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01

Company Trend(Jan. 23)

Infineon and Wolfspeed expand and extend multi-year 150mm SiCwafer supply agreement

On January 23, 2024, Munich, Germany & Durham, N.C. U.S.A, Shanghai, China - Infineon Technologies AG, a global semiconductor leader in power systems and IoT, and Wolfspeed, Inc., a global leader in SiC technology, announced the expansion and extension of their existing long-term 150mm SiC wafer supply agreement (originally signed in February 2018). After extended, the partnership will include a multi-year capacity reservation agreement. The extended agreement contributes to Infineon’s general supply chain stability, and also meets the growing demand for SiC semiconductor products for automotive, solar and EV applications and energy storage systems.
According to the CEO of Infineon Technologies, to meet growing demand for SiC devices, Infineon is implementing a multi-source strategy to secure access to a high-quality, global and long-term supply base of 150mm and 200mm SiC wafers. The president and CEO of Wolfspeed said that the industry estimates that there is a significant increase in demand for SiC devices and supporting materials until 2030, representing a business opportunity worth US$ 20bn per year.

Comments

Infineon Technologies has been working with Wolfspeed for more than 20 years. The partnership between the two companies is committed to promoting the adoption of SiC in a wide range of markets including automotive, industrial engineering and energy, and to helping customers advance their decarbonization process through this energy-efficient technology. The use of SiC-based power solutions is rapidly growing across multiple markets. SiC solutions contribute to the development of smaller, lighter, more cost-effective designs and converting energy more efficiently to introduce new clean energy applications. To better support these growing markets, Infineon is continuously diversifying its suppliers to secure access to high-quality SiC substrates. In addition, Wolfspeed is the global leader in SiC manufacturing. Wolfspeed acts as the catalyst in the industry transition to silicon carbide, providing high-quality materials to key customers like Infineon (a leading supplier in both the automotive and industrial markets) and also scaling its capacity footprint.

02

Market Trend(Jan. 24)

Chip industry to grow 13% in 2024

According to Deloitte, the chip industry is projected to rebound by 13% in 2024 to total US$ 588bn after the weak year of sales decline of 9.4% to US$ 520bn in 2023. The semiconductor industry is known for its cyclical nature, but it is always difficult to predict it. Deloitte said in its new Global Semiconductor Industry Outlook that the industry is expected to see a strong rebound in 2024.

The consulting firm highlighted several factors contributing to this optimistic outlook. Although there were challenges in 2023, the storage chip market with the main drive force is expected to rebound, with sales amount growth to the level in 2022. The positive response from the stock market is seen as a leading indicator, and by mid-December 2023, the total market value of the global top ten chip companies will increase to US$ 3.4trn. The end-market, such as PC and smartphone markets, experienced a decline in 2023 and is expected to grow by 4% in 2024. This recovery is critical to the semiconductor industry, as the sales of communications and computer chips accounted for 56% of overall semiconductor sales in 2022.

In its report, Deloitte studied key indicators on the health of the industry, including inventory and fab utilization. The chip stock level was high this fall, exceeded US$ 60bn, which was a major drag on the sales in H1 2024. According to the report, the industry has a positive trend. However, the demand for higher utilization of chips in the industry is expected to drop below 70% in Q4 2023, which means that it will take time to achieve profitability.

Comments

The executive summary outlines five key topics for the semiconductor industry in 2024: 1. Generative AI accelerator chips: These high-value chips are relatively small in size but may affect the overall manufacturing capacity and industry utilization rate; 2. Trend of smart manufacturing: Deloitte explored the trend of smart manufacturing and the industrys adoption of generative AI, and disclosed the evolving pattern of semiconductor production; 3. Global assembly and testing capabilities: The report stressed that the industry needs to improve assembly and testing capabilities globally, which is considered as key aspect of future growth of the industry. 4. IP Security and cyber-attacks: Intellectual property (IP) in the semiconductor industry has been identified as a new target of cyber-attacks, which poses a potential threat to the industry. 5. Geopolitical impacts: While Deloitte acknowledges that the semiconductor industry will develop on a positive trajectory in 2024, it also emphasizes that it is necessary to make strategic considerations in the context of geopolitical challenges and potential threats to intellectual property security.

03

Company Trend(Jan. 25)

TSMC’s wafer prices soar!

At the current stage, the market demand for chips has not recorded a historical high, but despite the market downturn, the average selling price (ASP) of TSMCs 12-inch wafers has climbed to US$ 6,611 in Q4 2023, with an annual increase up to 22%. Market analysts said that the rising price is mainly due to the improvement of TSMC’s N3 process technology. Bernstein Research also said that most of the growth of the semiconductor industry is now coming from higher pricing instead of increased chip shipments.

In other words, TSMC shipped 2.957mn units of 12-inch wafers in Q4 2023, lower than 3.702mn in Q4 2022, and it is the first time that TSMC shipped less than 3mn units of 12-inch wafers since 2020. However, TSMC’s revenue only declined slightly. Further analysis shows that although TSMCs Q4 shipments of 12-inch wafers declined 20.1% from the previous year, its revenue in the same quarter reached US$ 19.62bn, just down 1.5% from its revenue of US$ 19.93bn in Q4 2022. At the same time, the average price of a 12-inch wafer processed by TSMC rose to US$ 6,611 per unit in Q4 2023, higher than US$ 5,384 per unit in Q4 2022. This is because TSMC increased shipments of wafers at N3 process node to its customers, including Apple.

Comments

In fact, some market analysis pointed out that TSMC may charge up to US$ 20,000 per unit for wafers produced using its N3 node process. However, this figure may not be completely accurate, as TSMCs quotation depends on many factors. The key is that TSMC charges more for its N3 node than for its N4/N5 or N6/N7 nodes. Therefore, it can be said that the rising prices in TSMCs production and manufacturing of different process nodes have contributed a lot to almost all the growth of the semiconductor industry in recent years.

In the future, as time goes by, new process nodes will become more and more expensive. This is because total chip shipments actually declined from 2019 to 2023, but ASP increased significantly. This will bring more revenue growth to wafer manufacturers, and such trend can be seen clearly.

04

Company Trend(Jan. 25)

ASML’s orders soar

On Thursday, ASML, the leading lithography machine manufacturer, released its latest quarterly financial data and 2023 financial report. The CEO of ASML points out that the semiconductor industry still lies at the bottom of the cycle. Although customers are still uncertain about the recovery of the semiconductor market, some positive signals are clearly visible – the stock level at the industry end market has continuously improve, and the utilization rate of mask aligners has just increased. In addition, strong order growth in Q4 2023 also shows the future market demand.

He further points out that the storage chip market will see growth in 2024 by market segment, mainly due to the change in process nodes to meet the growing demand of advanced storage. As for the logic chip market, 2024 will see a slight decline, as the newly increased capacity of 2023 has to be digested this year, not to mention increasing capacity this year. Considering the business segments, the EUV business will grow in 2024, but the non-EUV business will decline slightly, mainly because the sales of   immersion lithography machines is predicated to be less than that in 2023, and the installed base management sales will remain the same as in 2023.  As previously stated, ASML considers 2024 to be a year of adjustment. In this year, the company will strive to expand its capacity and lay a foundation for its substantial growth in 2025.

Comments

ASML believes that 2025 will see a strong growth, mainly due to the following reasons: 1. ASML believes in the long-term development trend of the semiconductor industry. Although customers are still uncertain about the recovery of the semiconductor market, some positive signals are clearly visible, the stock level at the industry end market has continuously improve, and the utilization rate of mask aligners has just increased. 2. AI, electrification, energy transformation, etc., all need to be supported by chips; higher EUV revenue and return on investment in capacity in 2024. To this end, ASML will invest in production expansion in 2024 to meet the production demands in 2025. 3. 2025 will see an upstream cycle, and the industry will be in the boom phase; moreover, many wafer fabs plan to start operation in 2025, so they will need a lot of mask aligners.

05

Domestic Trend

WWXS raises RMB1.5bn to develop high-quality epitaxial wafer R&D project to sprint into IPO(Jan. 22)

According to the news of SEMI, on January 22, Wafer Works (Shanghai）Corporation (WWXS) officially disclosed the Letter of Intent and Shanghai STAR Market accepted its application for going public. 

(1) Low resistance single crystal growth and high quality epitaxial R&D project

The total investment of the project is RMB 775mn, and the implementing entity is Wafer Works (Zhengzhou）Corporation. The construction contents of the project mainly include plant buildings and plant supporting facilities, procurement of 12-inch epitaxial wafer growth and crystal growth related R&D equipment and testing equipment, continuously optimization mainly for its existing 8-inch and 12-inch epitaxial technology, and R&D of epitaxial technology required by CIS related products, especially 65nm-28nm epitaxial technology. In addition, the project will carry out R&D of 12-inch low resistance single crystal growth technology. After the project is completed and put into operation, WWXS will further enhance its R&D level in terms of 12-inch epitaxial technology and improve its product technology.  

(2) High-quality epitaxial wafer R&d and industrial project

The total investment of the project is RMB 188.5626mn, and the implementing entity is WWXE. The construction contents mainly include the procurement and installation of equipment related to the production of epitaxial wafers of various dimensions. After the project is completed and put into operation, WWXE will have the new annual capacities of about 180,000 units of 12-inch epitaxial wafers, about 60,000 units of 8-inch epitaxial wafers, and about 240,000 units of 6-inch epitaxial wafers.

BIWIN to mass produce its first MCU(Jan. 25)

BIWIN Storage Technology Company Limited (BIWIN) said during an investigation that it attaches great importance to technological research and innovation and recently successfully developed and released CXLDRAM memory expansion module supporting the CXL 2.0 specification. CXLDRAM can support memory capacity and bandwidth expansion, memory pooling & sharing, high bandwidth, low latency, high reliability, and can empower AI high performance computing. In addition, in terms of IC chip, BIWIN smoothly developed its first microcontroller (MCU). The MCU works properly in the bring-up stage, and BIWIN is prepared to mass produce the MCU.

The main products and services of BIWIN Storage Technology Company Limited cover embedded storage, consumer storage, industrial storage and advanced packaging, and the company has made layout in areas of chips, IC design and so forth. At present, it has mastered the advanced process production capacity of 16-lyer Die, 30~40μm ultra-thin Die, multi-chip heterogeneous integration and so on, and its technology strength has reached the international leading level. Storage chips are widely used in mobile intelligent terminals, PCs, industrial terminals, data centers, smart cars, mobile storage, and more.

BIWIN is also an authorized partner of HP, Acer and other PC enterprises in the field of retail of DIY storage products, and Acer’s Predator storage is a popular brand operated by BIWIN in the past two years.

Luxin Semiconductor starts building photomask production project with total investment of RMB 2bn(Jan. 22)

Recently, according to the report of the Wechat account of "Suzhou Industrial Park Release", Jiangsu Luxin Semiconductor Technology Co., Ltd. Laid a foundation for building its photomask production project.

It is reported that the project will invest RMB 2bn and cover an area of 74 mu (about 49,333.3 sq meters).  After completion, the project will have the production capacity of 35,000 semiconductor photomasks of 28nm process node, which can be widely used for IC semiconductor chip manufacturing and packaging in which a lot of industries such as high-performance computing, AI, mobile communication, smart grids, high-speed rail transportation and new energy vehicles involved. The project will be built in two phases. During its first phase, the project plans to produce photomasks of 45 nm and larger process nodes; during its second phase, it plans to produce photomasks of 28 nm and smaller process nodes. It is expected to achieve mass production in 2025.

It is learned that Jiangsu Luxin Semiconductor Technology Co., Ltd. was founded in Suzhou Industrial Park in May 2023，focusing on producing photomasks of 28nm, 45nm and larger process nodes. The construction of this project will further fill the gap of the photomask field of the IC industry chain of Suzhou Industrial Park.