01
Company Trend (September 25)
TSMCs capacity maxed out
According to the latest report from Taiwan, TSMCs CoWoS advanced packaging lines are running at full capacity. While expanding its production capacity, TSMC has received more orders of AI chips from Nvidia, one of its major customers. In addition, AMD, Amazon and other big companies have placed a lot of urgent orders with TSMC. To fulfill the demand of its customers, TSMC has to urgently purchase more CoWoS equipment from equipment supplier. In addition to its existing production increase target, TSMC has increased its equipment orders by 30%.
According to industry sources, currently, TSMCs monthly capacity of CoWoS advanced packaging is approximately 12,000 units. After its previous production expansion, TSMCs monthly capacity of CoWoS will be increased to between 15,000 and 20,000 units. After installing more equipment, TSMC will increase its capacity to 25,000 units and even to 30,000 units per month.
Due to the huge orders for ITS CoWoS advanced packaging, TSMC has sought the assistance of local equipment suppliers including Scientech Corporation, AllRing-Tech, Grand Process Technology, E&R Engineering Corporation, and Group Up Industrial to provide CoWoS machines. Related equipment manufacturers not only won TSMCs original orders of machines for expanding production capacity, but now they have received more orders by up to 30%. As TSMCs H2 revenue is increasing significantly, related equipment manufacturers are holding more orders in hand, which will not be completed until H1 next year.
Comments
With the boom of AI triggered by ChatGPT, the demand for AI computing power in the domestic market is soaring at present. However, due to the shortage of CoWoS packaging capacity, TSMC cannot fulfil the demand of Nvidia for A800 and H800 chips, which drove the price rise of advanced chips.
CoWoS is a new packaging technology featuring higher integration level, lower power consumption and smaller size. However, due to its complex manufacturing process and high technical threshold, it is not widely used in the market.
Overall, TSMCs 2.5D /3D packaging technology, led by CoWoS, enhances the greatness of the AI era, and it is a key layout of TSMC to be a semiconductor leader in the era of mobile device, AI, big data, machine learning, self-driving, etc.
02
Company Trend (September 26)
Micron starts building plant in India
On September 23, Micron, a major chip manufacturer, laid the foundation for its first semiconductor plant in India, which will produce the first batch of chips in India in December 2024.
Earlier in June, Micron signed a memorandum of understanding with India to build the first semiconductor facility in Gujarat, India.
Microns investment in the Indian market has also received support from local companies. On September 23, Tata Projects, a subsidiary of Indias Tata Group, announced that, it would cooperate with Micron Technology to build an advanced chip assembly and test facility in Sanand, Gujarat. Tata Projects said that the construction of Phase 1 is scheduled to be operational by late 2024.
Micron announced that it would invest US$825 mn in the facility. With the support of the government of India and Gujarat, the total investment will be US$2.75 bn. According to the Minister for Electronics and IT, Micron, a major American memory manufacturer, plans to build several semiconductor packaging and assembly facilities in India apart from the proposed manufacturing infrastructure.
Comments
Indias semiconductor market is growing rapidly and has a promising future. In 2022, the Indian semiconductor market size was about US$ 27 bn, of which more than 90% depended on imports. With the "Make in India Initiative" increasingly moving to the middle and high-end manufacturing industry and the strategic opportunity period of "International Companies China plus one", the Indian government will inevitably continue to increase its support for its local semiconductor industry. It is estimated that Indias semiconductor market will grow at an annualized rate of more than 20% in the next few years, while the global semiconductor market is estimated to grow at a rate of less than 7%. The growth rate of Indias semiconductor market holds a safe lead among the worlds major economies.
In addition, for companies like Micron, which have been sanctioned by China and lost the Chinese market, they urgently need emerging markets like India to fill their revenue gap.
03
Company Trend (September 27)
ASML to sell EUV mask aligner to Japan
ASML, a Dutch lithography equipment manufacturer, announced a plan to establish a base for semiconductor production in Hokkaido, Japan to support the factory being built by Rapidus. According to the report, ASML is also expanding its existing support base to assist TSMC in building a wafer factory in Kumamoto, Japan. Japan has appropriated US$ 2.4 bn for the joint venture, and the Japanese Prime Minister promised to provide Rapidus with "maximum support" to maintain the normal development of the joint venture.
A spokesman for ASML said that the company would provide a customer support team for Rapidus. According to the Nikkei, ASML will arrange 50 technical personnel to assist in setting up EUV lithography equipment on the prototype line in Chitose City, Hokkaido.
It is learned that Rapidus has been supported by companies such as SONY.US and Toyota (TM.US), and plans to manufacture cutting-edge chips from scratch to seek to enter the customized and leading microchip manufacturing market. At the same time, Rapidus is lobbying chip manufacturers, suppliers and research institutions to set up factories in Hokkaido, aiming to set up a semiconductor innovation center in this region within 10 years.
Comments
For ASML, South Korea, with large semiconductor manufacturers such as Samsung Electronics and SK Hynix, contributes more than 30% of its sales volume. It is second only to Taiwan where TSMC is located (accounting for more than 40% of its sales volume). As the worlds largest manufacturer of semiconductor manufacturing equipment, ASML is responsible for the important process of "exposure" (patterning semiconductor circuits on silicon wafers). The company won the technical competition with Japanese companies such as Canon and Nikon, and exclusively produces the equipment that is essential for cutting-edge semiconductor manufacturing process.
When having difficulty in exporting equipment to China, ASML, as an equipment manufacturer serving Japan, the United States and Europe, also intends to make up for its reduced revenue in the Chinese market by deepening the relationship with customers outside China.
04
Supply&Demand Trend(September 27)
U.S. to indefinitely extend a waiver to South Korean chipmakers
According to report, the U.S. plans to indefinitely extend a waiver to South Korean chipmakers Samsung Electronics and SK Hynix to bring U.S. chip equipment into China. The U.S. Commerce Department has discussed details with the South Korean chipmakers on supplying chip equipment for China and plans to make related announcements as early as this week.
In October last year, the U.S. Government upgraded its restrictions on exports for the chip industry of China and released rules to prohibiting American companies from exporting some cutting-edge semiconductor equipment to Chinas semiconductor manufacturers. However, Samsung and SK Hynix, two South Korean companies with semiconductor plants established in China, strongly opposed the U.S. export ban and obtained a waiver from the U.S. Commerce Department to supply equipment needed for chip production in China for a year without seeking additional licenses. According to the report, considering the future plans of the two companies, the U.S. Department of Commerce allowed them to export chip making equipment to the "validated end users" in China. It is estimated that the equipment level will be higher than the export control of the U.S. and the two companies have specified the equipment to be used for their production lines in China.
Comments
According to the data of TrendForce, Samsung Electronics and SK Hynix together hold shares of nearly 70% in the global DRAM market and 50% in the NAND flash memory market as at the end of June this year, and both companies have invested billions of dollars to expand their production capacity in China. This indicates that they play a key role in the global semiconductor supply chain and are crucial in manufacturing electronic products.
It is an important decision for the U.S. to extend a waiver license to Samsung Electronics and SK Hynix, which will help maintain the stability and sustainability of the global semiconductor industry. This also reflects that semiconductor technology plays a key role in modern society and that global cooperation is indispensable for promoting technological development. It is hoped that this decision will have a positive impact on the future development of the semiconductor industry and will promote the continuous advancement of global scientific and technological innovation.
05
Trends of some domestic industries
1.Chinas first IC industry community opens(September 25)
On September 25th, the first IC industry community in China - Beijing Tongminghu IC Design Industry Community · IC WORLD ("Tongminghu IC Community") opened and the signing ceremony of the first batch of projects was held in Beijing Economic and Technological Development Zone.
The six industrial platform projects, including the high-end IC reliability analysis and testing platform of the CEPREI of the MIIT, the IC standard platform of the China Electronics Standardization Institute of the MIIT, as well as 10 industrial projects, including Primarius Technologies Co., Ltd., Empyrean Technology Co., Ltd. and Shanghai Aisinochip Electronics Technology Co., Ltd, signed together to settle in the community. The IC community project covers fields such as semiconductor manufacturing, materials, equipment and others, involving enterprises including Suzhou Dexin Chip Technology Co., Ltd., C*Core Technology Co., Ltd. andSichuan Qisai Microelectronics Co., Ltd. under Changhong Holdings Co., Limited.
Relying on the two advantages of IC equipment and manufacturing of Beijing Economic Development Zone, Tongminghu IC Community will provide chip design companies with multiple customized services such as taping out support, scenario support and policy support. The community will build a domestic leading and world-class IC design industry highland to form a trinity of industrial landscape together with the "IC manufacturing group" and the "base of equipment, material and parts" in the Economic Development Zone.
2.Two projects in Qingdao IC Industrial Park starts operation(September 26)
Recently, two projects in Qingdao IC Industrial Park have started operation, namely, the electronic control panel production base and the high-end intelligent power module (IPM) project invested and built by German Diehl Controls.
It is reported that Diehl Controls invested US$40 mn in the project, planning to build five production lines for producing and assembling electronic control panels, which will produce 5 million high-end smart home appliance controllers and panels per year.
The high-end IPM project is a key project in Qingdao in 2023, with a total investment of RMB1 bn, covering an area of 43 mu, with a total construction area of 73,700 square meters. After being put into operation, the project will produce output value of RMB1.65 bn. All products will adopt the latest generation of high-density IGBT chips and multi-functional and highly integrated driver IC self-developed by the company, achieving independent controllability from power chip, driver IC, module packaging and testing to application solutions. The high-end IPM manufacturing and power chip R&D project put into production will create homemade IPM modules with higher integration, more functions and better reliability to substitute imports and deeply integrates with local industrial chains of IC, smart home appliances and others.
3.Water quality of first homemade PVDF-UHP ultra-pure pipeline system up to standard(September 27)
The water quality of Chinas first homemade PVDF-UHP ultra-pure pipeline system has been rated to the standard in a 12-inch IC wafer fab in East China. With a complete ultra-pure pipeline control system, the product can realize the delivery, control and circulation system of ultra-pure water and electronic-grade chemicals in the wet process in semiconductor manufacturing. This project is China’s first ultra-pure PVDF-UHP pipeline, with a water volume produced exceeding 1000 T/h. The PVDF-UHP pipeline system (including valves, pipes and connectors) was independently designed and manufactured by HPRAY (Changzhou) Clean System Technology Co., Ltd. (“HPRAY").
Ultra-pure water delivery pipeline system plays a key role in guaranteeing the water quality for the semiconductor industry, which has to meet extremely strict requirements for the precipitation of metal ions, TOC, microparticles and other indicators. Previously, domestic semiconductor industry completely relied on the imported system of its kind, and the supply cycle was very long. In recent years, it even took one and a half to two years to order such system, which greatly affected the construction progress of semiconductor fabs. Due to uncertain conditions such as the shortage of goods supply and long lead time, the ultra-pure water system has been described as "jamming the artery of semiconductor manufacturing" within the industry.
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