Amid a gradual recovery in the memory market, South Korean memory giants Samsung and SK Hynix are reportedly set to expand their equipment investments significantly next year.

Samsung aims for a 25% increase in investment, while SK Hynix plans to more than double its investment compared to this year, concurrently increasing production capacity, sparking industry attention.

According to South Korean media outlet ETNEWS, both Samsung and SK Hynix are planning to boost semiconductor equipment investments in 2024. Samsung’s investment is estimated at around KRW 27 trillion (approximately USD 20.78 billion), representing a 25% growth, while SK Hynix plans an investment of around KRW 5.3 trillion (approximately USD 4.07 billion), signaling a 100% increase from this year’s investment.

As ETNEWS’ report revealed, in addition to increasing equipment investment, Samsung and SK Hynix have also raised their production capacity targets for 2024. Samsung plans to expand both DRAM and NAND Flash production by approximately 24%, while SK Hynix aims to elevate DRAM output to levels seen by the end of 2022.

Looking at market share, according to TrendForce’s released data, in terms of third-quarter revenue figures, Samsung holds approximately 38.9% market share in DRAM, while SK Hynix stands at 34.3%.

In the NAND segment, Samsung holds approximately 31.4% market share, while SK Hynix stands at 20.2%.

Market concerns arise as the memory industry, which has recently seen relief from the long-standing oversupply pressure due to major manufacturers reducing production, faces the possibility of disruption once again. Amid the rebound in prices, the significant investments planned by the two major South Korean companies are causing apprehension that the memory industry may face new challenges.

Memory industry sources believe that despite Samsung and SK Hynix’s plans to increase semiconductor equipment investment and boost production capacity in 2024, the tool-in still take time. Improving production capacity utilization is not an instantaneous process.

Furthermore, there is a general consensus in the industry that several AI-related applications in the future will require large-capacity memory support. For instance, the expected 3% growth in global smartphone shipments (based on TrendForce’s report) next year is anticipated to contribute to the expansion of demand in the high-value memory market.

TrendForce also pointed out that recent news about memory manufacturers expanding investment and increasing production capacity is primarily driven by the growing demand in the HBM market, rather than capacity expansion for all products.

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(Photo credit: Samsung)

As TSMC, Samsung, and Intel compete fiercely in the race for 2nm advanced processes, a new wave of the “battle for crucial equipment” is simultaneously unfolding.

According to South Korean reports, ASML, the leader in semiconductor advanced lithography equipment, plans to manufacture ten equipment capable of producing 2nm chips next year, while aiming to increase its annual production capacity to 20 devices in the coming years.

Intel has secured up to six of the 10, taking the lead, while Samsung is also actively pursuing the procurement of the equipment. TSMC faces significant pressure in this competitive landscape.

South Korean tech media SamMobile has unveiled that as major semiconductor manufacturers announce plans to start producing 2nm chips in 2025, ASML is set to unveil equipment capable of manufacturing chips using the 2nm process in the coming months.

The latest extreme ultraviolet (EUV) lithography equipment is expected to increase the numerical aperture (NA) from 0.33 to 0.55. This enhancement improves the light-collecting capability of the optical system, enabling semiconductor fabs to utilize advanced patterning techniques for the production of 2nm process chips.

ASML is the sole global manufacturer of advanced EUV equipment for processes at 7nm. These equipment are not only expensive, costing several million dollars each, but they also have limited production capacity.

It has led to high demand from major semiconductor manufacturers like Samsung, Intel, and TSMC. Currently, only five chipmakers globally, including TSMC, Samsung, SK Hynix, Intel, and Micron, require EUV equipment, with TSMC accounting for 70% of EUV purchases.

Consequently, Samsung is actively pursuing collaboration and has signed a historic agreement with ASML to jointly invest KRW 1 trillion (approximately USD 755 million) in establishing a research and development facility in South Korea.

This collaboration aims to contribute to the development of Samsung’s 2nm process. Samsung plans to commence the production of 2nm process chips by the end of 2025 after acquiring the 2nm manufacturing equipment.

Samsung Electronics Vice Chairman Kyung Kye-hyun, who heads the Device Solutions Division, emphasized that the new agreement with ASML will assist Samsung in acquiring the next-generation high NA EUV equipment.

Kyung said, “Samsung has secured a priority over the High-NA equipment technology. (From the trip), I believe we created an opportunity for us to optimize the usage of High-NA technology for our production of DRAM memory chips and logic chips in the long term.”

On the Intel front, as part of its IDM 2.0 strategy, it is executing a 5 nodes in four years process development plan. Intel emphasizes that its Intel 20A process is progressing towards volume production readiness as planned, while the Intel 18A process is scheduled to test production phase in the first quarter of next year.

Facing the strong competition from Samsung and Intel, TSMC is not sitting idle. According to reports citing from Financial Times, TSMC has showcased its 2nm prototype test results to major clients like Apple and NVIDIA.

TSMC previously mentioned in its earnings call that it expects the 2nm process to enter mass production as scheduled in 2025. The company’s 2nm backside power rail solution is scheduled for the latter half of 2025, with mass production slated for 2026.

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(Photo credit: ASML)

While TSMC makes promising strides in the 2nm process, slated for mass production in 2025, rivals Samsung and Intel are making headlines with aggressive moves to secure cost-effective deals. This surge in competition for the 2nm process is intensifying.

According to CNA, experts suggest that given the escalating rivalry in the AI chip market, it is paramount to have flawless execution in the process. Despite the recent efforts from Samsung and Intel, TSMC is anticipated to clinch the lion’s share of 2nm orders.

TSMC’s 2nm process is on track for mass production in 2025, with construction underway at its first 2nm fab in the Phase 2 Expansion Area of the Baoshan Site in the Hsinchu Science Park. The tool-in is scheduled for April next year. Simultaneously, TSMC’s Kaohsiung fab is earmarked as a crucial production base for 2nm in the future.

• [News] Samsung’s Discount Strategy Challenges TSMC as the Battle for 2nm Orders Heats Up

Samsung is gearing up for mass production of its 2nm process in 2025 as well. Reports from the Financial Times indicate that, in a bid to secure orders from industry giants like NVIDIA, Samsung is contemplating discounted offerings to challenge TSMC.

Intel, in its bid to reclaim its place in the semiconductor landscape, has set an big target of advancing 5 nodes in four years. Sanjay Natarajan, Senior Vice President at Intel, revealed in a recent interview with Nikkei Asia that the company aims to commence mass production of 2nm chips in 2024, with a commitment to providing reasonably priced products. Additionally, Intel’s 18A process is poised for trial production in the first quarter of 2024.

• [News] Intel, Samsung, TSMC Race in Cutting-Edge Processes

Analysts also share the insights of the competitive landscape among the three major semiconductor players, TSMC, Samsung, and Intel. Arisa Liu, the research fellow and director at the Taiwan Industry Economics Services of Taiwan Institute of Economic Research, notes that TSMC’s 2nm is expected to adopt a gate-all-around (GAA) architecture. In contrast, Samsung has taken an early lead by introducing GAA architecture in its 3nm, aiming to outpace TSMC in the 2nm process after 1 or 2 years of adjustments.

Liu highlights the challenges facing Samsung, noting that the 3nm GAA process has exhibited unstable yields. For example, Qualcomm, a major player in mobile chip, has reverted to TSMC for production. Even with Samsung’s plans for bidding at a reduced price, it is anticipated to face difficulties in denting TSMC’s order share in the short term.

Turning attention to Intel, Liu observes that Intel’s current process technology has advanced to Intel 4 and Intel 3, which do not align with the industry’s 4nm and 3nm processes. In reality, Intel’s progress is closer to 7nm or an enhanced version thereof. Notably, Intel’s 3nm products are still estimated to be outsourced to TSMC, signaling a substantial technology gap.

TSMC’s President, C.C. Wei, has previously outlined the company’s plan to initiate mass production of the 3nm N3P process in the latter half of 2024. Notably, its performance metrics, including power, performance, area (PPA), are expected to surpass Intel’s 18A.

Liu further pointed out the news of TSMC’s clients contemplating additional foundry partners has surfaced recently. This move is primarily seen as an attempt to exert pressure on TSMC and gain negotiating leverage. Given the fierce competition in the AI chip market, it is imperative to control precision in the manufacturing process. As such, TSMC’s 2nm is anticipated to secure a significant majority of orders.

(Image: TSMC)

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With Apple’s Extended Reality (XR) headgear, Vision Pro, set to hit the market early next year, Samsung is reportedly making diligent preparations to unveil its own XR product.

According to a report from Pulse News, the English version of the Korean Daily Economic News website, data released by the United States Patent and Trademark Office (USPTO) on the 14th indicates that Samsung Display has recently filed for a new trademark, “Flex Magic,” sparking rumors that it is intended for Samsung’s next-generation XR headset.

Samsung Display mentioned in its application documents that the universal applications of its display panel include 3D Spectacles, Virtual Reality Headsets, Virtual Reality Goggles, and smart glasses. The company had also applied for the same trademark with the European Union Patent Office in November.

While filing a patent does not guarantee the release of a product, the South Korean industry believes that Samsung Electronics has made significant progress towards unveiling a new product.

Reportedly, industry insiders in South Korea reveal that Samsung has set a goal to launch an XR device early next year, potentially entering a new frontier in competition with Apple. Initially named “Galaxy Glass,” this device was originally scheduled for a later release next year.

In February of this year, Samsung Electronics officially announced its entry into the XR market in collaboration with Google and Qualcomm. It is expected that Samsung Electronics will handle hardware development, Google will manage software, and Qualcomm will provide chipsets specifically for the XR platform.

Reportedly, industry insiders in South Korea anticipate that its primary competitor, Apple’s Vision Pro, is expected to launch in the United States in March of next year, followed by expansion into other countries, with a starting price of USD 3,499.

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According to South Korean electronics industry media “The Elec,” insiders have revealed that, in the year-end organizational restructuring, Samsung Display has strengthened its existing team responsible for handling demand from Cupertino, where the corporate headquarters of Apple is located.

Reportedly, the focus was on enhancing its capability to respond to the potential release of foldable devices by Apple. This suggests that an Apple foldable device might make its debut in the coming year.

The report points out that both Samsung Display and its competitor LG Display are developing a 20.25-inch foldable display for Apple’s future products. Samsung Display’s organizational restructuring appears to be a strategic move to compete more effectively against other rivals, particularly LG Display, in an effort to secure orders for Apple’s foldable panels.

Apple is Samsung Display’s most significant customer for OLED panels, and Samsung Display is the exclusive supplier of foldable OLED panels for its parent company, Samsung Electronics. Samsung Display evidently aims to leverage the experience gained in producing foldable displays for Samsung devices to prepare for potential future orders for foldable iPhones and iPads from Apple.

However, according to the analysis released by TrendForce in the second half of this year, Apple’s development in the folding field still requires time. Apple’s foray into foldables has been tepid, to say the least.

Yet, Apple’s unwavering obsession with user experience could be the culprit. Furthermore, persistent challenges with foldable tech—think panel evenness and hinge design—might be holding them back.

But here’s the kicker: Achieving perfection with larger foldable panels is somewhat simpler than their smaller counterparts. Could this mean Apple might leapfrog right into medium-sized foldable products—like laptops or tablets? Only time will tell.

TrendForce’s insights reveal that by 2023, shipments of foldable smartphones could skyrocket to an impressive 18.3 million units, marking a 43% YoY surge. However, this only captures a slim 1.6% of the year’s total smartphone market.

Fast forward to 2024, and we’re looking at another leap—a 38% growth, translating to a hefty 25.2 million units and nudging the market share up to 2.2% Looking at the medium to long term, TrendForce believes the expansion of the foldable smartphone market is inevitable. By 2027, shipments could soar to a whopping 70 million units, seizing around 5% of the global smartphone market.

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• Foldable Smartphone Market Penetration Estimated at 1.6% in 2023, with Potential to Exceed 5% by 2027, Says TrendForce

(Photo credit: Apple)