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01

Company Trend（August 21）

Wolfspeed to close its 6-inch SiC wafer fab

On August 21st, 2024, Wolfspeed announced its revenue over Q4 and the whole fiscal year 2024, and announced to close its 6-inch SiC wafer fab in Durham. This decision of Wolfspeed was made by evaluating its capital structure and promoting the performance of its 200mm wafer fab. According to the financial report, Wolfspeeds revenue in Q4 2024 would be about US$201mn, down from US$203mn in the same period of 2023, and its net loss reached US$174mn, up from US$113.3mn in the same period last year. The companys annual revenue was US$807mn, higher than US$759mn in 2023, but its annual loss also increased from US$329.9mn in 2023 to US$864.2mn.

The CEO of Wolfspeed pointed out that the company made progress in its 8-inch SiC wafer fab in Mohawk Valley, and the utilization rate of the fab reached 20% in June, and the manufacturing cost was significantly lower than that of the 6-inch wafer fab in Durham, which was one of the reasons why the company decided to close the latter. The company will provide more details about the fab closure plan at the next financial report meeting in November.

Comments:

First of all, from the perspective of technological evolution, this may be Wolfspeeds response to the demand of semiconductor products with higher efficiency and better performance. With the steady development of its 200mm wafer fab, the company may deem that it is no longer economical to continue investing in the older 6-inch technology, so it chooses to concentrate resources on the more advanced 200mm technology. Secondly, from the financial point of view, despite the overall decline of the automotive semiconductor market, Wolfspeed has gained increase in its electric vehicle-related business, up 100% YoY. In addition, Wolfspeed has also made progress in expanding production scale and increasing market share, but its continuous losses indicate that the company needs to optimize its operations. As a result, to close the inefficient facilities may be a way of the company to reduce costs and improve profitability. This decision may generate some costs for the company in the short term, but it may help the company achieve financial stability and growth in the long run.

02

Market Trend（August 22）

Malaysia’s chip ambitions

Infineon, a chip maker in Europe, recently joined the list of companies investing in Malaysias booming semiconductor industry. Earlier this month, Infineon announced that it would invest US$8bn in building a power semiconductor fab in Kulim, Malaysia, and it will eventually create 4,000 jobs. Apart from Infineon, Intel recently invested US$7bn to expand its business in this country. Other companies such as Micron, AT&S and Texas Instruments(TI) have also recently invested in the country or expanded their business here.

With a population of 34 million, Malaysia’s yield of semiconductor products accounts for 7% of the global output and its chip assembly, testing and packaging business account for 13% of global output. According to a recent press release issued by the Malaysian Investment and Development Agency (MIDA), six of the 12 largest semiconductor giants in the world currently operate in Malaysia.

Last year, Penang alone attracted foreign direct investment of US$12.8bn, which is higher than the total over the previous seven years. The government of Malaysia is making efforts to benefit from geopolitical realities. As part of the National Semiconductor Strategy (NSS), Malaysia plans to establish ten local design and advanced chip manufacturing companies, which will generate an annual income of at least US$210mn. In addition, it also plans to establish more than 100 semiconductor-related companies, with an annual income of US$210mn.

Comments:

Malaysia is one of the countries which own complete semiconductor manufacturing supply chain. The country has established a strong influence in the field of chip assembly, packaging and testing, creating favorable conditions for the country to attract more investment and expand its position in the semiconductor industry. Even if Malaysia faces favorable market conditions, it still needs to meet some challenges. Although Malaysia has fully equipped manufacturing infrastructure, it still needs to invest more in advanced manufacturing equipment and special environment (such as clean room) and upgrade its technology. In addition, Malaysia should strengthen international cooperation with major countries and suppliers, especially in terms of technology transfer and R&D, thus addressing the shortage of skilled professionals engaged in high-tech industry.

03

Policy Trend（August 22）

China imposes new export controls on minerals critical to chip manufacture, which may cause chip prices to rise

China announced to impose new export controls over antimony (a metal used for manufacturing semiconductor) from September 15, 2024. According to DigiTimes, from now on, export of antimony of all forms will require approvals from the government, which may affect the global market, because China supplies nearly half of the worlds antimony. The new export regulations will cover all kinds of antimony-related products, including raw ore, metal and compounds such as antimony oxides and hydrides. They also extend to high-tech materials used in semiconductor manufacture, such as indium antimonide, superhard materials, such as synthetic diamonds and cubic boron nitride, and the technologies required to produce them.

For this, people are increasingly worried about the shortage of antimony supply. In May 2024, a report by Project Blue estimated that there is a global shortage of about 10,000 tons of antimony, and sanctions against Russia disrupted its antimony production and aggravated this gap. This shortage has increased the dependence on alternative suppliers from Tajikistan, Vietnam and Myanmar.

Comments:

The significance of antimony lies in its unique properties, which makes it essential for the production of hardened alloys for weapons and a critical material used in semiconductors, displays and flame retardants. China controls about 50% of antimony supply. China’s dominant position in the global antimony market indicates that its export measures will affect all markets that rely on antimony. According to the Ministry of Commerce of China, these measures are in line with international norms and are not targeted at any specific country or region. According to China’s Commerce Ministry spokesperson, the export controls are aimed at ensuring the security and stability of the global supply chain and preventing foreign abuse that may threaten Chinas interests.

With the new export controls of China coming into effect, market analysts predict that the price of antimony will rise sharply. European refineries and other global consumers have sought to diversify their supply sources to reduce their dependence on China. However, considering Chinas latest export controls, their efforts may still fail to prevent the antimony price from rising.

04

Company Trend（August 20）

TSMC applied for disclosing the patent of "Dual-port SRAM Cell Circuit"

On August 20, 2024, TSMC applied for disclosing a patent of "Dual-port SRAM Cell Circuit” with the patent number of CN118522327A, which was applied on April 22, 2024.
The SRAM circuit design of this patent features a Vdd node and the first and the second SRAM cell pairs with the same structure, wherein the first SRAM cell is a ten-transistor SRAM cell, including a pull-up transistor, a pull-down transistor, a transmission gate transistor, a P-type isolation transistor, etc. The circuit is also composed of a read bit line shared with the second SRAM cell and a write bit line pair connected to the C grid of the first transmission gate transistor and the second transmission gate transistor, which aims to improve the read/write speed of SRAM cells in IC and solve the RC delay caused by scale reduction, thus meeting the higher requirements for IC speed.

In addition, TSMC mentioned in the patent abstract that the P-type isolation transistor in the dual-port SRAM circuit design includes a first source electrode/drain region connected to the drain region of the first pull-up transistor and a grid connected to the Vdd node.

Comments:

This innovative patented design proposed by TSMC shows that the company has continuous innovation and R&D strength in the field of semiconductor storage technology, and reflects that it holds a leading position in advancing the boundary of semiconductor technology. By optimizing the design of SRAM cell, TSMC not only improves the speed and efficiency of data storage, but also solves a series of technical problems due to the downscale of technology nodes. At the same time, it improves the efficiency of SRAM cell and meets the market demand for high-performance memory. The disclosure of this patent not only increases TSMCs technical barriers in the semiconductor industry but also further consolidates its leading position in the global semiconductor market. Moreover, it may stimulate more exploration and innovation of high-performance storage solutions in the industry and push forward the development of the entire semiconductor technology.

05

Domestic News（August 20）

TSMC started building its first European 12-in wafer fab in Germany

On August 20th, a groundbreaking ceremony was held for TSMCs first European 12-inch wafer fab. According to report, TSMC’s first European wafer fab, ESMC, is located in Dresden, Germany, adjacent to the fabs of Robert Bosch GmbH and Infineon Technologies AG. In August last year, TSMC joined hands with global semiconductor giants such as Robert Bosch GmbH, Infineon Technologies AG and NXP Semiconductors N.V. to establish this joint venture, aiming to provide advanced semiconductor manufacturing services for vehicles and industries. When the fab is put into operation, it is expected to have a monthly production capacity of 40,000 300mm (12-inch) wafers on TSMC’s 28/22nm planar CMOS and 16/12nm FinFET process technology.

TSMC expects that the plant will be officially put into operation by the end of 2027 to meet the growing demand for high-end chips in Europe and the world. ESMC estimated that the cost of the fab exceeds €10bn. TSMC holds 70% of its equity and is responsible for its operation while Bosch, Infineon and NXP each holds 10% of its equity.

06

Domestic News（August 20）

Sino-Korean Semiconductor Fund project settled in Wuxi High-tech Zone

According to the news from the official WeChat account of "Wuxi Finance Online", the signing ceremony of the Sino-Korean Semiconductor Fund project was officially held on August 20.
It is said that the total scale of the Sino-Korean Semiconductor Fund is RMB1bn (about US$140mn), jointly funded by Wuxi High-tech Zone, industrial groups, and Wuxi Junhai Xichan Capital Management Company. The Sino-Korean Semiconductor Fund aims to guide leading South Korean semiconductor companies to implement industrial projects in Wuxi, and to help South Korean companies achieve industrialization and capitalization in Wuxi through fund investments.

Since the start of the cooperation negotiations, the Sino-Korean Semiconductor Fund has actively promoted a number of high-quality South Korean projects to connect and negotiate with Wuxi High-tech Zone, covering semiconductor materials, parts & components, precision manufacturing, high-end testing equipment, etc. The Nextin and Gigalane projects have successfully settled in Wuxi High-tech Zone. With the signing of the fund projects, a number of projects to be invested by the fund will also be rapidly implemented, and they will inject new energy into the core competitiveness of the IC industry in Wuxi High-tech Zone.

07

Domestic News（August 22）

The phase II project of Hua Hong (Wuxi) ushered in the first batch of equipment, estimated to start production at the end of the year

According to the news of the official WeChat account of Hua Hong Hongli, on August 22nd, Hua Hong Groups Wuxi project ushered in a major node, i.e., the first batch of equipment moved in for its phase II project. It marks that the construction of the phase II of the IC R&D and manufacturing base of Hua Hong (Wuxi) has entered a new stage, laying a solid foundation for completing the project and starting tapeout by the end of the year.

It is reported that the phase II project of Hua Hong Wuxi (Hua Hong No.9 fab) focuses on the manufacturing of automotive-grade power chips and plans to build a 12-inch special process production line with a monthly capacity of 83,000 units, and the total investment of the phase II project is up to USD6.7bn. After the completion of the project, the total monthly production capacity of Hua Hong Wuxi IC R&D and manufacturing base will reach about 180,000 units. At present, the project is under construction and the equipment is being installed. It is expected that the project will be put into trial production before the end of 2024.

According to Hua Hong Hongli, Hua Hong will adhere to the development strategy of "8+12" and advanced "special IC + Power", make full use of its differentiated advantages of special technology, strengthen the high level special technology, improve the quality level of special technology, and forge new quality productive forces, and make more contributions to realizing scientific and technological innovation and sustainable development of IC industry system.