Driven by AI-driven demand for optical communication and ASICs, Marvell, a major network IC design company, is accelerating its AI-related business. According to a report from Commercial Times, the revenue from this segment is expected to grow from USD 200 million in fiscal year 2023 to USD 550 million in fiscal year 2024.

Marvell previously announced plans to utilize TSMC’s process technology to produce a 2-nanometer chip optimized for accelerating infrastructure. Reports suggest that TSMC will be a primary beneficiary of Marvell’s chip fabrication business.

“The 2nm platform will enable Marvell to deliver highly differentiated analog, mixed-signal, and foundational IP to build accelerated infrastructure capable of delivering on the promise of AI. Our partnership with TSMC on our 5nm, 3nm and now 2nm platforms has been instrumental in helping Marvell expand the boundaries of what can be achieved in silicon,” said Sandeep Bharathi, chief development officer at Marvell, in Marvell’s previous press release.

In addition, Marvell holds a high market share in the global optical communication digital signal processor (DSP) field. Marvell pointed out that AI has accelerated the rate of transmission speed upgrades, reducing the doubling cycle from 4 years to 2 years, thereby driving rapid growth in the company’s performance.

During Marvell AI Day, company management expressed optimism about its AI business outlook and shared the positive news of receiving AI chip orders from large technology companies. At the time, industry sources have speculated that this customer could be Microsoft.

Marvell CEO Matt Murphy revealed that the company has acquired its third AI hyperscale customer and is developing an AI accelerator slated for production in 2026. These orders encompass customized AI training accelerators and AI inference accelerators for Customer A, a customized Arm architecture CPU for Customer B, and a new customized AI accelerator for Customer C.

Marvell indicates that the AI training accelerators for Customer A and the Arm architecture CPU for Customer B are currently in the ramp-up phase for production. The AI inference accelerator for Customer A and the AI accelerator for Customer C are scheduled for production in 2025 and 2026, respectively.

The report cites sources indicating that Marvell’s customer B is Google, and the Arm-based CPU in question is the recently unveiled Google Axion. However, Marvell has not responded to this information.

Marvell highlighted advancements in chip technology, including advanced packaging techniques that integrate multiple chips.

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• [News] The Imminent Arrival of 2-Nanometer Advanced Process
• [News]The 2nm Semiconductor Foundry Race Between TSMC, Samsung, Rapidus Begins with an Equipment Battle

(Photo credit: TSMC)

The US government announced on April 15th that it will provide up to USD 6.4 billion in subsidies to South Korean semiconductor giant Samsung Electronics for expanding advanced chip production capacity at its Texas plant.

The US government previously approved subsidies of up to USD 8.5 billion for US chip giant Intel and USD 6.6 billion for TSMC to alleviate future semiconductor supply constraints. Semiconductors are currently considered the lifeblood of the global economy.

The Department of Commerce stated in a release, “…the U.S. Department of Commerce and Samsung Electronics (Samsung) have signed a non-binding preliminary memorandum of terms (PMT) to provide up to $6.4 billion in direct funding under the CHIPS and Science Act.”

The statement also mentioned that Samsung Electronics is expected to “invest more than $40 billion dollars in the region in the coming years, and the proposed investment would support the creation of over 20,000 jobs.”

US officials told reporters that this subsidy from the “Chips and Science Act” would assist Samsung Electronics in expanding chip production for use in aerospace, defense, and automotive industries, enhancing US national security.

Lael Brainard, the Director of the White House National Economic Council, emphasized that the resurgence of advanced chip manufacturing in the United States signifies a significant milestone for the domestic semiconductor industry.

US Commerce Secretary Gina Raimondo indicated that this subsidy would support two chip production facilities, one R&D fab, and one advanced packaging facility. She mentioned that this subsidy would also help Samsung expand its semiconductor facility in Austin, Texas.

Raimondo further stated, “…this proposed funding advances America’s leadership in semiconductor manufacturing on the world stage.”

Previously, the U.S. government announced that Intel would receive USD 8.5 billion in federal subsidies and USD 11 billion in loans. Intel is planning to invest USD 100 billion across four states in the U.S. for building and expanding fabs, and is also seeking an additional USD 25 billion in tax credits.

On the other hand, US administration is set to provide USD 6.6 billion in aid to TSMC, which plans to build a third chip plant in Arizona with a total investment of USD 65 billion.

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• [News] The US Administration Rumored to Announce USD 7 Billion Grant for Samsung to Boost Chip Capacity
• [News] TSMC Receives USD 6.6 Billion for Chipmaking from the US Government, Commits to Constructing Third Fab

According to a report from Nikkei News, under the decisive leadership of late Chairman Lee Kun-hee, South Korean company Samsung Electronics had continuously grown and expanded. However, as per the same report, with current leadership showing reluctance to take risks, Samsung has fallen behind competitors like Apple and TSMC.

Under the leadership of late Chairman Lee Kun-hee, Samsung consistently adjusted its product portfolio and reorganized its businesses, becoming a global leader in areas such as TVs, chips, displays, and mobile phones during the 2000s. However, in the decade, Samsung’s revenue and operating profit have remained largely flat, highlighting internal structural issues and a lack of reform.

Reportedly, a Samsung researcher proposed a plan to enhance chip production yield but was told by the supervisor that the proposal cannot be approved without prior examples.

The researcher explained that the reason pursuing this idea specifically is because there were no precedents to follow. Additionally, despite receiving top compensation at Samsung, the same researcher has claimed to be unable to pursue its desired work in recent years.

Most senior managers at Samsung are hired on an annual basis, and those who fail to produce results quickly will not be renewed. In this cutthroat environment, managers urge subordinates to deliver results quickly, leaving engineers with little time to dedicate to research and development projects.

A South Korean engineer who transitioned from Samsung to SK Hynix expressed that compared to Samsung’s elite culture that does not tolerate failure, SK Hynix’s corporate culture encourages employees on the front lines to face new challenges. They emphasized that SK Hynix can’t compete with Samsung without actively adopting new ideas.

Reportedly, this organizational culture at SK Hynix has yielded results in the high-bandwidth memory (HBM) market, with close ties to NVIDIA, surpassing Samsung’s advantages. Samsung has held the top spot in the global DRAM market for over 30 years but faced setbacks due to misjudging the prospects of AI.

Per TrendForce’s data, the three major HBM manufacturers held market shares are as follows: In 2023, SK Hynix and Samsung each held around 47.5%, while Micron’s share was roughly 5%. Still, forecasts indicate that SK Hynix’s market share in 2024 will increase to 52.5%, while Samsung’s will decrease to 42.4%.

Samsung’s declining competitiveness extends beyond memory. The company’s smartphone shipments led globally for over a decade but were surpassed by Apple last year. The reduction in Samsung’s smartphone shipments has also affected the sales of Samsung products used in phones, such as chips and displays.

On the other hand, Samsung set a goal in 2019 to become a global leader in system chips by 2030, but it has consistently lagged behind TSMC. Additionally, with the U.S. government seeking to bring chip manufacturing back to American soil, Intel is also entering the foundry business, putting Samsung under pressure from both TSMC and Intel.

According to TrendForce’s previous report on the fourth quarter of 2023, global semiconductor foundry revenue rankings showed that Intel Foundry Services (IFS), which ranked ninth globally in the third quarter of 2023, was pushed out of the top ten by PSMC and Nexchip due to factors such as the transition between old and new CPU generations and lackluster inventory momentum. At the same time, the top three semiconductor foundries globally were TSMC, Samsung, and GlobalFoundries.

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• [News] Samsung Reportedly Commits to Advanced Packaging, Targets Over USD100 Million in Related Revenue This Year
• [News] Samsung Reportedly Establishes New HBM Team, Looking to Improve AI Chip Yield

(Photo credit: Samsung)

TSMC, the leading semiconductor foundry, recently announced plans to establish a 2nm production line in the US, while attention remains on expansion progress in Taiwan.

According to a report from MoneyDJ, it has indicated that the 2nm fab in Hsinchu’s Baoshan is proceeding steadily as planned, and the 2nm fab in Kaohsiung is gaining momentum, with the first tool-in expected by year-end.

Initially, both fabs will achieve a monthly capacity of approximately 30,000 to 35,000 wafers. By 2027, their combined capacity is set to exceed 100,000 wafers, marking the mainstream transition to the next generation of processes.

As per industry sources cited by MoneyDJ, TSMC’s 2nm production bases are located in Hsinchu Science Park and Kaohsiung, and Baoshan’s Phase 2 will begin tool-in in the second quarter, with a “mini line” to be established by year-end and mass production targeted for Q4 2025, starting with an initial monthly capacity of approximately 30,000 to 35,000 wafers.

Meanwhile, the Kaohsiung plant is expected to commence equipment installation by year-end, ahead of the original schedule, aiming for mass production in the first half of 2026 with an initial monthly capacity plan similar to Baoshan’s 30,000 to 35,000 wafers.

The same sources also indicate that after the formal mass production of the Baoshan and Kaohsiung plants, they will enter the capacity ramp-up phase, aiming to achieve a combined capacity of around 110,000 to 120,000 wafers per month by 2027. Both fabs will produce the first-generation 2nm and the second-generation N2P with backside power rail technology. The next-generation 1.4nm (A14) is expected to commence production in the second half of 2027, potentially located in Taichung.

In the 2nm client landscape, Apple remains a frontrunner, earmarking the technology for flagship smartphones. Intel has also expressed interest, with AMD, NVIDIA, and MediaTek expected to follow suit.

Looking at the process roadmap, this year’s iPhone 16 will use N3E, while next year’s model will adopt N3P. Thus, the first consumer product leveraging TSMC’s 2nm process is anticipated to launch in 2026.

Previously at its earnings call, TSMC disclosed the development of a backside power rail solution for N2, tailored for HPC applications.

TSMC is scheduled to hold an earnings call on April 18th. It is anticipated that the related topics around its 2nm process will also be the focus of attention on the day of the conference.

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• [News] TSMC Receives USD 6.6 Billion for Chipmaking from the US Government, Commits to Constructing Third Fab
• [News] TSMC’s Latest Statement Indicates Equipment Largely Recovered, Revenue Forecast Unchange

(Photo credit: TSMC)

According to a report by Nikkei News, Japan’s official support for the semiconductor industry expenditure, relative to its gross domestic product (GDP), is significantly higher than that of the United States and other major Western countries.

Figures submitted by a subcommittee under Japan’s Ministry of Finance’s Fiscal System Council show that Japan will invest JPY 3.9 trillion (approximately USD 25.7 billion) over the next three years, equivalent to 0.71% of its GDP. In comparison, the United States will invest more, with JPY 7.1 trillion over five years, but this represents only 0.21% of its GDP, less than one-third of Japan’s ratio.

Over the next five years, France’s expenditure amounts to JPY 700 billion, equivalent to 0.2% of its GDP. Germany’s expenditure stands at JPY 2.5 trillion, equivalent to 0.41% of its GDP.

On Monday, the U.S. Department of Commerce announced a direct subsidy of up to USD 6.6 billion to TSMC, aiming to attract more investments from TSMC within the United States. Meanwhile, in Japan, TSMC secured approximately JPY 1.2 trillion (USD 7.5 billion).

Nikkei notes that Japan’s JPY 3.9 trillion investment in the semiconductor industry involves supplementary budgets, leading to a sharp increase in spending. Thus, the Ministry of Finance is concerned about the lack of funding sources for official support of semiconductor manufacturing. According to Nikkei News, only over JPY 500 billion of Japan’s semiconductor industry expenditures have been covered by actual funds.

One funding source is GX bonds, which the government has started issuing for economic green transformation to achieve net-zero emissions by 2050. GX bonds are expected to raise approximately JPY 20 trillion over the next decade, to be repaid using carbon tax revenue.

TrendForce has previously reported that Japan’s resurgence in the semiconductor arena is palpable, with the Ministry of Economy, Trade, and Industry fostering multi-faceted collaborations with the private sector. With a favorable exchange rate policy aiding factory construction and investments, the future looks bright for exports.

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• [News] TSMC Receives USD 6.6 Billion for Chipmaking from the US Government, Commits to Constructing Third Fab
• [News] Subsidies to TSMC from Japan and China Increase Over Fivefold Annually

(Photo credit: TSMC)