Per a report from Reuters, Intel is said to be receiving the second new High-NA EUV equipment from ASML, costing EUR 350 million (~USD 383 million).

According to Intel’s earnings call on August 1, CEO Pat Gelsinger stated that Intel began receiving the first large equipment in December, and the installation process would take several months, which is expected to bring about a new generation of more powerful computer chip.

Gelsinger noted during the call that the second High-NA equipment is about to enter the facility in Oregon. Due to the poor stock performance following Intel’s earnings report, this statement did not attract much attention.

Previously, a senior executive from ASML once mentioned in July that the company already begun shipping the second High NA equipment to an unnamed customer, but would only record revenue for the first set this year. However, there are still some uncertainties regarding when the customer will adopt this equipment.

ASML has already received orders for over ten High-NA equipment from customers including TSMC, Samsung, Intel, Micron, and SK Hynix. Intel plans to use this technology for mass production by 2027, and TSMC is also set to receive the equipment this year, the time to put into production has not been disclosed, though.

ASML executive Christophe Fouquet stated on July 17 that DRAM memory chip manufacturers, which could refer to Samsung, SK Hynix, or Micron, are expected to start using High-NA equipment by 2025 or 2026.

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(Photo credit: ASML)

According to a report from Commercial Times, despite ongoing turbulence in the semiconductor industry, including Intel’s capital expenditure cuts and reported bottlenecks in NVIDIA’s B-series GPU, TSMC’s leading position in the industry may remain unshaken.

The sources cited in the report note that the issues with the B-series GPU, stemming from mask replacements to enhance chip stability, have been quickly resolved by the foundry.

The sources cited in the report believe that NVIDIA’s Blackwell started production at the end of the second quarter. To improve stability, NVIDIA replaced some masks, causing about a two-week production delay. The redesign has been completed, and large-scale production will proceed in the fourth quarter.

The same source do not believe it will affect TSMC’s CoWoS revenue, as the idle two-week capacity will be filled by the equally strong demand for H100.

On the other hand, Intel’s CPUs are reportedly facing issues as well. As per the company’s statement, the 13th and 14th generation Intel Core desktop systems are experiencing instability due to a microcode algorithm resulting in incorrect voltage requests to the processor.

Although the company has provided a two-year warranty extension and real-time updates to fix the errors, concerns about design flaws and manufacturing process issues still exist.

In 2024, Intel’s new platforms, Arrow Lake and Lunar Lake, will have their CPU tiles produced using TSMC’s 3nm process, accelerating the production schedule. Lunar Lake and Arrow Lake are expected to ship officially by the end of the third and fourth quarters of this year, respectively.

With the support of the 3nm technology, these measures are expected to alleviate market concerns.

The sources cited by Commercial Times estimate that TSMC’s competitor Intel has begun to strictly cut costs, reducing capital expenditures by 20%. This could affect key capabilities in mass production and defect resolution in wafer manufacturing.

Therefore, sources cited by the report believe that TSMC’s leading position remains difficult to challenge in the short term.

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• [News] TSMC Pushes for FOPLP Mass Production by 2027, Reportedly Eyeing on Innolux’s Plant
• [News] TSMC Reportedly Forms a Team on FOPLP Development, with Mini Line on the Road

(Photo credit: TSMC)

As the demand for AI GPUs increases, TSMC’s advanced packaging capacity for CoWoS is struggling to keep up. Recently, according to a report from Commercial Times, NVIDIA has reportedly turned to Intel for advanced packaging solutions.

According to industry sources cited by the same report, TSMC’s CoWoS-S and Intel’s Foveros packaging technologies are similar, allowing clients to turn to Intel and secures the capacity needed quickly.

Despite its current struggling on transformation, Intel has been gradually developing its ‘s foundry services. In addition to clients like Qualcomm and Microsoft, Intel’s advanced packaging has also attracted interest from companies like Cisco and AWS.

Under the IDM 2.0 strategy, Intel has opened up its wafer outsourcing and foundry services to customers, establishing an the independent IFS foundry service. Earlier this year, Intel secured a major USD 15 billon foundry order from Microsoft for the first system-level AI foundry service, which is expected to use the Intel 18A process.

The report from Commercial Times further suggested that Microsoft’s move is anticipated to reduce its heavy reliance on TSMC. The report also indicates that chip customers, including NVIDIA, have engaged with Intel. Intel’s flexible foundry strategy, which can provide advanced packaging, software, and chiplet services tailored to customer needs, has been well-received by chipmakers.

Sources cited by the same report reveal that the U.S. has begun allocating specialized funds to increase investments in the advanced packaging sector as well. This move could highlight the importance of advanced packaging as the next key area for global competition in production capacity.

In November last year, the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST) released a report titled “National Advanced Packaging Manufacturing Program,” highlighting that advanced packaging technology is one of the key technologies in semiconductor manufacturing.

Additionally, the U.S. Department of Commerce plans to invest approximately USD 3 billion to advance the National Advanced Packaging Manufacturing Program. Intel, alongside Amkor, is another giant in local advanced packaging in the U.S.

The main focus of advanced packaging is on interconnect density, power efficiency, and scaling. From Foveros to hybrid bonding technology, Intel is gradually scaling down bumping pitch sizes, which allows for higher current loads and better thermal performance.

Furthermore, in May last year, Intel’s advanced packaging technology roadmap outlined plans to transition from traditional substrates to more advanced glass substrates.

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(Photo credit: Intel)

Amid the heating tech war between the U.S. and China, and the stringent sanctions imposed to prevent China from obtaining cutting-edge chips, it appears that China is still able to find its way out. According to a report by Tom’s Hardware, citing the New York Times, the latest tactic of China would be setting up new companies to trade advanced hardware and operating them until they are shut down.

Before that, it is understood that Chinese firms have been smuggling NVIDIA chips through some underground networks, which involve buyers, sellers and dispatchers, according to a previous report by the Wall Street Journals.

Now the country seems to find another option in order to evade the sanctions. According to the New York Times and Tom’s Hardware, buyers that include state-owned or affiliated companies, even sanctioned companies, are reportedly collaborating with the Chinese defense industry, as transactions ranging from a few hundreds of GPUs to a deal worth USD 103 million have been observed lately.

The new tactic, it is reported, would be to establish new companies to acquire advanced chips before facing U.S. sanctions. For instance, after Sugon, established under the strong promotion of the Chinese Academy of Sciences and focuses on fields like computing, storage, security and data center, was banned from obtaining NVIDIA chips due to its ties with the Chinese military, some former executives created a new company named Nettrix.

The reports further note that within six months, Nettrix became one of the largest Chinese manufacturers of AI servers, as tech giants including NVIDIA, Intel, and Microsoft have already begun doing business with it, all without violating any American laws. Given the company’s recent establishment, the U.S. likely hasn’t had the opportunity to thoroughly vet its background.

The reports suggest that the White House might significantly reduce Chinese backdoors in trade by ensuring that only licensed, white-listed buyers can legally procure these chips. However, many in the industry oppose increasingly stringent bans, arguing that they harm American companies more than they help.

Before the upcoming U.S. presidential election in November, the Biden authority is said to be considering a series of actions targeting semiconductors. The latest one includes new measures that might unilaterally impose restrictions on China as early as late August, preventing major memory manufacturers like Micron, SK hynix, and Samsung Electronics from selling high-bandwidth memory (HBM) to China.

• [News] US Reportedly Weighs Stricter Limits on AI Memory Access for China
• [News] China Reportedly Acquires Nvidia AI Chips Indirectly; Nvidia, Gigabyte Emphasize Compliance with U.S. Regulations

(Photo credit: Nettrix)

Semiconductor giants like Intel, TSMC, Samsung and Micron have received huge amount of grants from the U.S. government, funded through the CHIPS and Science Act. However, chip making equipment maker Applied Materials is said to be in a different scenario. According to reports by Bloomberg and Tom’s Hardware, the company’s application to gain U.S. funding for a USD 4 billion R&D center in Silicon Valley was rejected by U.S. Department of Commerce.

The reports note that Applied Materials had announced plans to build the facility a year ago, as it tried to seek government subsidies through the CHIPS and Science Act. The facility was scheduled for completion in 2026.

However, according to sources familiar with the matter, Commerce Department officials turned down the plan on Monday, stating that project did not meet the eligibility criteria, Bloomberg reports. This decision marks a major setback for the company’s efforts to establish a significant facility in Silicon Valley, which it aims to develop next-generation chip making tools.

In addition, though it is reported that as there are over 670 companies with interests in the gaining the fund under the CHIPS and Science Act, and the Commerce Department has warned that limited resources will force it to reject many applications, the rejection of Applied Materials’ project is particularly unexpected. For it is a U.S. semiconductor company, and the project closely aligns with the Biden administration’s goals of revitalizing the domestic semiconductor industry.

It is worth noting that though the U.S. keeps tightening the export controls on the semiconductor sector, major chip equipment makers seem to become increasingly dependent on the Chinese market. From February to April, China accounted for 43% of the total sales of Applied Materials, a 22 percentage point increase YoY.

Applied Materials has reportedly received subpoenas from the US Securities and Exchange Commission as well as the US Attorney’s Office of the District of Massachusetts in February, and said to be under investigation for allegedly sending equipment to SMIC, China’s leading chip maker, through South Korea without export licenses.

The CHIPS and Science Act, signed into law in August 2022, allocated approximately USD 280 billion in new funding to enhance domestic chip making research and development.

Previously, the U.S. government announced that Intel would receive USD 8.5 billion in federal subsidies and USD 11 billion in loans. On the other hand, US administration is set to provide USD 6.6 billion and USD 6.4 billion in aid to TSMC and Samsung, respectively.

Read more

• [News] US Reportedly Expands Investigation into Applied Materials, Possibly due to Concerns of Shipments to SMIC
• [News] China Contributes Over 40% of U.S. Chip Equipment Makers’ Revenue despite Export Controls

(Photo credit: Applied Materials)