Lithography machine giant ASML released its financial report for the second quarter of 2024, with net sales amounting to EUR 6.2 billion and net income reaching EUR 1.6 billion. The gross margin was 51.5%.

According to the previous financial forecast, net sales for the second quarter were expected to be between EUR 5.7 and 6.2 billion, with a gross margin of 50% to 51%, making the overall performance for the second quarter slightly better than expected.

Additionally, with the continued increase in demand for AI chips, the order intake for the second quarter was EUR 5.6 billion, significantly up from EUR 3.61 billion in the first quarter, returning to the levels of the fourth quarter of 2023. It is also worth noting that in the order intake for the second quarter, EUR 2.5 billion were EUV orders.

This performance was said to be due to the strong sales of immersion DUV systems. ASML President and CEO Christophe Fouquet noted ongoing improvements in overall semiconductor inventory and further increased utilization rates of lithography equipment by logic and memory chip customers. Despite market uncertainties, ASML anticipates continued industry recovery in the second half of the year.

Fouquet also projected third-quarter net sales for 2024 to range between EUR 6.7 and 7.3 billion, with a gross margin of 50% to 51%. Estimated R&D investments are around EUR 1.1 billion, and sales and general administrative expenses (SG&A) are expected to be approximately EUR 295 million.

ASML reportedly regards 2024 as a transitional year, maintaining unchanged full-year expectations and continuing to invest in capacity and technology enhancements. Additionally, strong developments in AI are driving much of the semiconductor industry’s recovery and growth, positioning it ahead of other markets.

Read more

• [News] ASML Projects Strong Demand Until 2026, New EUV Shipments Reportedly to TSMC
• [News] ASML Reports China Accounts for 49% of Q1 Total Sales and 20% of Backlog Orders

(Photo credit: ASML)

According to a report from Wccftech, Huawei’s Kirin 9100 processor is scheduled to be unveiled later this year, rumored to be manufactured using SMIC’s 5nm process. Its performance is reported to surpass that of the Qualcomm Snapdragon 8 Gen 2, and it will be featured in the entire Mate 70 series of smartphones.

The same report cited industry sources, suggesting that SMIC has successfully produced 5nm chips using DUV lithography instead of EUV, which is typically required for 5nm production. The high cost and low yield of DUV make it a challenging feat for most manufacturers. Fortunately, this breakthrough could help Huawei narrow the performance gap in its processors.

Reportedly, the Kirin 9100 is rumored to outperform the Snapdragon 8 Gen 2 overall and offer interface smoothness comparable to the Snapdragon 8 Gen 3. Huawei’s software optimization is anticipated to contribute significantly, as the company plans to launch HarmonyOS NEXT this year, completely moving away from the Google Android framework.

The report notd that switching to HarmonyOS NEXT has advantages, including memory usage that is three times more efficient than Android, and stringent resource consumption management. The new system can also be installed on older Huawei smartphones with previous-generation Kirin processors. Thanks to the 5nm process, the Kirin 9100 will also have improved energy efficiency. However, the actual performance will need to be verified once Huawei releases more detailed information.

Read more

• [News] Huawei’s HarmonyOS Project Ready to Hit the Road with Increasing Participation from Chinese Enterprises
• [News] Huawei’s Self-developed AI Chip Challenges NVIDIA, Boasting Its Ascend 910B to Be Equal in Match With A100

(Photo credit: Huawei)

According to South Korean media The Elec’s report, due to strong demand from Chinese chip manufacturers and wafer foundries, the shortage of photomasks in the market has not eased, and it is anticipated that prices will rise in 2024.

The report notes that most photomask manufacturers, including Japan’s Toppan, DaiNippon Printing, and the U.S.’s Photronics, are currently operating at full capacity with a utilization rate of 100%. Some Chinese chip companies are even willing to pay additional fees to expedite delivery schedules.

In the field of integrated circuits, the function of a photomask is similar to the “film” in a traditional camera. With the collaboration of exposure and development processes in photolithography machines and photoresist, the pre-designed patterns on the photomask are transferred to the photoresist on the substrate, enabling mass production through image replication.

Photomasks play an indispensable role in the semiconductor chip manufacturing process, especially in advanced processes where more intricate circuit patterns require multiple layers of photomasks to aid production. For example, mature processes may require around 30 photomasks, while the latest advanced processes might demand as many as 70 to 80 photomasks to handle.

Currently, Chinese foundry giant SMIC employs Deep Ultraviolet (DUV) technology to produce 7nm chips. Compared to Extreme Ultraviolet (EUV), DUV requires more photomasks for the fabrication of multiple circuit patterns.

Toppan Printing, in its latest quarterly financial report covering July to September, anticipates a continual increase in demand for photomasks throughout 2023. DaiNippon Printing expressed agreement with this assessment in its half-year financial report for the period from April to September.

The graphic dimensions, precision, and manufacturing technology requirements of semiconductor photomasks continue to increase, with only a 3% domestication rate for high-end photomask versions in China. In the preparation of photomasks, the Chinese semiconductor photomask industry faces a situation where high-end equipment and materials are dominated by foreign manufacturers.

In the photomask industry chain, the upstream sector primarily involves equipment, substrates, light-blocking films, and chemical reagents; the midstream sector is photomask manufacturing, and the downstream sector includes chips, flat panel displays, touchscreens, circuit boards, and more.

The urgent demand for domestic substitutes for photomask versions is apparent, and the revenue scale of Chinese photomask manufacturers still has a considerable gap compared to leading overseas manufacturers.

(Photo credit: Toppan)

According to a report by Taiwan’s TechNews, the Huawei Kirin 9000S mobile processor, dubbed by Chinese media as “4G technology with 5G speed,” was incorporated into the Huawei Mate 60 Pro smartphone on the 29th. The phone was made available for purchase directly without a launch event or prior promotion, priced at 6,999 Chinese Yuan, sparking significant industry discussion.

The discussion around the Huawei Kirin 9000S mobile processor stems from the fact that, for the first time post the US-China trade war, a chip foundry has manufactured chips for Huawei, featuring an advanced 5-nanometer process. Does this signify a breakthrough for Chinese chip production amidst US restrictions and a leap forward in China’s semiconductor industry? At present, the answer seems to be negative.

According to insiders’ revelations, the Mate 60 Pro’s Kirin 9000S chip was manufactured by SMIC. However, key production aspects are still under US control, making breaking through these limitations quite challenging.

Screenshots shared by users indicate that Kirin is on a 5nm process. Nonetheless, technical experts widely believe that the 9000S isn’t on a 5nm process; rather, it’s on SMIC’s N+2 process.

Source: fin

SMIC is the only Chinese enterprise capable of mass-producing 14-nanometer FinFET technology. Both N+1 and N+2 processes are improvements based on the 14nm FinFET technology and are achieved through DUV lithography, bypassing US restrictions. (The most advanced processes currently require EUV lithography machines.)

SMIC has not openly stated that N+1 and N+2 are on the 7nm process. However, the chip industry generally considers N+1 to be equivalent to 7nm LPE (Low Power) technology, and N+2 to be equivalent to 7nm LPP (High Performance) technology. The shipment of the Mate 60 Pro seems to have openly revealed information about SMIC’s N+2 process reaching maturity and entering mass production.

(Photo credit: Huawei)

Ukraine is a major supplier of raw material gases for semiconductors including neon, argon, krypton, and xenon, according to TrendForce’s investigations. Ukraine supplies nearly 70% of the world’s neon gas capacity. Although the proportion of neon gas used in semiconductor processes is not as high as in other industries, it is still a necessary resource. If the supply of materials is cut off, there will be an impact on the industry. TrendForce believes that, although the Ukrainian-Russian conflict may affect the supply of inert gas regionally, semiconductor factories and gas suppliers are stocked and there are still supplies from other regions. Thus, gas production line interruptions in Ukraine will not halt semiconductor production lines in the short term. However, the reduction in gas supply will likely lead to higher prices which may increase the cost of wafer production.

Inert gases are primarily used in semiconductor lithography processes. When the circuit feature size is reduced to below 220nm, it begins to enter the territory of DUV (deep ultraviolet) light source excimer lasers. The wavelength of the DUV light generated by the energy beam advances circuit feature sizes to below 180nm. The inert gas mixture required in the DUV excimer laser contains neon gas. Neon gas is indispensable in this mixture and, thus, difficult to replace. The semiconductor lithography process that requires neon gas is primarily DUV exposure, and encompasses 8-inch wafer 180nm to 12-inch wafer 1Xnm nodes.

TrendForce research shows, in terms of foundries, global production capacity at the 180~1Xnm nodes accounts for approximately 75% of total capacity. Except for TSMC and Samsung, who provide advanced EUV processes, for most fabs, the proportion of revenue attributed to the 180~1Xnm nodes exceeds 90%. In addition, the manufacturing processes of components in extreme short supply since 2020, including PMIC, Wi-Fi, RFIC, and MCU all fall within the 180~1Xnm node range. In terms of DRAM, in addition to Micron, Korean manufacturers are gradually increasing the proportion of 1alpha nm nodes (using the EUV process) but more than 90% of production capacity still employs the DUV process.  In addition, all NAND Flash capacity utilizes DUV lithography technology.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com