Policy Trend(Oct. 9)
U.S. agrees to grants indefinite waivers to Samsung, SK Hynix to provide equipment to China
According to Reuters, South Koreas Yonhap news agency quoted South Korean Presidents Office as saying that Samsung Electronics and SK Hynix will be allowed to ship semiconductor manufacturing equipment to their China factories without separate U.S. approvals. Earlier, it was expected that the U.S. government would extend the waivers for South Korean chipmakers and require them to obtain an approval to ship American semiconductor equipment into China. According to Yonhap news agency, the U.S. Department of Commerce is updating the list of "verified end users (VEU)", denoting which entities can receive exports of which technology, to allow Samsung and SK Hynix to keep supplying certain US chipmaking tools to their China factories. Once included in the list, a chipmaker is not required to obtain separate license for its export. SK Hynix said in a statement that it welcomes the US governments decision to extend a waiver with regard to the export control regulations, and believes the decision will contribute to the stabilization of the global semiconductor supply chain.
For a long time, a considerable part of the sales of Samsung and SK Hynix came from the Chinese market. However, the relationship between South Korean chipmakers and China is facing geopolitical pressure. South Korea relies heavily on its semiconductor sector for jobs and revenue. In the trade war of science and technology between its long-term ally, the United States and China, South Korea falls in a dilemma. In order to prevent China from obtaining advanced chips, the U.S. government has gradually expanded the restrictions on the sales of chip-related technologies. The restrictions taken by the Biden administration in October last year aroused the concern of the South Korean government, which tried to lobby in Washington to minimize the damage to its semiconductor industry. In mid-October, 2022, the two South Korean chipmakers were granted a one-year waiver to be temporarily waived from US export control, but the waiver period is going to expire. Although it is widely expected that the new waiver will be extended, there is still uncertainty over how long the waiver can last.
Company Trend(Oct. 10)
Infineon Technologies acquired a UWB chipmaker
Recently, Infineon Technologies announced the acquisition of a Zurich-based start-up 3db Access AG, a pioneer in secured low power Ultra-Wideband (UWB) technology – now positioned as a preferred IP provider for major automotive brands. 3db supplies secured, ultra-low power and high-precision integrated UWB ranging and sensing solutions. 3dbs integrated products can be applied in various fields such as provable secured access to valuable assets (vehicles, buildings), secured proof of proximity for seamless mobile payments and real-time high accuracy and precision localization of connected, and intelligent devices. The acquisition of Infineon further enhances its portfolio for secured smart access, precise positioning and enhanced sensing. Infineon now adds UWB to its connectivity product line including Wi-Fi, Bluetooth /Bluetooth Low Energy and NFC solutions. According to the planning of Infineon, the first group of IoT use cases include secured access and authentication, accurate location tracking, indoor navigation, and presence detection utilizing UWB radar implementations. Infineon will acquire 100 percent of the companys shares. The parties have agreed not to disclose the amount of the transaction.
3dbs expertise in ultra-wide band technology accelerates Infineons IoT roadmap for leveraging the market opportunities of secured, connected devices. Its combined strengths enable the UWB roll-out to meet more demands in terms of automotive, industrial and consumer IoT applications, which is the next logical step. In the dynamic UWB market, with the rapid growth of demand from many manufacturers, suppliers also make themselves stand out through their research activities. With the expertise of both parties, Infineon and 3db now will provide customers with additional benefits. In addition, 3db, as a part of Infineon, strives to enrich the secured positioning and sensing of major IoT and automotive applications. It is growing from an IP provider to an expert team with solutions by Infineons own fabs.
Market Trend(Oct. 11)
Israels semiconductor industry
Israels semiconductor industry sprouted in the 1970s and has seen the presence of major global companies and a variety of startups throughout the entire semiconductor ecosystem. In 2019, South Korea became the first Asian country to conclude a free trade agreement (FTA) with Israel, and import tariffs on semiconductor equipment were also abolished. Furthermore, South Korea has been steadily increasing its technological cooperation with Israel, aiming to reduce its dependence on imports of materials, components, and equipment in key industries from specific countries like Japan. As of 2020, Israel held a global market share of over 36 percent in the field of semiconductor measurement and inspection. However, with the outbreak of the recent Israeli-Palestinian conflict, people have concerns about the impact on the supply chains of domestic semiconductor companies such as Samsung Electronics and SK hynix. Global top equipment companies like the U.S.’KLA and Applied Materials (AMAT) have set up production facilities in Israel. In Israel, there are several manufacturing facilities of such companies with headquarters in Israel as Camtek in the semiconductor inspection equipment sector and Nova in the measurement equipment sector.
With the outbreak of recent conflict, concerns have arisen in the industry chain about the interruption of production and operation of local semiconductor enterprises. Israel is often referred to as a "Startup Nation", and is home to major global companies across the entire semiconductor ecosystem from fabless companies to component and equipment manufacturers. Therefore, it is expected that related companies will have to reevaluate their strategies in the medium to long term. In addition, there are many fabless start-ups in Israel. As Multinational companies with fabs in Israel have overseas networks, the conflict may have little impact on their production in the short term. However, fabless companies may face difficulties in designing the next generation of semiconductors.
Company Trend(Oct. 11)
TSMC sees six top customers scale up orders crazily
With TSMCs improved advanced packaging capacity and the support from the back-end packaging and testing factories out of the TSMC system, the industry optimistically believes that the disrupted AI chip supply chain will improve faster than expected, which is conducive to the continuous shipment of AI chips from Q4 of this year to next year.
Recently, Nvidias financial report meeting confirmed for the first time that it has certified other CoWoS packaging suppliers as a backup to relieve its tight production capacity. The legal person speculated that among the certified CoWoS packaging suppliers, except TSMC as the main supplier actively expanding production, will also outsource front-end parts and expand the back-end collaborative packaging and testing partners, including UMC, ASE Technology and Amkor, a U.S. major packaging and testing company.
Among them, UMC will prepare Si interposer capacity for the front-end "CoW process" and Siliconware under ASE Technology and Amkor will be responsible for WoS packaging, forming another non-TSMC CoWoS supply chain.
As the legal person pointed out, in addition to the fact that Nvidia opens up the source of suppliers and allows partners with mass production performance to join it, Changjiang Electronics, Samsung Group, Wise Road Capital/Foxconn system have also invested in related research and development of advanced packaging technology, thus promoting the demand for materials in the long term. Wah Lee has set foot in providing CoWoS materials, and TOPCO Scientific also acts as an agent for related materials.
There are many kinds of advanced semiconductor packaging technologies, and CoWoS, attracting much attention previously, has a tight production capacity. As TSMC actively expands the front-end process to open relevant new production capacity, and more customer-certified partners join in the back-end process, the tight production capacity can be improved, and the previously delayed AI chip orders are expected to be addressed smoothly, driving more demand for key components and materials. The shortage of AI chips is not caused by the shortage of chips, but by the shortage of CoWos advanced packaging capacity. TSMC tries its best to support customers, and it is expected that its technical capacity will meet customer demand in one and a half years. The current shortage of AI chips is a temporary and short-term phenomenon.
Trends of some domestic industries
1.The U.S. Department of Commerce place 42 more Chinese companies on entity list’due to selling chips to Russia(Oct. 7)
The Bureau of Industry and Security (BIS) of the U.S. Department of Commerce added 49 entities to the Entity List, 42 of which are based in the Peoples Republic of China. According to the public documents of BIS, these entities are suspected of selling the U.S.-made IC products "for providing support to Russias military and/or defense industrial base." In the conflict between Russia and Ukraine, Russia applied these microelectronic technologies to its precision-guided system of missiles and UAV. The Assistant Secretary for Export Enforcement at the U.S. Department of Commerce said that extra care should be taken when delivering items included in the Common High Priority Items List to prevent such items from being used for Russias missiles and UVA projects. The so-called Common High Priority Items List was jointly developed the the U.S. and its partners such as the European Union, U.K. and Japan, including items identified by the 6-digit Customs Code (HS). It is worth noting that BIS has identified IC products in Tier 1 of the list, covering the items of greatest concern which play key roles in producing Russias advanced guided missiles.
2.STSP becomes the only base to mass-produce 3nm chips, with a third phase expansion started(Oct. 9)
According to recent report, the leader of Taiwan, China, said at an event that the Southern Taiwan Science Park (STSP) in Tainan City is the worlds only area to mass-produce 3nm chips, and STSP has achieved output value of over NT$ 1 trillion for two consecutive years. It is reported that Phase III expansion project of STSP has started. It is estimated that the output value of Phase III park will exceed NT$ 39bn after completed in the future. STSP, one of the three major academies of sciences in Taiwan, formed enterprise clusters in the fields of optoelectronics, semiconductors, precision machinery, communication and other industries. In H1 2023, the turnover of STSP reached NT$ 677bn, up 3.81% against the trend, of which the communication and semiconductor industries drove the growth. At present, TSMC currently operates several 12-inch fabs, including Fab 14a, 14b, and 18, one 8-inch fab, and a second advanced packaging and testing plant. TSMCs 3nm N3E, N3P, N3S and other chips of advanced process node are currently produced in STSP, and its CoWoS advanced packaging plant is also located in STSP. At present, it is actively expanding its production capacity to meet the current urgent demand of AI chips.
3.Lenovo Capital invests in ChipEXT to seek development in automotive chip industry(Oct. 10)
According to data of TianYancha.com, ChipEXT Semiconductor Co., Ltd. Changed its industrial and commercial registration and added two shareholders in its register of shareholders, namely SME Development Fund Lenovo (Tianjin) Partnership (Limited Partnership) and Beijing Beikezhong Development Qihang Venture Capital Fund (Limited Partnership). Among them, the SME Development Fund Lenovo (Tianjin) Partnership (Limited Partnership) was established on December 7, 2021. The investee ChipEXT Semiconductor Co., Ltd. was founded in April 2022. It is a chip company jointly established by senior chip R&D teams and marketing teams who have been deeply engaged in the field of automotive electronics for a long time. The companys products cover a full range of automotive MCU/MPU and domain controller SoC chips, including body control, motor control, chassis control, instrument, on-board network, intelligent cockpit, etc. According to the introduction on its website, the company relies on its self-developed full process automatic automotive chip development platform to build a zero defect R&D and quality management system that can compete with European, American and Japanese automotive chip manufacturers, and has the ability to launch automotive chips with high quality and efficiency, to quickly form a product portfolio and fulfill complex product needs of customers.