According to a report from Bloomberg, Applied Materials Inc. pointed out that the U.S. Department of Justice (DOJ) has requested information regarding its federal grant applications, further intensifying the government’s investigation into the company’s operations.

Per a regulatory filing last week, the chip equipment manufacturer received a subpoena from the DOJ and is fully cooperating with the government. Reportedly, the company stated that the request pertains to certain federal award applications and information submitted to the federal government.

Applied Materials had applied for government support for its planned research center under the U.S. CHIPS and Science Act, which was expected to bolster local chip facilities.

Yet, per previous reports by Bloomberg and Tom’s Hardware, the company’s funding application was ultimately denied, leaving the USD 4 billion research center planned for Sunnyvale, California, underfunded.

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.

Thus, Applied Materials’ dealings with China have already been under government scrutiny. Notably, from February to April, China accounted for 43% of the total sales of Applied Materials, a 22 percentage point increase YoY.

Back in February of this year, Applied Materials had already received subpoenas from the U.S. Securities and Exchange Commission, as well as the U.S. Attorney’s Office for the District of Massachusetts, even before the DOJ subpoena, and was reportedly under investigation for allegedly sending equipment to SMIC, China’s leading chipmaker, through South Korea without export licenses.

Addressing the matter, Applied Materials did not immediately respond to requests for comment.

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• [News] Funding for Applied Materials’ USD 4 Billion R&D Center Reportedly Denied by the U.S. Government

(Photo credit: Applied Materials)

According to a report from Economic Daily News, on the evening of August 21st, Foxconn announced plans to expand its investments, increasing capital in its subsidiaries located in the U.S., Mexico, India, and Europe. The total investment amounts to roughly USD 840 million.

First, Foxconn announced earlier that its subsidiary, Cloud Network Technology USA Inc., has acquired shares of Foxconn Assembly LLC. The transaction is valued at USD 253 million.

Sources cited by the Economic Daily News suggests that this move is looking to boost the production capacity of its plant in Houston, Texas. Foxconn currently manufactures AI servers in three locations across North America: Mexico, Wisconsin, and Texas. This indicates that Texas is gradually becoming a key hub for AI server production.

Secondly, Foxconn announced that its subsidiary, Cloud Network Technology Singapore Pte. Ltd., has acquired shares of FII AMC MEXICO S. DE R.L. DE C.V. The transaction is valued at USD 241 million.

It is speculated by the Economic Daily News that this move is primarily aimed at increasing the production capacity of Foxconn’s subsidiary, FII (Foxconn Industrial Internet), in its Mexico plant.

FII previously stated that the initial production of the GB200 servers would start in Taiwan, with the related capacity already in place.

The first overseas production line for the GB200 servers is reportedly to be set up at the Mexico plant, which is already producing AI servers, with small-scale production of the GB200 expected to begin as early as the third quarter.

Thirdly, Foxconn announced that its subsidiary, Foxconn Interconnect Technology Limited, has acquired 197 million ordinary shares of Foxconn Interconnect Technology Singapore Pte. Ltd., valued at approximately EUR 180 million (roughly USD 200.53 million).

Per Economic Daily News, it is speculated that this move is related to Foxconn’s subsidiary, FIT (Foxconn Interconnect Technology), which previously announced the acquisition of shares in the German Auto-Kabel Group to strengthen its presence in the automotive electrification sector and expand its customer base.

Lastly, Foxconn announced that its subsidiary, Foxconn Singapore Pte Ltd, has acquired 1.203 billion ordinary shares of Foxconn Hon Hai Technology India Mega Development Private Limited, valued at approximately USD 144 million .

Reportedly, it is speculated that this investment aims to boost the capital of Foxconn’s Indian subsidiary.

As Foxconn is preparing for mass production of the iPhone 16 Pro and Pro Max in India, this year marks the first time Apple is integrating AI applications (Apple Intelligence) into the latest iPhone 16 Pro series.

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• [News] Foxconn Confirms Shipment of NVIDIA’s GB200 to Start in Q4 as Planned
• [News] Foxconn Remains Unfazed Despite NVIDIA’s GB200 Delay, with Customers Aim to Secure Their Orders

(Photo credit: Foxconn)

China’s export controls on antimony are set to take effect on September 15th. Furthermore, according to a report from Liberty Times Net, it is indicated that these controls could be escalated, with plans to impose additional restrictions on tungsten by the end of this year.

Addressing the matter, as per another report from CNBC, Lewis Black, CEO of Canada-based Almonty Industries, remarked that just three months ago, no one would have expected China to take such actions.

He pointed out that this move by China has unsettled many in the industry, including clients who lack backup plans—a fact that China is well aware of. Such a situation hasn’t been seen in 30 years.

Additionally, Tony Adock, executive chairman of Tungsten Metals Group, expressed that he views this as the start of broader restrictions on the export of certain rare earths and minerals. He finds it unlikely that China will stop at limiting antimony.

Per the latest annual report from the U.S. Geological Survey, in 2023, China was the world’s largest producer of antimony, with a production of 83,000 tons last year, accounting for 48% of the global supply.

On the other hand, the U.S. did not mine any commercially viable antimony. The report also noted that the U.S. has not engaged in commercial tungsten mining since 2015, with China dominating the global tungsten supply.

Tungsten, with a hardness nearly equivalent to that of diamond, is used in weapons, semiconductors, and industrial cutting tools. Both tungsten and antimony are listed as critical minerals by the U.S. government, and they are located within 10 elements of each other on the periodic table.

In response to these developments, Black’s company is said to be planning to spend at least USD 125 million later this year to reopen a tungsten mine in South Korea.

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• [News] China’s Antimony Export Restrictions Starting in Mid-September Reportedly Cause Prices to Skyrocket
• [News] China’s AMEC Sues U.S. for Blacklisting it as a Chinese Military Company

(Photo credit: iStock)

On August 16, the U.S. government announced a preliminary agreement with Texas Instruments (TI) to propose up to USD 1.6 billion in direct funding through the CHIPS and Science Act to support three 300mm semiconductor wafer fabrication plants (Fabs) under construction in Texas and Utah. Two of them (SM1 and SM2) is located in Sherman, Texas, and one (LFAB2) in Lehi, Utah.

Haviv Ilan, President and CEO of Texas Instruments, stated that the company plans to increase its internal manufacturing rate to over 95% by 2030, and is currently expanding its 300mm wafer capacity to meet customer demand for analog and embedded processing chips in the coming years.

The funds will respectively be used to build the clean room for SM1 and complete the initial production pilot line, construct the clean room for LFAB2 to start initial production, and build the shell for SM2. In addition to the funding, the U.S. government will also provide up to USD 3 billion in loans to TI.

Moreover, TI expects to receive an estimated USD 6 billion to USD 8 billion from the U.S. Department of Treasury’s Investment Tax Credit for qualified U.S. manufacturing investments, which will support the company’s investment of over USD 18 billion in building the new facilities.

Previously, TI announced the plan to spend USD 30 billion to construct up to four interconnected wafer fabs (SM1, SM2, SM3, SM4) to meet customer demand for the coming decades.

As per its 2022 plan, TI will build six new 300mm wafer fabs by 2030. Among them, RFAB2 in Richardson, Texas, and the LFAB plant acquired from Micron began production in 3Q22 and 1Q23, respectively. Two of the four Sherman plants completed construction in 2023, with the remaining two to start construction between 2026 and 2030.

Aside from the above mentioned plan, TI announced the construction of a second 300mm fab in Lehi, Utah in February 2023, which commenced construction in the second half of 2023 and is expected to start production as early as 2026.

This fab will primarily produce analog and embedded processing chips. It is adjacent to the existing 300mm wafer fab LFAB. Once completed, the two fabs will be merged into a single operation.

Looking forward, TI aims to achieve revenue of USD 45 billion by 2030, more than doubling its 2022 revenue. The company targets a compound annual growth rate (CAGR) of 7% over the next decade, compared to an average growth rate of 4% from 2010 to 2020.

To achieve this, TI has revised its capital expenditure plans, increasing its annual capital spending to USD 5 billion for 2023-2026, with capital expenditures accounting for 10%-15% of revenue after 2027.

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• [News] Nearly 40% of Major Manufacturing Projects Reportedly Face Delays under U.S. IRA and CHIPS Act
• [News] Texas Instruments Plans Large-Scale Transition of GaN Chip Production from 6-inch to 8-inch Wafers

(Photo credit: Texas Instruments)

As per a report from Economic Daily News, TSMC’s first European 12-inch fab is set to hold its groundbreaking ceremony on August 20. Along with TSMC’s ongoing projects in Japan and the U.S., the investment has amounted to nearly USD 100 billion. Meanwhile, this move is also expected to generate opportunities for supporting Taiwanese contractors.

The new TSMC facility in Dresden, Germany, is anticipated to use 28/22nm planar CMOS and 16/12nm FinFET process, with a monthly production capacity of approximately 40k 12-inch wafers.

Per TSMC’s plan, its fab in Germany will start operation by the end of 2027, with estimated costs exceeding EUR 10 billion (approximately USD 10.8 billion), creating opportunities in plant equipment and engineering sectors.

In response to the demand, Marketech International, a Taiwanese fab tool maker, has already set up offices and accommodations in Dresden in 2023 and has deployed staff there.

Additionally, Topco Scientific, a Taiwanese semiconductor materials distributor, is also said to be planning to establish a presence in Europe, with plans to set up operations in Prague, Czech Republic, about two hours’ drive from Dresden.

On the other hand, TSMC is accelerating the construction of its Kumamoto plant in Japan, with production scheduled to begin by the end of this year. This facility will be the fastest among TSMC’s new overseas fabs to start production. TSMC is also actively advancing the construction of a second Kumamoto plant.

TSMC plans to invest over USD 20 billion in its two Japanese facilities, which are expected to have a combined monthly capacity of over 100k 12-inch wafers. The plants will offer 40nm, 22/28nm, 12/16nm, and 6/7nm process.

Once operational, the Kumamoto plant is anticipated to generate significant opportunities in the semiconductor inspection sector.

MA-tek, a giant in semiconductor inspection and analysis services, is planning to expand its service at its laboratories in Nagoya and Kumamoto, while setting up a third laboratory to fully meet the needs of local semiconductor clients.

As for TSMC’s fab in Arizona, U.S., the company has planned a total capital expenditure exceeding USD 65 billion. Industry sources cited by Economic Daily News have expected that companies like United Integrated Services and Marketech International will continue to benefit from this investment.

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• [News] TSMC Reports No Major Damage to Kumamoto Plant after 7.1 Magnitude Earthquake near Kyushu, Japan
• [News] TSMC’s German Plant Reported to Break Ground in Weeks, Expected to Begin Production by Late 2027

(Photo credit: TSMC)