Driven by emerging technologies like AI and high-performance computing, the semiconductor foundry industry increasingly emphasizes the importance of advanced manufacturing processes. Recently, the industry has seen significant developments. Intel announced that it has commenced large-scale production of its Intel 4 process node, while TSMC and Samsung are equally committed to advancing their advanced process technologies.

Intel’s Mass Production of Intel 4 Process Node

On October 15th, Intel China’s official public account revealed that Intel has initiated large-scale production of the Intel 4 process node using Extreme Ultraviolet Lithography (EUV) technology. According to Intel, they are making significant progress with their “Four Years, Five Nodes” plan. This plan aims to produce next-generation products that meet the computational demands driven by AI’s role in the “Siliconomy.”

Being the first process node produced by Intel using EUV lithography technology, Intel 4 offers substantial improvements in performance, efficiency, and transistor density compared to its predecessors. Intel 4 was unveiled at the Intel Innovation 2023 held in September this year.

In comparison to Intel 7, Intel 4 achieves a 2x reduction in area, providing high-performance computing (HPC) logic libraries and incorporating various innovative features.

In detail, Intel 4 simplifies the EUV lithography process, optimizing it for high-performance computing applications, supporting both low voltage (<0.65V) and high voltage (>1.1V) operations. Compared to Intel 7, Intel 4 boasts more than a 20% improvement in iso-power performance, and high-density Metal-Insulator-Metal (MIM) capacitors deliver outstanding power supply performance.

Intel 7 and Intel 4 are currently in large-scale production. Intel 3 is on track to meet its planned target by the end of 2023.

Intel’s Intel 20A and Intel 18A, which use Ribbon FET all-around gate transistors and PowerVia backside power delivery technology, are also progressing well, with a target of 2024. Intel will soon introduce the Intel 18A process design kit (PDK) for Intel Foundry Services (IFS) customers.

With the adoption of Intel 4 process nodes, the Intel Core i9 Ultra processor, codenamed “Meteor Lake,” will be released on December 14th this year, ushering in the AIPC era.

On Intel 3 process nodes, the energy-efficient E-core Sierra Forest processor will be launched in the first half of 2024, and the high-performance P-core Granite Rapids processor will follow closely.

Samsung’s 2nm Process Detailed Production Plan

Samsung has already commenced production of its second-generation 3nm chips and plans to continue focusing on 2nm chips.

On June 28th, Samsung Electronics unveiled its latest foundry technology innovations and business strategies at the 7th Samsung Foundry Forum (SFF) in 2023.

In the era of artificial intelligence, Samsung’s foundry program, based on advanced GAA process technology, offers robust support for customers in AI applications. To this end, Samsung has disclosed a detailed production plan and performance levels for its 2nm process. The plan is to achieve mass production for mobile applications by 2025 and respectively expand to HPC and automotive electronics in 2026 and 2027.

Samsung reports that the 2nm process (SF2) improves performance by 12% compared to the 3nm process (SF3), increases efficiency by 25%, and reduces the area by 5%.

Furthermore, reports indicated that Samsung is ensuring the production capacity for products using the next-generation EUV lithography machine, High-NA, in September. This equipment is expected to have a prototype by the end of this year and officially enter production next year.

TSMC’s Mass Production of 2nm by 2025

This year, TSMC has unveiled its latest advanced semiconductor manufacturing roadmap in various locations, including Santa Clara, California, and Taiwan. The roadmap covers a range of processes from 3nm to 2nm.

TSMC’s current roadmap for 3nm includes N3, N3E, N3P, N3X, and N3 AE, with N3 serving as the foundational version, N3E as an enhanced version with further cost optimization, N3P focusing on improved performance with a planned start in the second half of 2024, N3X targeting high-performance computing devices with a mass production goal in 2025, and N3 AE designed specifically for the automotive sector, offering greater reliability and the potential to shorten time-to-market by 2-3 years.

In the 2nm realm, TSMC is planning to achieve mass production of the N2 process by 2025. TSMC has reported that the N2 process will offer a 15% speed improvement over N3E at the same power or a 30% reduction in power consumption, with a 15% increase in transistor density. In September, media reports revealed that TSMC has formed a task force to accelerate 2nm pilot production and mass production, aiming for risk production next year and official mass production in 2025.

To ensure the smooth development of 2nm process technology, TSMC has initiated efforts in the upstream equipment sector. On September 12th, TSMC announced the acquisition of a 10% stake in IMS Nanofabrication, a subsidiary of Intel, for a price not exceeding $432.8 million. IMS specializes in the research and production of electron beam lithography machines, which find extensive applications in semiconductor manufacturing, optical component manufacturing, MEMS manufacturing, and more. The industry sees TSMC’s IMS acquisition as vital for developing crucial equipment and meeting the demand for 2nm process commercialization.

(Image: Intel)

As TSMC’s earnings call approaches, the market is abuzz with rumors that the company may revise down its capital expenditure target for this year. This potential adjustment is believed to be driven by delays in Intel’s 3-nanometer outsourcing and the deferral of the production schedule for TSMC’s 4-nanometer US fab. The initial capital expenditure target, which was close to the $32 billion to $36 billion range, may now be lowered to below $30 billion, marking its lowest point in nearly three years.

According to Taiwan’s Economic Daily, TSMC has refrained from commenting on these speculations. Even if TSMC does adjust its capital expenditure for this year, industry sources suggest that the company will increase its annual R&D expenses, continuing its commitment to advanced research and development.

In recent years, TSMC has rapidly expanded its capital expenditure, reaching a record high of $36.3 billion last year. In the first half of this year, the actual capital expenditure amounted to $18.11 billion, including $8.17 billion in the second quarter, slightly down from the $9.94 billion in the first quarter.

During their July earnings conference, TSMC stated that their capital expenditure for the year would remain in the range of $32 billion to $36 billion. However, considering market dynamics, the actual expenditure for the full year is expected to be towards the lower end of this range.

The latest reports suggest that due to the delays in Intel’s 3-nanometer outsourcing and the postponement of the 4-nanometer production schedule at the US fab, approximately $4 billion originally earmarked for this year’s capital expenditure may be postponed until next year, resulting in capital expenditure for this year falling below $30 billion. As for next year’s capital expenditure, it may remain on par with this year.

ASML, a leading supplier of semiconductor lithography equipment, previously revealed in its July earnings conference that there were delays in shipments of EUV equipment due to installation delays at customer factories. However, ASML maintained a robust order backlog and expects overall performance to continue growing in 2024.

Industry experts believe that the “installation delays” mentioned by ASML at that time were related to TSMC, and because of the delay in EUV equipment installation, TSMC’s capital expenditure for this year may be deferred accordingly.

Analysts in the industry suggest that if we consider TSMC’s earlier projection of capital expenditure falling within the $32 billion to $36 billion range, and subtract the actual expenses incurred in the first half of the year, the capital expenditure for the second half of the year could see a decline, estimated to be around $13.89 billion or more. If the postponement rumors materialize, second-half capital expenditure might fall below $10 billion.

TSMC Founder Morris Chang, speaking at a press conference following the TSMC sports event on the 14th, noted that countries around the world are currently building their semiconductor supply chains. In his view, Japan is a more ideal location for this, given the evolving economic landscape, Taiwan’s semiconductor manufacturing environment might lose its advantages in about 20 to 30 years.

According to a report by Taiwanese media TechNews, discussing TSMC’s global presence, Chang mentioned that about 27 to 28 years ago, it was his dream to build a TSMC fab in the United States, and at that time, establishing WaferTech was a beautiful dream. However, this dream turned into a nightmare after 2 to 3 years due to various cultural factors. But he also believes that today’s TSMC is vastly different from the company of a couple of decades ago. Whether it’s talent or technology, it has improved significantly. With proper preparation, perhaps the past dream can be realized.

Now, countries worldwide are establishing their semiconductor supply chains. So which countries have a better chance of success? Chang believes, based on past experiences, that Japan and Singapore are more ideal places. However, Singapore has limited resources, making Japan the more favorable option. Additionally, the Kyushu region in Japan offers abundant resources such as land, water, and electricity, along with a strong work culture.

Looking at TSMC’s overseas expansion, in 2020, TSMC announced its investment to build a factory in Arizona, USA, with plans to establish 4-nanometer process capabilities. Construction on the Arizona plant began in June 2021, and a groundbreaking ceremony was held in December of the same year. However, due to construction delays, the actual start of production is expected to be pushed back from the original target of late 2024 to 2025.

In comparison, TSMC’s Kumamoto fab has commenced equipment installation, and its facility progress seems to be ahead of the new plant in Arizona. In addition to their Kumamoto Fab 1, TSMC had previously indicated its consideration of building a second factory in Japan, likely to be situated near the first one.

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(Photo credit: TSMC)

According to UDN News, Taiwan’s semiconductor foundry, Powerchip Semiconductor Manufacturing Corporation (PSMC), is planning to establish a 12-inch wafer plant in Japan, with Mie Prefecture emerging as a probable location. This facility will be part of a burgeoning semiconductor hub that links up with the thriving industrial city of Nagoya and UMC’s Japanese plant, pending the approval of Japanese government subsidies. PSMC would be the second Taiwanese semiconductor giant to set up shop in Japan after this move, expanding its global presence.

PSMC has yet to officially comment on its investment in Japan or the specific site for the plant. Market observers note that PSMC’s Chairman, Frank Huang, has a track record of close collaboration with Japanese firms. From early partnerships with Elpida in producing DRAM to later contract manufacturing of ICs for Renesas, PSMC’s order books are expected to be promising in Japan.

In July of this year, PSMC announced a partnership with the Japanese financial group SBI Holdings to establish a 12-inch wafer foundry within Japan and seek official Japanese subsidies.

PSMC envisions that the Japanese foundry will utilize 22/28-nanometer manufacturing processes and incorporate advanced Wafer on Wafer stacking technology to meet the demands of the AI market. Recent reports suggest that the Japanese government has granted substantial subsidies, around 140 billion yen, for the PSMC-SBI collaboration in Japan, although PSMC refrains from commenting on this matter.

Recent reports indicate that the location of PSMC’s new facility in collaboration with SBI is likely to be in Mie Prefecture. This choice is supported by two key factors. Firstly, it’s in close proximity to the bustling industrial hub of Nagoya, offering logistical advantages for both raw materials and wafer exports. Additionally, UMC acquired Fujitsu’s 12-inch wafer plant in Kuwana City, Mie Prefecture, showcasing regional wafer expertise. This choice benefits from the industrial cluster, streamlining recruitment and material logistics for construction and production.

It is understood that PSMC’s collaboration with SBI to establish a plant in Japan will follow a similar joint-venture mode like Nexchip Semiconductor Corporation in China several years ago. PSMC will provide its expertise in constructing the plants and managing the production lines. Once everything is up and running smoothly, they will gradually reduce their involvement and may adopt a shareholding model for the Japanese wafer plant.

(Image: PSMC)