Pat Gelsinger, CEO of Intel, announced on February 22nd that Intel will expand its orders to TSMC, as per a report by Commercial Times.

Following the IFS Direct Connect event in San Jose, USA, Gelsinger pointed out in an interview that two generations of CPU Tiles would be manufactured using TSMC’s N3B process,  marking the official arrival of Intel CPU orders for laptop platforms. 

Gelsinger’s interview confirms that Intel has indeed expanded its outsourcing orders to TSMC. Currently, TSMC is responsible for producing Intel CPUs, GPUs, and NPUs tiles for the Arrow and Lunar Lake platforms.

As per Intel’s product roadmap, Arrow Lake will utilize the Intel 20A process, while Lunar Lake will utilize the 18A process, both incorporating transistor designs such as PowerVia and RibbonFET.

Gelsinger previously stated that Intel Foundry is striving to become the world’s second-largest foundry by 2030. The objective is to fill the fabs and supply the widest range of customers globally, including competitors like NVIDIA and AMD.

According to TrendForce’s data statistics for the third quarter of 2023, the world’s top three foundries were TSMC, Samsung, and GlobalFoundries, with Intel Foundry Services (IFS) ranking ninth at the time.

As for rumors about the US government considering providing over USD 10 billion in subsidies, he disclosed that they expect to receive chip legislation subsidies very soon, although the exact amount is yet to be announced.

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(Photo credit: Intel)

On February 21st, Intel Foundry Direct Connect 2024 took place in San Jose, USA. During the conference, Intel announced the launch of Intel Foundry, a system-level foundry tailored for the AI era. They unveiled seven new process nodes beyond 2024, including the next-generation Intel 14A and 14A-E processes, which utilize High-NA EUV equipment.

In the reconstruction of Intel, Gelsinger had also articulated a vision to establish a world-class foundry and become a major chip capacity provider in the United States and Europe. Now, three years later, this vision is becoming a reality.

The newly introduced Intel Foundry is a rebranded and restructured organizational model. Gelsinger emphasizes that Intel is not merely fixing a company but “establishing two vibrant new organisations”: Intel Foundry and Intel Products. Intel Foundry is dedicated to serving both internal and external customers on a large scale, establishing a supply chain to ensure capacity.

Gelsinger stated that Intel Foundry is striving to become the world’s second-largest foundry by 2030. According to TrendForce’s data statistics for the third quarter of 2023, the world’s top three foundries were TSMC, Samsung, and GlobalFoundries, with Intel Foundry Services (IFS) ranking ninth at the time.

• Process Innovation

During the conference, Intel expanded its process technology roadmap, introducing the evolution versions of Intel 14A and several specialized nodes.

Intel also confirmed that its “Four Years, Five Process Nodes” roadmap is progressing steadily, and it will be the first to offer backside power delivery solutions in the industry. Intel expects to regain process leadership by 2025 with the Intel 18A process node.

The new roadmap includes evolved versions of Intel 3, Intel 18A, and Intel 14A technologies. For instance, Intel 3-T is optimized for 3D advanced packaging designs through silicon via technology and is expected to be production-ready soon.

Intel also highlighted its progress in mature process nodes, such as the newly announced 12-nanometer node developed in collaboration with UMC in January.

Regarding this collaboration, TrendForce believes that this partnership, which leverages UMC’s diversified technological services and Intel’s existing factory facilities for joint operation, not only aids Intel in transitioning from an IDM to a foundry business model but also brings a wealth of operational experience and enhances manufacturing flexibility.

Intel’s foundry plans to introduce a new node every two years and evolve node versions along the way, helping customers improve their products through Intel’s leading process technology.

Source: Intel

Additionally, Intel Foundry announced the addition of FCBGA 2D+ in the technical portfolio of Intel Foundry Advanced System Packaging and Testing (Intel Foundry ASAT). This combination will include FCBGA 2D, EMIB, Foveros, and Foveros Direct technologies.

• Microsoft Becomes Intel’s 18A New Client

Intel’s client have reportedly expressed support for Intel’s systemic foundry services. Satya Nadella, Chairman and CEO of Microsoft, announced during the Intel Foundry Direct Connect conference that Microsoft plans to utilize Intel’s 18A process to manufacture a chip designed by the company.

Satya Nadella stated, “We are in the midst of a very exciting platform shift that will fundamentally transform productivity for every individual organization and the entire industry.”

Nadella further mentioned, “To achieve this vision, we need a reliable supply of the most advanced, high-performance and high-quality semiconductors. That’s why we are so excited to work with Intel Foundry, and why we have chosen a chip design that we plan to produce on Intel 18A process.”

Intel Foundry has amassed a substantial number of client design cases across various processes, including Intel 18A, Intel 16, and Intel 3, as well as Intel Foundry ASAT, which encompasses advanced packaging.

Overall, the anticipated lifetime deal value for Intel Foundry in wafer manufacturing and advanced packaging surpasses USD 15 billion.

• IP and EDA Suppliers

IP (Intellectual Property) and EDA (Electronic Design Automation) partners Synopsys, Cadence, Siemens, Ansys, Lorentz, and Keysight have announced that tools and IP are ready to help foundry customers accelerate advanced chip designs based on Intel’s 18A process, featuring the industry-first backside power delivery solution. Furthermore, these partners have confirmed the availability of their EDA and IP solutions across various Intel node families.

Additionally, several suppliers have announced plans to collaborate on assembly technologies and design flows for Intel’s EMIB 2.5D packaging technology. These EDA solutions will ensure Intel can swiftly develop and deliver advanced packaging solutions to its customers.

Intel has also unveiled the “Emerging Business Initiative” (EBI), which involves collaboration with Arm to provide advanced foundry services for System-on-Chip (SoCs) based on the Arm architecture. This initiative aims to support startups in developing technology based on the Arm architecture by offering essential IP, manufacturing support, and financial assistance. It provides an important opportunity for both Arm and Intel to foster innovation and development in the industry.

• Systematic Foundry

Intel’s system-level foundry model offers optimization from factory networks to software. Intel and its ecosystem provide continuously improving technologies, reference designs, and new standards, enabling customers to innovate at the system level.

Stuart Pann, Senior Vice President of Intel Foundry, stated, “We are offering a world-class foundry, delivered from a resilient, more sustainable and secure source of supply, and complemented by unparalleled systems of chips capabilities. Bringing these strengths together gives customers everything they need to engineer and deliver solutions for the most demanding applications.”

• Global, Resilient, More Sustainable, and Trustworthy Systematic Foundry

In terms of sustainability, Intel aims to be the leading foundry in the industry. In 2023, Intel’s global factories achieved a preliminary estimate of a 99% renewable energy usage rate.

At the Intel Foundry Direct Connect conference, Intel reiterated its commitment to reaching 100% renewable energy usage, water positive status, and zero landfill waste by 2030. Additionally, Intel emphasized its commitment to achieving net-zero Scope 1 and Scope 2 greenhouse gas (GHG) emissions by 2040 and net-zero upstream emissions of Scope 3 GHG by 2050.

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(Photo credit: Intel)

TSMC is scheduled to hold the opening ceremony for its Kumamoto plant on February 24. In contrast, the construction progress of its Arizona plant in the United States has been relatively slow.

According to TechNews citing a research report from the Center for Security and Emerging Technology (CSET), the construction speed of semiconductor plants in the United States is the slowest globally due to the intricate regulatory environment. While the U.S. chip law supports the semiconductor industry, it is insufficient to address construction costs and timelines.

Looking at the construction speed of the three major foundries in the United States, they have indeed all fallen behind their original targets. For instance, TSMC’s Arizona plant was delayed by a year, Intel’s Ohio plant was pushed from 2025 to the end of 2026, and Samsung’s Texas plant, due to not receiving chip bill subsidies, was also delayed to 2025.

As per research conducted by CSET on the construction of 635 semiconductor plants from 1990 to 2020, the average time from groundbreaking to production was 682 days globally. However, in the United States, the average was 736 days, significantly higher than the global average and second only to Southeast Asia’s 781 days.

In comparison, the construction speeds in Taiwan, South Korea, and Japan are 654 days, 620 days, and 584 days, respectively, with Japan’s performance being quite remarkable. As for Europe and the Middle East, the average is 690 days, while in China, it is 701 days.

The report further indicates that in the 1990s and 2000s, foundries in the United States had a relatively faster construction speed, with an average time of about 675 days. However, by the 2010s, this time frame extended to 918 days.

Meanwhile, during the same period, the construction speed in China and Taiwan significantly accelerated, with average completion times of 675 days and 642 days, respectively.

Furthermore, the number of foundries in the United States has been declining, from 55 in the 1990s to 43 in the 2000s and 22 in the 2010s. In contrast, the construction speed of foundries in China has significantly accelerated, from 14 in the 1990s to 75 in the 2000s, and further to 95 in the 2010s.

Although China’s semiconductor technology is still in the catch-up phase, the construction of foundries positions it as a dominant force in the industry.

Stringent Regulations in the United States Lead to Slow Factory Construction Despite Favorable Conditions 

The report highlights seven key requirements for foundry construction: Large plots of land, low seismic activity, stable water supply, stable supply of electricity, talent, transportation infrastructure, and nearby land for co-location with key suppliers.

In these aspects, the United States outperforms Taiwan; however, the primary obstacle is regulatory issues.

Due to the unique federal structure of the United States, foundry construction must comply with federal, state, and local regulations, resulting in an exceptionally complex regulatory process. Additionally, environmental policies pose obstacles to foundry construction, particularly due to stringent requirements for environmental protection

The report suggests that to enhance the United States’ competitiveness in the global semiconductor industry, the government needs to streamline regulatory processes, eliminate redundant regulations, and establish expedited pathways to accelerate semiconductor industry construction projects.

Additionally, there should be an acceleration of environmental review processes and investment in the development of alternative materials to ensure sustainable semiconductor material supplies.

With the continued growth in global semiconductor demand, the construction speed and efficiency of US semiconductor fabs will directly impact its position in the global market.

To maintain its leading position, per the report, the United States urgently needs to take action to address this issue. Currently, it is unclear how much impact the delayed construction of semiconductor fabs by TSMC, Intel, and Samsung will have.

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(Photo credit: TSMC)

The latest financial reports for 4Q23 from six leading global semiconductor foundries signal optimism for the semiconductor industry’s recovery in 2024.

In 2023, the semiconductor sector underwent significant adjustments. As the industry worked towards normalizing its inventory levels amidst ongoing high inflation risks, the short-term market outlook remained unclear. #TrendForce has analyzed the latest financials from these six foundries to provide insights into what 2024 might hold for the industry.

TSMC

TSMC reported a slight YoY revenue decrease of 1.5% to US$19.62 billion in 4Q23, though it saw a 13.6% increase from the previous quarter. With an anticipated CAGR of 15–20%, TSMC’s 2024 capital expenditures are expected to be between $28 billion and $32 billion.

The company forecasts more than 10% growth in the semiconductor market (excluding memory) and around 20% growth in the wafer fabrication sector for 2024.

Samsung Electronics

Samsung Electronics’ 4Q23 consolidated revenue fell 3.81% YoY to ₩67.78 trillion. Its DS division reported revenues of ₩21.69 trillion but faced an operating loss of ₩2.18 trillion.

Despite the challenges, Samsung is focusing on advancing 3nm and 2nm GAA process technologies, expecting a revival in smartphone and PC demand in 2024 to rejuvenate the foundry market to its former prosperity.

Intel

Intel’s 4Q23 earnings saw a 10% revenue increase to $15.406 billion, with its foundry business, Intel Foundry Services, jumping 63% to $291 million in revenue.

Despite seasonal demand slumps in its core PC and server segments, Intel’s AI chips have accumulated $2 billion in orders, with sales forecast to improve in the second half of the year.

Global Foundries

GlobalFoundries reported a 12% revenue drop in 4Q23 to $1.85 billion, with a net income of $356 million. The company anticipates 1Q24 revenues to range between $1.5 billion and $1.54 billion, primarily due to the current industry-wide chip inventory adjustments.

Nevertheless, GlobalFoundries expects its 2023 automotive market revenue to surpass $1 billion, forecasting continued growth into 2024.

UMC

UMC disclosed a 19% YoY decrease in 4Q23 revenues to $1.79 billion. The company cited an extended semiconductor industry inventory adjustment period due to a challenging global economic climate, leading to a slight reduction in wafer shipments and capacity utilization. UMC expects a gradual uptick in wafer demand through 1Q24.

SMIC

SMIC reported a modest increase in 4Q23 revenues to $1.68 billion, with a 0-2% growth projection for 1Q24. Despite last year’s cyclical lows and competitive pressures, SMIC anticipates its 2024 revenue growth will at least match the industry average, with capital expenditures mirroring those of 2023.

TrendForce had earlier forecasted a delayed recovery in the end-market by the fourth quarter of 2023. However, they noted that inventory stocking by Chinese Android firms for the year-end sales rush—particularly for mid-to-low-end 5G and 4G smartphone application processors—alongside the influence of new Apple iPhone releases, might surpass initial expectations.

This indicates that the revenues of the world’s top ten semiconductor foundries are poised for growth, potentially surpassing the growth rates observed in the third quarter.

(Photo credit: Samsung)

The competition for dominance in 2nm semiconductor technology has intensified at the beginning of 2024, marking a crucial battleground among global foundry companies.

As per a report from IJIWEI, major foundry enterprises such as Samsung Electronics, TSMC, and Intel are set to commence mass production adopting 2nm process starting this year. Consequently, the fierce competition for supremacy in 2nm technology is expected to escalate from 2025 onwards. Currently, the most advanced production technology globally is at the 3nm level.

• TSMC

TSMC’s 2nm products will be manufactured at the Fab 20 in the Hsinchu Science Park in northern Taiwan and at a plant in Kaohsiung.

The Fab 20 facility is expected to begin receiving related equipment for 2nm production as early as April, with plans to transition to GAA (Gate-All-Around) technology from FinFET for 2nm mass production by 2025.

During TSMC’s earnings call on January 18th, TSMC revealed that its capital expenditure for this year is expected to fall between USD 28 billion and 32 billion, with the majority (70% to 80%) allocated to advanced processes. This figure is similar to that of 2023 (USD 30.4 billion), indicating stable investment to ensure its leading position in 2nm technology.

• Intel

After announcing its re-entry into the foundry business, Intel is actively advancing its foundry construction efforts. The plan includes the introduction of the Intel 20A (equivalent to 2nm) process in the first half of 2024 and the Intel 18A (1.8nm) process in the second half of the year. It is understood that the Intel 18A process will commence test production as early as the first quarter of this year.

Intel’s 2nm roadmap is more ambitious than originally anticipated, being accelerated by over six months. In response to criticisms of its “overly ambitious” plans, Intel swiftly began procuring advanced Extreme Ultraviolet (EUV) equipment.

• Samsung Electronics

Samsung Electronics has devised a strategy to gain an advantage in the more advanced process war through its Gate-All-Around (GAA) technology. Currently, it is mass-producing the first-generation 3nm process based on GAA (SF3E) and plans to commence mass production of the second-generation 3nm process this year, significantly enhancing performance and power efficiency.

Regarding the 2nm process, per a report from Nikkei, Samsung plans to start mass production for mobile devices in 2025 (SF2) and gradually expand to high-performance computing (HPC) in 2026 and automotive processes in 2027.

Currently, Samsung Electronics is producing GAA products for the 3nm process at its Hwaseong plant and plans to manufacture products for both the 3nm and 2nm processes at its Pyeongtaek facility in the future.

• Rapidus

Rapidus, a chip manufacturing company supported by the Japanese government, is expected to trial-adopt 2nm process at its new plant by 2025 and begin mass production from 2027.

If Rapidus’ technology is validated, the global foundry market may expand beyond the Taiwan-Korea duopoly to include Taiwan, Korea, the United States, and Japan.

The technology competition to become a “game-changer” ultimately depends on the competition for customers. It’s rumored that TSMC holds a leading position in the 2nm field, with Apple speculated to be its first customer for the 2nm process. Graphics processing giant NVIDIA is also considered a major customer within TSMC’s client base.

According to TrendForce data as of the third quarter of 2023, TSMC’s revenue share accounted for a dominant 57.9%, with Samsung Electronics trailing at 12.4%, a gap of 45.5 percentage points.

However, Samsung Electronics is not sitting idly by. With continuous technological investment, Samsung’s foundry customer base grew to over 100 in 2022, a 2.4-fold increase from 2017. The company aims to expand this number to around 200 by 2028.

Particularly, Samsung’s early adoption of GAA technology is expected to give it an advantage in achieving early production volumes for advanced processes.

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(Photo credit: TSMC)