Ennostar, a Taiwanese group focusing on the R&D and manufacturing of Micro LED, LED and compound semiconductor, has announced on January 19th a NTD 670 million (roughly USD 21.36 million) sale of the planned Micro LED production facility in Zhunan, Taiwan.

Its subsidiary, EPISTAR, is anticipated to expedite Micro LED development by integrating existing resources in alternative locations.

According to TechNews’ report, Chin-Yung Fan, chairman of EPISTAR, anticipates “symbolic revenue” from Micro LED starting this year. He notes that in 2021, with the rise of Micro LED and Mini LED, existing facilities were insufficient. While planning to build new facilities based on customer demand and market predictions, the pandemic delayed many new technologies.

Following the integration of Ennostar’s factory resources, which are now available for EPISTAR’s use, the decision has been made to sell the Zhunan facility.

During an earnings call in 2023, Ennostar mentioned that the initial capacity demand for Micro LED is still low. Consequently, the company has slightly postponed its plans for new production capacity and will closely monitor the actual market demand.

Fan also emphasized that the volume of Micro LED will undoubtedly increase, and the significant symbolic revenue is expected around 2027, given the longer evaluation time for Micro LED in automotive applications.

However, the sale of Ennostar’s factory also highlights the delayed mass production of Micro LED. Currently, Micro LED is primarily used in large display products like TVs and small displays for smartwatches.

AUO, a Taiwanese company that specializes in optoelectronic solutions, commenced Micro LED production at the end of last year, supplying to high-end smartwatch clients, expected to achieve cost efficiency.

As for Samsung and LG, they view Micro LED TVs as a core market, aiming to enhance profitability through positioning them as high-end television options. At CES 2024, Samsung showcased a transparent Micro LED screen, reaffirming the potential of Micro LED as the next-generation display technology. However, due to the high unit price, mass adoption in the consumer market is currently limited.

Furthermore, despite being a key industry influencer, Apple has not yet integrated Micro LED into its product roadmap. Notably, the Vision Pro, currently available for pre-orders, opts for Micro OLED instead, signaling that the practical implementation of Micro LED in products may still be some time away.

Although it will take some time for mass production to ramp up, Taiwanese manufacturers are actively laying the groundwork for Micro LED technology. Major Micro LED manufacturers, such as PlayNitride, have signed production line construction contracts with EPISTAR and AUO.

EPISTAR has completed construction by the end of last year, while AUO is expected to have production capacity by the end of next year. Both AUO and Innolux, under the umbrella of the CarUX initiative, showcased Micro LED automotive technology at this year’s CES.

Innolux has also purchased a significant amount of transfer equipment from PlayNitride, further enhancing the completeness of the Taiwanese Micro LED supply chain.

Read more

• [News] Samsung Semiconductor to Take Over Samsung Micro LED Business
• [News] AUO and PlayNitride Sign NT$700 Million Deal for 6-inch Micro LED CoC Line in Taiwan

(Photo credit: AUO)

According to industry sources cited by South Korean media The Chosun Daily, Samsung has commenced the production of prototypes for its second-generation 3nm process and is testing the chip’s performance and reliability. The goal is to achieve a yield rate of over 60% within the next six months.

TSMC and Samsung are both actively vying for customers. Samsung is preparing to commence mass production of the second-generation 3nm GAA architecture in the first half of the year. The key to success in the competition lies in whether Samsung can meet the demands of major clients such as Nvidia, Qualcomm, AMD, and simultaneously achieve a rapid increase in production.

Samsung is currently testing the performance and reliability of prototypes for the second-generation 3nm process, with the initial product set to feature in the soon-to-be-released Galaxy Watch 7 application processor (AP). It is expected to be used in the Galaxy S25 series Exynos 2500 chip next year.

If the production yield and performance of the second-generation 3nm process are stable, there is a chance that customers who had previously switched to TSMC may return to Samsung, especially considering Qualcomm’s movements.

As per report, Qualcomm is collaborating with TSMC in the production of the next-generation Snapdragon 8 Gen 3. Additionally, Nvidia’s H200, B100, and AMD’s MI300X are expected to adopt TSMC’s 3nm process.

Samsung announced in November of last year that it would commence mass production of the second-generation 3nm process in the latter half of 2024. While Samsung has not responded to Chosun’s report regarding the production of prototypes for the second-generation 3nm process, the timeline seems plausible.

However, the report mentions a chip yield rate of 60% without specifying transistor count, chip size, performance, power consumption, or other specifications.

Furthermore, according to Tom’s Hardware’s report, the chip size, performance, and power consumption targets for processors used in smartwatches, mobile phones, and data centers are entirely different. A 60% yield rate for small chips would make commercial use challenging, but for chips with a reticle size of 60% yield rate, it would be reasonably acceptable.

However, caution is advised in interpreting this report due to the uncertainties surrounding Samsung’s second-generation 3nm process production targets at its semiconductor foundries.

Nonetheless, the commencement of the second-generation 3nm process production is a significant development for both Samsung and the semiconductor industry as a whole.

(Image: TSMC)

The global foundry advanced process battle is reigniting, as reported by the Commercial Times. TSMC’s 2-nanometer process at the Baoshan P1 wafer fab in Hsinchu is set to commence equipment installation as early as April, incorporating a new Gate-All-Around (GAA) transistor architecture and aiming for mass production in 2025.

Additionally, expansion plans for Baoshan P2 and the Kaohsiung fab are projected to join in 2025, with evaluations underway for Phase 2 in the Central Taiwan Science Park. The competition with Samsung and Intel in the most advanced process is intensifying.

Semiconductor industry sources note the ongoing progress in global foundry advanced processes, with Samsung entering GAA architecture early at 3 nanometers, though facing yield challenges, while Intel anticipates mass production of its RibbonFET architecture at 20A this year.

In response to fierce competition, TSMC must accelerate its pace. The ‘Gate-All-Around’ (GAA) technology is a critical factor determining whether chip processing power will double within 1.5 to 2 years.

As per the report, Samsung’s attempt to lead in the 3-nanometer chip segment, transitioning from traditional FinFET, has faced stability issues in yield, hampering customer adoption, and giving TSMC confidence in its 3-nanometer progress. This also highlights the increased complexity in transitioning from 2D to 3D chip designs with GAA transistor architecture.

Furthermore, Intel is intensifying its efforts to catch up, planning to launch Intel 20A in the first half of the year and Intel 18A in the second half. However, it is speculated that Intel 20A will be exclusively used for Intel’s own products, maintaining a close collaboration with TSMC.

TSMC, adopting a cautious approach, benefits from a more advantageous cost structure by minimizing changes in production tools within the same process technology and manufacturing flow. For customers, altering designs during advanced process development incurs significant time and economic costs.

Supply chain sources reveal that TSMC finalized various parameters for its 2-nanometer process at the end of last year, confirming specialty gases and equipment. Contracts are gradually being signed, with equipment installation at the Baoshan P1 fab scheduled to commence in April. Equipment industry sources suggest that TSMC’s process advancement is progressing rapidly as expected, speculating that there will be updates on the Baoshan P2 fab later this year.

(Image: TSMC)

Countries around the world are leaving no stone unturned in their pursuit of semiconductor development, and South Korea is no exception. South Korea has just unveiled an ambitious plan to invest a staggering 622 trillion Korean won (approximately $471 billion USD) in collaboration with industry giants Samsung Electronics and SK hynix, aiming to create the world’s largest semiconductor supercluster.

According to reports from The Korea Times, South Korea’s vision includes the construction of the world’s largest semiconductor cluster in Gyeonggi Province by 2047. As revealed by the Ministry of Trade, Industry, and Energy in South Korea, Samsung Electronics, SK hynix, and other semiconductor companies are set to pool their resources into building 16 new fabs, with the potential to generate over 3 million job opportunities.

This ambitious undertaking will involve an expansion of the existing mega cluster, which already boasts 19 production fabs and two research fabs spread across adjacent cities in the province. The new mega chip cluster, spanning a massive 2,102 square meters, is slated to commence production, churning out an impressive 7.7 million wafers each month, beginning in 2030.

Within this sprawling cluster, Samsung Electronics has outlined plans to construct six new fabs at the national industrial complex in Yongin, with an investment commitment of 360 trillion Korean won. Additionally, the company intends to establish three fabs in Pyeongtaek, involving an investment of 120 trillion Korean won, and three research fabs at an R&D center located in the Giheung District, at a cost of 20 trillion Korean won. Meanwhile, SK hynix is earmarking 122 trillion Korean won for the construction of four fabs at another industrial complex in Yongin.

The primary objective of this supercluster is to foster an environment conducive to the production of cutting-edge memory chips, including high bandwidth memory (HBM), and system semiconductors measuring 2 nanometers or more advanced nodes.

Reports suggest that with the establishment of this new cluster, the South Korean government has set ambitious targets for the country. By 2030, they aim to capture a significant 10% share of the system semiconductor market, a substantial increase from the current 3%. 

Furthermore, the government plans to boost self-sufficiency in the supply chain of critical materials, components, and equipment from the current 30% to an impressive 50% by the year 2030.

(Image: SK Hynix)

With the semiconductor market facing uncertainties and limited signs of industry recovery in the first half of 2024, foundries in China, Taiwan, and South Korea are all implementing price reductions to secure orders and solidify customer relationships.

According to TechNews citing from supply chain sources, Samsung Foundry, which had not taken action previously, is expected to follow suit with price cuts in the first quarter to keep pace with competitors.

Reportedly, industry sources suggest that Samsung Foundry is adopting a price reduction strategy in the first quarter of 2024, offering discounts ranging from 5% to 15% and expressing a willingness to negotiate.

Samsung Foundry’s actions can be interpreted as a goodwill gesture towards its customers. The company has been in constant competition with TSMC, especially in processes below 5nm, and actively engaging in negotiations with customers, seeking collaboration opportunities with Qualcomm, NVIDIA, AMD and others.

Considering the subdued semiconductor market in 2023, fabs in both China and South Korea have implemented price cuts to secure orders. The price reductions for mature processes in 8-inch and 12-inch wafer reached 20-30%, while Taiwanese fabs have also made concessions in pricing.

TSMC, the leading foundry, had already been reported to offer price concessions in 2023, with the major focus on mask costs rather than foundry services. It was mentioned at that time that TSMC’s price concessions primarily applied to the 7nm process, where utilization rates were lower, and the extent of concessions depended on the volume of orders from customers.

In terms of the global foundry landscape, according to data published by TrendForce, Taiwan holds approximately 46% of global foundry capacity, followed by China (26%), South Korea (12%), the US (6%), and Japan (2%).

However, due to government incentives and subsidies promoting local production in countries like China and the US, the semiconductor production capacities of Taiwan and South Korea are projected to decrease to 41% and 10%, respectively, by 2027.

Read more

• China and US Bolster Semiconductor Independence as Taiwan’s Foundry Capacity Share Projected to Decline to 41% by 2027, Says TrendForce
• [News] TSMC to Expedite Production of NVIDIA’s Specialized Chips for China

(Photo credit: Samsung)