023 revenue of USD 3.41 billion, almost double the size of Broadcom’s software business, the merger positions Broadcom’s software business to account for 40-45% of the total revenue.

This May, Broadcom CEO Tan Hock Eeng publicity stated that his company is committed to an annual investment of USD 2 billion in VMware’s R&D. Following the acquisition, Broadcom’s software division will be rebranded as VMware, and a shift from perpetual software licenses to subscription and SaaS models is planned. Broadcom aims to increase VMware’s EBITDA from USD4.7 billion in the 2022 fiscal year to USD 8.5 billion within three years.

Besides Broadcom’s entry into the cloud market through VMware, TrendForce also highlights VMware’s significance as a key partner for NVIDIA. The expanded strategic partnership, announced in August 2023, resulted in the establishment of Private AI Foundation with NVIDIA. Built on the VMware Cloud Foundation, the Private AI Foundation is a platform that allows enterprises to customize models and deploy Generative AI applications. The acquisition positions Broadcom to tap into NVIDIA’s AI ecosystem, providing an opportunity to join the NVIDIA AI server supply chain and explore the immense potential brought by AI.

Tech Giants Embrace Ecosystem Competition as IC Design Firms Dive into the Software Industry

To enhance customer loyalty, major companies including Apple, Microsoft, Google, have progressively taken part in ecosystem competition in recent years. These companies have successfully established robust ecosystems. At the same time, IC design companies are gradually venturing into the software industry, shifting the focus from mergers within the IC design sector to mergers in the software industry. In addition to Broadcom acquiring VMware, notable instances in 2022 include AMD’s acquisition of data center platform provider Pensando, Qualcomm’s purchase of automotive software companies Veoneer and Arriver, and NVIDIA’s takeover of software-defined storage(SDS) company Excelero.

For Broadcom, strategic acquisitions have been a recurring theme since the failed attempt to acquire Qualcomm in 2018, after former U.S. President Donald Trump blocked it with national security concerns. Notable acquisitions include the USD18.9 billion purchase of mainframe service company CA Technologies in 2018, the USD 10.7 billion acquisition of the security division of Symantec in 2019, and the unsuccessful attempt to acquire statistical analysis software company SAS Institute for USD15-20 billion in 2021.

Buying software companies provides Broadcom with the advantage of leveraging cross-selling. This enables the promotion of its products, such as compute offload business, server storage connectivity, fiber optics, Jericho routers, and Tomahawk switches, to enterprise customers adopting solutions from these software companies.

(Image: Broadcom)