Recently, the Financial Times reported that despite over USD 400 billion in tax incentives, loans, and subsidies provided by the U.S. under the Inflation Reduction Act and the CHIPS and Science Act to boost local clean energy technology and semiconductor industries, the resurgence of U.S. manufacturing has been delayed as investors hit pause on their plans.

Reportedly, there are 114 major projects tied to these acts, totaling USD 227.9 billion in investments. However, projects with a combined investment of approximately USD 84 billion have faced delays ranging from two months to several years, with some even indefinitely postponed. These delays include several semiconductor projects.

Companies involved have cited worsening market conditions, slowing demand, and uncertainties in domestic policies as reasons for altering their investment plans.

• TSMC Delays Production at Arizona Facility

On August 13, TSMC announced several board resolutions, including the approval of a nearly USD 29,6 billion capital budget. Among these, TSMC approved up to USD 7.5 billion in funding for its wholly-owned subsidiary, TSMC Arizona.

TSMC had initially planned to build three fabs in Arizona over the next few years, with a total investment of USD 65 billion. However, per a recent New York Times report, despite four years having passed since the announcement, the Arizona plant has yet to produce a single chip.

According to a report from WeChat account DRAMeXchange, cultural differences and competition for labor resources with Intel are among the factors contributing to the challenges faced by TSMC’s Arizona facility, leading to production delays.

When TSMC announced plans to build a semiconductor fab in Arizona in May 2020, the initial plan was to start construction in 2021, with production slated to begin in 2024. The second fab was announced in December 2020, with a production target of 2026.

In May of this year, TSMC’s website indicated that the first Arizona fab’s production start has been postponed to the first half of 2025, while the second fab’s production has been delayed to 2028.

As for the third fab, TSMC has not yet disclosed the start date for construction, but the official plan is to commence production by the late 2030s.

According to TSMC’s plan, the first Arizona fab will use 4nm process technology, the second fab will employ 2nm technology, and the third fab will utilize 2nm or more advanced process technologies.

• Intel Delays Construction of Ohio Project

Intel, the U.S. semiconductor manufacturer, plans to invest USD 100 billion over the next five years in new fabs and expansions across Arizona, New Mexico, Ohio, and Oregon, creating 10,000 manufacturing jobs and 20,000 construction jobs.

Yet, according to a previous report by The Wall Street Journal in February, Intel has delayed its USD 20 billion chip project in Ohio due to market downturns and delays in U.S. subsidies.

Intel is set to build two new advanced fabs in Ohio, with an initial plan to begin chip manufacturing in 2025. Following adjustments, the completion of Intel’s Fab1 and Fab2 projects in Ohio has been postponed to 2026–2027, with operations expected to commence around 2027–2028.

As chip manufacturing processes advance to 3nm and 2nm, the investment required for fabs has surged, putting semiconductor companies under financial pressure. Against this backdrop, Intel has not only delayed the construction of its Ohio facility but has also made adjustments to its European projects.

Intel’s planned EUR 30 billion investment in two fabs, Fab 29.1 and Fab 29.2, in Magdeburg, Germany, was initially set to start in the second half of 2023.

However, due to delays in confirming EU subsidies and the need to remove topsoil at the construction site, Intel has postponed the start date to May 2025. Additionally, Intel has also paused its investment plans for facilities in France and Italy.

• Samsung Delays Taylor Fab Project

Initially, Samsung planned to build a semiconductor cluster in Taylor, Texas, including two advanced logic fabs and one advanced packaging facility, with up to USD 6.4 billion in U.S. subsidies.

The first of these fabs in Taylor began construction in 2022, initially scheduled to start production in 2024 with 4nm process capabilities. However, the plant may not begin operations until 2026, US local media MySA noted. This delay is likely due to a slowdown in the foundry market and delays in the disbursement of U.S. subsidies.

Meanwhile, according to reports from Tom’s Hardware and the Korean media outlet ETnews, with the delay in the construction of the semiconductor plant, Samsung may upgrade the facility’s advanced process technology from 4nm to 2nm.

This adjustment aims to enhance Samsung’s competitive edge in advanced process, positioning it more effectively against rivals like TSMC, Intel, and Rapidus.

Read more

• [News] Nearly 40% of Major Manufacturing Projects Reportedly Face Delays under U.S. IRA and CHIPS Act
• [News] Opening of TSMC Kumamoto Plant Nears, Yet Delay in Arizona Plant – Why is US Semiconductor Fab Construction Lagging Globally?

(Photo credit: TSMC)

After announcing reductions in capital expenditures, massive layoffs, and the suspension of dividends, according to a report from Reuters, Intel is focusing on increasing its cash reserves to sustain company operations. The same report also indicates that Intel has sold off its entire stake in the intellectual property company Arm.

Per another report by wccftech, based on Intel’s Form 13-F filed with the U.S. Securities and Exchange Commission (SEC), the company has disposed of its entire stake in Arm Holdings, totaling 1.18 million shares. Reuters further reported that through this sale, Intel would have raised approximately USD 146.7 million.

Despite selling its shares in Arm, Intel has retained its holdings in companies like Astera Labs, Joby Aviation, MariaDB, and Senti Biosciences. Yet, as per the same report from wccftech, these investments have yet yielded significant returns, with Intel currently experiencing a cumulative loss of USD 120 million on them in Q2.

At that time, Intel CEO Pat Gelsinger pointed out that Intel must align its cost structure with the latest operational model and fundamentally change the way the company operates. He indicated that Intel’s revenue growth has not met expectations and has not yet benefited from powerful trends such as AI.

Read more

• [News] Intel’s Earnings Fall Short, Cutting Over 15% of Workforce
• [News] Intel Suspended Investment in French and Italian Chip Plants

(Photo credit: Intel)

Per a report by the Vietnam News Agency, Vietnamese Prime Minister Phạm Minh Chính recently signed Government Decree No. 791/QĐ-TTg on the establishment of the National Steering Committee for Semiconductor Industry Development.

The main tasks and functions of the steering committee include assisting the Prime Minister and the government in researching, guiding, and coordinating the resolution of important and cross-departmental matters related to promoting the development of Vietnam’s semiconductor industry; researching, consulting, and advising on directions and solutions to promote the industry’s growth; and guiding the coordination among various departments, government agencies, relevant organizations, and entities to vigorously advance the development of Vietnam’s semiconductor industry.

Semiconductor industry is one of the strategically important global industries, and it undoubtedly represents a significant development opportunity for Vietnam.

It is reported that the semiconductor, as one of Vietnam’s nine national-level products, has been included in the country’s key development priorities for the next 30 to 50 years.

According to its National Semiconductor Industry Strategy, Vietnam aims to become a global center for semiconductor chip design, packaging, and testing by 2030.

To achieve this goal, the Vietnamese government has introduced a series of preferential policies and incentives to encourage foreign enterprises to invest in the country.

Moreover, the government has established the National Innovation Center (NIC) to create a high-tech ecosystem and beef up the training of professionals to meet the needs of developing semiconductor industry.

Currently, Vietnam has drawn in investment from foreign enterprises such as Intel, ASE Group, Samsung Electronics, Amkor, Qualcomm, ONSemi, Renesas, Texas Instruments, NXP, Marvell, Synopsys, Hana, and Anpei. In fact, with global capital investment, Vietnam’s semiconductor industry ecosystem is gradually taking shape in recent years.

Vietnam’s Minister of Planning and Investment Nguyễn Chí Dũng stated that Vietnam boasts some conditions and factors conducive to the development of semiconductor industry, involving a stable political system, a favorable geographical location, and attractive investment incentive policies.

The Vietnamese government has been committed to developing semiconductor industry and hopes to attract more and more large enterprises to invest in Vietnam.

Read more

• [News] Nvidia CEO Visits Vietnam, Plans to Establish Chip R&D Base

(Photo credit: Intel)

Last week, semiconductor giant Intel reported weak quarterly earnings, with announcements made on a massive 15% cut of workforce and an over 20% reduction on capital expenditures in 2024. Now the company seems to make up its mind on cost-cutting, as it has started notifying attendees that its fall Innovation 2024 trade show has been postponed, according to a report by AnandTech.

The event, which is previously scheduled in late September, is now rescheduled for some time in 2025, according to a message the company posted on the Innovation 2024 website. However, Intel did not provide a clear timeline for when the event will return.

In a message posted on the Innovation 2024 website, Intel confirmed the postponement. Instead of the larger event, it plans to hold smaller developer gatherings.

According to the message, for the remainder of 2024, Intel will continue to host smaller, more targeted events, webinars, hackathons and meetups worldwide through Intel Connection and Intel AI Summit events, as well as have a presence at other industry moments.

According to another report by PCMag, Intel explained the reason for the postponement further, saying that given the company’s financial results and outlook for the second half of 2024, which is tougher than previously expected, it is having to make some tough decisions as it continue to align its cost structure and look to assess how it rebuild a sustainable engine of process technology leadership.

AnandTech further notes that the event, which has been hosting since 2021, is Intel’s regular technical event for developers, customers, and the public, serving as the successor to the company’s iconic IDF (Intel Developer Forum) show. However, without providing a clear timeline for when the Innovation event will return, its future is now uncertain.

In its Innovation event 2023, Intel introduced Meteor Lake, the first chips built on Intel’s 4 process (4nm) with a dedicated AI coprocessor inside.

Now, a few days after Intel revealed the progress on its next-gen 18A process, which is aimed for start production in 2025, the event has been postponed. The move also makes the public wonder about whether its next-gen processors, Panther Lake (AI PC client processor) and Clearwater Forest (server processor), will be released on schedule.

On the other hand, PCMag notes that the Innovation event could have provided Intel executives with a platform to address the controversy surrounding a CPU bug that can permanently damage 13th and 14th Generation Core desktop chips.

Regarding the issue, Intel has now extended the warranty by two full years on 24 different 13th Gen and 14th Gen desktop chips, including Core i5, Core i7, and Core i9 models, after determining that many CPUs based on its Raptor Lake architecture are vulnerable to permanent damage. The problem stems from excessive voltage, causing some CPUs to degrade irreversibly.

Read more

• [News] Intel’s 18A to Start Production in 2025, Featuring Processors for AI PCs and Servers
• [News] Intel’s Earnings Fall Short, Cutting Over 15% of Workforce

(Photo credit: Intel)

According to a report from The Chosun Daily, major tech companies like NVIDIA are considering using Intel’s foundry services (IFS) as an alternative due to TSMC’s packaging capacity shortages. While packaging is a core competency for semiconductor foundries, Samsung, which is facing difficulties in attracting customers, will need to exert maximum effort to secure orders.

It’s highlighted by the report that the demand for AI accelerators is growing rapidly, but TSMC’s AI chip production capacity is unable to keep up.

Furthermore, per The Chosun Daily citing sources, major clients like NVIDIA and Apple have secured TSMC’s 3nm advanced process capacity, pushing order backlogs into 2026.

Therefore, major tech companies seeking alternatives are turning to Intel’s IFS. Since Intel’s Foveros is said to be comparable to TSMC’s CoWoS-S, it has made Intel’s advanced packaging a viable option to ensure supply.

TSMC and Intel offer advanced packaging services to customers under the names CoWoS and Foveros, respectively. Both CoWoS and Foveros are advanced packaging technologies that connect two or more semiconductor chips on a wafer and then place them onto a packaging substrate.

Reportedly, in addition to NVIDIA and Microsoft, Amazon and Cisco are considering outsourcing to Intel Foundry to reduce their dependence on TSMC.

The report further emphasizes that this market trend is likely to cause anxiety for Samsung, which competes with TSMC and Intel in advanced processes.

Recently, Samsung’s former clients, Google and Qualcomm, have chosen TSMC, while Intel, seen as a latecomer, is catching up by securing advanced packaging orders from major tech companies, potentially narrowing the gap with Samsung.

Kim Hak-sung, head of Hanyang Institute of Smart Semiconductor, said that packaging is a technology that critically influences customer acquisition in the AI semiconductor era, where various types of chips are interconnected.

He noted that although there may not be a substantial technical capabilities difference between Samsung Electronics and Intel, as mass production experience allows the process to stabilize and become more appealing to customers.

Kim eventually addressed that to stay competitive, Samsung needs to focus on capturing the volumes that TSMC cannot accommodate, positioning itself ahead of Intel.

Read more

• [News] TSMC Reportedly to Raise 3nm & 5nm Prices Soon, Looking to Maintain Long-Term Profit Margins 
• [News] Major Clients Reportedly Fully Allocate TSMC’s Production Capacity Until 2026, 3nm Process in High Demand
  

(Photo credit: Samsung)