Intel has reportedly retained the export licenses that would have prohibited them from selling laptop processor (CPU) chips to the Chinese telecommunications giant Huawei. This signifies that Intel has temporarily preserved its business of providing chips worth hundreds of millions of dollars to Huawei.

According to sources cited by Reuters on March 12th, the US placed Huawei on a trade blacklist in 2019, alleging violations of US sanctions. However, at the end of 2020, the US Department of Commerce granted special licenses to some US suppliers, including Intel, allowing them to sell certain technology products to Huawei.

Still, some sources cited in the report believe that Intel’s license is expected to expire later this year and is unlikely to be renewed.

The sources cited in the same report also stated that Intel’s competitor, AMD, had applied for a similar license to sell comparable chips in early 2021 but did not receive approval from the US Department of Commerce. AMD subsequently protested, claiming that the US government’s differential treatment was unfair.

Regarding this matter, Intel, Huawei, the Commerce Department and the White House declined to comment. AMD did not respond to a request for comment.

As per TrendForce, Intel is forecasted to hold a market share of 68.8% in the CPU market in 2024, while AMD is expected to have a share of 20.2%.

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• [News] China’s Third Big Fund Reportedly Set to Inject USD 27 Billion to Counter US Chip Restrictions
• [News] Huawei Shifts Focus, Prioritizing Production of AI Chips over Mate 60 Series

(Photo credit: iStock)

With the rising demand in the memory market and Chinese memory companies actively preparing for competition, a report from TechNews indicates that Zhou Meisheng, formerly the assistant to SMIC’s co-CEO Liang Mengsong, has joined ChangXin Memory Technology (CXMT) as the head of the Technical Research and Development Center, attracting attention.

Zhou Meisheng has previously served as the CTO of Lam Research in China, a global research and development equipment technology company. Before that, she held positions in various semiconductor companies, including Chartered Semiconductor (Singapore), UMC, and GlobalFoundries.

Starting in 2017, she served as the Executive Vice President of R&D at SMIC, directly reporting to co-CEO Liang Mengsong. She played a crucial role as Liang Mengsong’s key assistant in driving SMIC’s advanced process initiatives. In 2022, Zhou Meisheng retired, resigning from all positions at SMIC, sparking speculation.

The technology of CXMT continues to make breakthroughs, and by the end of 2023, the official website of CXMT announced the development of China’s first LPDDR5 DRAM chip. They introduced a series of LPDDR5 products, including 12GB LPDDR5, 12GB LPDDR5 with POP packaging, and 6GB LPDDR5 with DSC packaging.

LPDDR5 represents the fifth generation of low-power DRAM, and compared to the previous LPDDR4X, the new LPDDR4X has a 50% increase in capacity and speed, reaching 12GB capacity, a data transfer rate of 6,400Mbps, and a 30% reduction in power consumption.

In fact, CXMT’s main competitor Samsung announced the mass production of 12GB LPDDR5 mobile DRAM in July 2019, while Micron supplied LPDDR5 DRAM with capacities of 6GB, 8GB, and 12GB in February 2020. SK Hynix, on the other hand, announced the mass production of 18GB LPDDR5 mobile DRAM in August 2021. Therefore, considering the timeline, there’s an approximate four-year technology gap between CXMT and other global giants.

As for the DRAM market, it currently remains highly concentrated, dominated by key players such as Samsung Electronics, SK Hynix, and Micron Technology, collectively holding over 96% of the entire market share.

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• [News] SMIC’s Net Profit Halved Last Year, Faces Further Reductions This Year
• [News] CXMT’s LPDDR5 Release Fuels in Chinese Memory Market, Spotlight Progress of Global Memory Giants

(Photo credit: CXMT)

China is reportedly in the process of establishing its third-phase of its big fund, with plans to inject USD 27 billion in funding aimed at supporting top-tier technology development, as per Bloomberg’s report. The goal is said to be enhancing China’s semiconductor self-sufficiency and overcoming export restriction measures imposed by the United States.

According to Bloomberg, the funding for the third phase of Big Fund primarily originates from local governments, state-owned enterprises, and their investment branches, with relatively smaller contributions from the central government. This aligns with China’s strategic focus on concentrating resources to support the development of key technologies.

The initial round of financing for the third phase of Big Fund aims to raise USD 27 billion, which, in the context of China’s semiconductor industry standards, is a relatively modest amount. The fund will directly support local companies and finance three to four sub-funds, diversifying transaction sources and investment strategies.

The National Integrated Circuit Industry Investment Fund, commonly referred to as the “Big Fund,” originated from the Chinese State Council’s “Outline for the Promotion of National Integrated Circuit Industry Development” issued in June 2014. Its ultimate goal is to bring China’s semiconductor industry up to international standards by 2030 and nurture a group of companies to become international Tier 1 suppliers.

As early as September of 2023, the second phase of the Big Fund initiated a round of financing, raising USD 41 billion to support local fab equipment manufacturers. As for the third phase of the Big Fund, this USD 27 billion will be allocated to critical projects across various regions in China.

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• [News] US Government Considers Adding ChangXin Memory Technologies to Entity List, Imposing Further Sanctions on Chinese Firms
• [News] Big Fund II Infuses HLMC with an Additional USD 1 Billion, Potentially Eyeing on More Advanced Processes

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According to sources cited in Bloomberg’s report, the US government is considering imposing sanctions on Chinese technology firms, including ChangXin Memory Technologies (CXMT), in its latest move against China’s advanced semiconductor sector.

The same report has pointed out that the US Department of Commerce’s Bureau of Industry and Security (BIS) is currently considering including CXMT in the Entity List, which would restrict the listed companies’ access to US technology. Apart from CXMT, US officials are also contemplating restrictions on five other Chinese companies, though the final list has yet to be confirmed.

Regarding this matter, the BIS and White House National Security Council declined to comment.

CXMT is a major Chinese DRAM manufacturer whose products include chips applicable in computer servers, smart vehicles, and other devices. Its primary competitors include Micron, Samsung Electronics, and SK Hynix. Micron.

The recent actions by the US government reportedly stem from Huawei’s breakthrough last year in circumventing US restrictions to acquire advanced process chips, specifically obtaining chips using the 7-nanometer process from SMIC (Semiconductor Manufacturing International Corporation). This allowed Huawei to make a comeback in the 5G smartphone market, prompting concerns and responses from the US government.

Gina Raimondo, the US Secretary of Commerce, has responded by stating that the US will take “as strong and effective action as possible” to uphold national security interests.

Currently, companies that have been listed on the Entity List by the US Department of Commerce include Huawei, SMIC (Semiconductor Manufacturing International Corporation), and Shanghai Micro Electronics. Additionally, China’s other major memory manufacturer, Yangtze Memory Technology Corp, was added to this restriction list in 2022.

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• [News] Bypassing U.S. Restrictions? CXMT Showcases GAA Technology for 3nm Chips
• DRAM Industry Sees Nearly 30% Revenue Growth in 4Q23 Due to Rising Prices and Volume, Says TrendForce

(Photo credit: CXMT)

Geopolitical factors are driving countries to actively establish semiconductor manufacturing locally and offer subsidies. According to TSMC’s annual report, subsidies received from Japan and China amounted to NTD 47.545 billion in 2023, signaling a 5.74-fold increase from the previous year, reaching a record high. In contrast, the report also suggest the subsidies from the US government have yet to materialize.

TSMC did not specify the individual amounts of subsidies from the Japanese and Chinese governments. However, estimations cited by the report suggest that the Japanese government, aiming to revitalize the semiconductor industry, subsidized TSMC’s Kumamoto plant with up to JPY 476 billion, likely serving as the primary driver behind the substantial increase in TSMC’s subsidies in 2023.

The construction of TSMC’s Kumamoto Fab began in April 2022, with full assistance from the Japanese central and local governments. Recently, the opening ceremony was held, and trial production has commenced, with mass production expected in the fourth quarter of this year.

The subsidies from the Japanese and Chinese governments to TSMC are mainly used to subsidize the costs of real estate, buildings, and equipment purchases, as well as some of the costs and expenses associated with building construction and production operations.

On the other hand, TSMC’s US fab began construction in early 2021, with a grand tool-in ceremony held in December 2022, attended by the US President. Initially planned to invest USD 12 billion, the facility aims to build a N5 process fab with a monthly capacity of 20,000 wafers. Construction was scheduled to commence in 2021, with mass production slated to begin by the end of 2024, creating approximately 1,600 job opportunities in the local area.

However, it was previously reported by the TechNews that due to the delay in the first phase’s production timeline from the end of 2024 to the first half of 2025, the production schedule for the second phase will also be postponed to start after 2027. Subsequently, the production schedule has been pushed from this year to next year.

Despite the US government’s declaration to reinvigorate manufacturing and the introduction of the “CHIPS Act,” totaling USD 52 billion in subsidies, only three US companies have been subsidized so far.

These include BAE Systems, Microchip, and the third-largest foundry, Global Foundries, with Global Foundries receiving the most substantial subsidy of USD 1.5 billion. As of now, subsidies for TSMC have yet to be finalized.

• [News] TSMC’s Kumamoto Plant – Semiconductor Bubble or Once-in-a-Century Opportunity?
• [News] Latest Overview on TSMC’s Global Expansion Initiatives

(Photo credit: TSMC)