Weekly News | Supply chain trends in Semiconductor industry #170

170th of weekly news

01

The global semiconductor industry is undergoing a transition from 8-inch wafer to 12-inch wafer. NXP, the world's leading semiconductor company, has recently announced a major strategic shift to gradually close four 8-inch wafer fabs over the next 10 years and shift its production capacity to 12-inch wafer fabs. 

The four 8-inch fabs to be closed by NXP are located in Nijmegen, Netherlands, and the USA, respectively. This move is driven by the efficiency and economic benefits of 12-inch wafers. NXP has worked with VIS to establish a joint venture VSMC in Singapore and plans to invest US$7.8bn in building a 12-inch wafer fab. The 12-inch wafer fab is expected to begin mass production in 2027, targeting a monthly output of 55,000 wafers by 2029. The new fab will focus on mixed signals, power management and analog chips and will serve fields like automobiles, industrial applications, consumer electronics and others. In addition, VSMC’s technology licensing and transfer will come directly from TSMC, ensuring its technical strength and advancement. 

According to SEMI, 82 new 12-inch chip facilities and production lines will be built worldwide during 2023-2026, and the global 12-inch wafer capacity is expected to reach 9.6 million units of wafers per month by 2026. The transformation of NXP is in line with the upgrading trend of the global semiconductor industry.

To close 8-inch wafer fabs and shift to 12-inch fabs is costly in money and time. NXP has to ensure a smooth transfer of technology and production shifting during the transition process. As more and more semiconductor companies turn to 12-inch wafer production, the market competition will become ever more intense. NXP needs to continuously improve its technology and product quality to address the challenges from other competitors. The growth in demand for 12-inch wafers in high-end applications has brought new market opportunities to NXP. In particular, in the fields of automobiles, industrial applications and data centers, NXP can further expand its market share with its technological and product advantages.

NXP's strategic adjustment to close 8-inch fabs and shift to 12-inch production is an important move in its response to the global semiconductor industry's upgrade and changes in market demand. This strategic shift will help boost the company's production efficiency and profitability and further consolidate its leading position in the global semiconductor market.

02

On June 9, 2025, US chip giant Qualcomm officially announced to acquire Alphawave IP Group – UK listed company Alphawave IP Group in a deal worth US$2.4 billion (approximately RMB17.2bn). The acquisition aims to strengthen Qualcomm's competitiveness in AI data centers and high-performance interconnection technologies.

Alphawave, founded in 2017, headquartered in London, is a leading company engaged in high-bandwidth, low-power consumption interconnect chip design, and its technologies are widely used in data centers, network infrastructure, cloud computing platforms, 5G wireless infrastructure, autopilot, and solid state storage. In 2024, Alphawave earned more than US$500mn and employs around 1000 people worldwide.

According to the agreement, Qualcomm will acquire Alphawave in cash at the price of US$2.48 per share, a price that reflects a 96% premium to the stock’s closing price before the disclosure. The deal is supposed to close in Q1 2026 but will go through regulatory approval, Alphawave shareholders’ approval, and the UK high Court.

Alphawave holds a leading position in high-speed connectivity technologies (such as SerDes), which will complement the technologies of Qualcomm's Oryon CPU and Hexagon NPU and further enhance Qualcomm's overall strength in data centers and AI reasoning. This acquisition will help Qualcomm make up the gaps in high-performance interconnect technologies, allowing it to better meet the demand of AI data centers for high throughput and low latency. After the news broke, Alphawave shares jumped more than 20% on Monday, showing the market highly recognizes the deal. Compared with the overall free cash flow of Qualcomm, the acquisition amount is relatively small, but it is expected to provide long-term strategic value-added opportunities for the company.

In addition, Qualcomm's acquisition of Alphawave also reflects the global semiconductor industry's competitive landscape under the AI wave. The acquisition will provide Qualcomm with significant technical and market advantages and also provokes thoughts on the future development of UK tech industry.

03

The legal dispute between Micron and YMTC began in November 2023. Previously, YMTC filed a lawsuit against Micron for infringement of eight of YMTC's patents in the US District Court for the Northern District of California. During the hearing of the case, the two parties disclosed evidenced in accordance with a mutually agreed protection order.

In June 2025, Micron suddenly filed an urgent petition with the US Supreme Court in an attempt to overturn a previous lower court ruling. Under those prior rulings, YMTC gained access to 73 pages of Micron's confidential 3D NAND technology documentation, which includes Micron’s latest and upcoming 3D NAND device information. Micron said that these documents involve national security and should not be disclosed to Chinese company that is on the US Department of Commerce's Entity List. Micron also stated that YMTC demanded 10 times more printed pages of source code for Micron's latest-generation chips than it had for earlier-generation chips.

Micron has petitioned the Supreme Court for a “writ of mandamus”, trying to adopt unusual legal means to stop disclosing any source code or technical details to YMTC. Micron argues that the district court ignored key provisions of the protective order and therefore failed to consider national security concerns associated with disclosing sensitive semiconductor information to YMTC.

Micron’s trying to overturn the ruling seemingly protects its core technology from leakage but actually reflects its anxiety in the market competition. YMTC, a leading Chinese semiconductor storage company, has made significant progress in 3D NAND technology in recent years, which threatens Micron's market position. Micron's move may aim to slow down the technological advancement of YMTC and maintain its dominant position in the global storage chip market.

From a commercial perspective, Micron's move also reflects that it attaches great importance to intellectual property protection. However, such protection should not come at the expense of judicial justice and normal market competition. Micron's attempt to evade legal rulings under the pretext of national security is not common in international commercial disputes, and it also external questions about its motives.

04

With the rapid development of AI, the demand of high-performance chips is growing continuously. The complexity of designing and manufacturing AI chips has increased dramatically, driving the demand for advanced testing technologies and services. ASE Technology, as the world's leading semiconductor testing company, keenly captured this market trend and actively launches its advanced testing capacity to meet the testing needs of high performance AI chips.

ASE Technology plans to expand its advanced testing capacity in Taiwan, including chip probing (CP) and finished product test (FT). The company estimates that its testing business will grow twice its packaging business over 2025. It is expected that ASE Technology’s testing business will account for 19% to 20% of its ATM by the end of 2025, which will further strengthen its position in the AI chip testing market. In addition to the expansion of its capacity in Taiwan, ASE Technology also has launched advanced testing capacity in the USA, Malaysia, Singapore and other places to better meet the needs of customers worldwide.

The complexity of high-performance AI chips requires more advanced testing techniques and services. ASE Technology’s capacity layout can effectively meet the market demand for advanced testing and support the mass production of AI chips. ASE Technology's investment and technological innovation in the field of chip testing will advance the technological upgrading of the entire semiconductor testing industry and raise the industry's overall standards. By expanding advanced testing capacity and optimizing testing processes, ASE Technology can not only improve its market competitiveness but also further solidify its leading position in the global semiconductor testing market.

With the rapid development of the AI chip market, more and more testing fabs begin to expand their advanced testing capacity. Therefore, the market competition will become increasingly intense. ASE Technology needs to continuously improve its technological level and service quality to maintain its competitive advantage. To test high-performance AI chips requires more sophisticated technology and equipment support. Therefore, SAE Technology needs to continuously invest R&D resources to address technological challenges.

05

According to the official WeChat account of Chongqing Occupation Education Association, the Western IC & Industrial Software Innovation Harbor have recently reached an important milestone. At the plaque awarding ceremony of China SIA integrated circuit talent reserve base & strategic cooperation signing event held by Chongqing Vocational College of Intelligent Engineering, Seven leading semiconductor companies including Longson Zhongke, Zhongke IoT Technology Research Institute, Suzhou HYC Technology CO., LTD., Suzhou Chip Industry Technology Co., Ltd., TCL Getech, MooreElite, and Shanghai Weishu Technology Co., Ltd. signed agreements in a centralized way and became the first batch of core partners supporting the construction of the innovation harbor. 

It is learned that the Western IC & Industrial Software Innovation Harbor is an important carrier to implement the national “independent and controllable” strategy and was jointly established by the People's Government of Yongchuan District, Chongqing Municipality, Huawei Technology Co., Ltd. and Chongqing Xikai Education Technology (Group) Co., Ltd. The project is based on Chongqing Vocational College of Intelligent Engineering  and Huawei (Yongchuan) Joint Technology Innovation Center, with the planned construction land area of 213 mu (about 142,000 sq meters). It will build 10 advanced packaging & testing lines，create 1,000 software development jobs, and focus on two fields, namely IC (chip design, fabrication and testing) and industry software (CAD/CAE/EDA, industrial Internet, industrial control system). 

06

According to the official WeChat account of “Wuxi Technology”, Wuxi photonic quantum chip pilot production platform smoothly launched the first unit of 6-inch thin film lithium niobate photon chip wafer and also achieved mass production of ultra-low-loss, ultra-high-bandwidth high-performance thin film lithium niobate modulator chips.

Report said that SJTU Wuxi CHIPX broke ground at the end of 2022, and took the lead in building domestic first photon chip pilot production line. Jin Xianmin, president of SJTU Wuxi CHIPX, said that the operation of Wuxi photonic quantum pilot production platform not only marks its ability of building a full chain of “technology R&D - process verification - mass production” and means that China further improved its competitiveness in terms of independent and controllable quantum technology globally.

“A 6-inch diameter wafer can be cut into 350 chips. These heart-like chips can drive high-performance lithium niobate film modulators to operate efficiently.” The person in charge of the pilot production platform said that after reaching its design capacity, the platform will have the capacity of producing 12,000 units of thin film lithium niobate wafers per year. In the future, the platform will cooperate with more enterprises of the upstream and downstream of the industry chain, accelerate the transformation of scientific and technological results into products, and promote the substantive leap from tech R&D to industrialization of the core photonic chip devices in China.

07

According to report of the official WeChat account of “Shanghang Integrated Media”, the overall building for the phase II project of Fujian Sunwise Semiconductor Technology Co., Ltd. - the production project of high-frequency filter chips based on gallium oxide piezoelectric thin film has emerged. 

According to report, the total investment of the project is up to RMB1.68bn and the industrial plant block covers an area of 136 mu (about 90,666.67 sq meters). The project will become the world’s first ultra-wide bandgap semiconductor high frequency filter chip production line after being complete, and the first production line will achieve an annual capacity of 400 kk, with output value of about RMB1bn. After completion, it not only fills the domestic gap in the field of gallium oxide piezoelectric thin film but also drives the development of the new material industry of Shanghang County. 

Fujian Sunwise Semiconductor Technology Co., Ltd. is a high-tech enterprise with independent intellectual property rights engaged in high-frequency filter wafers and chip materials for 5G communications. Since 2005, the technical team has been developing 5G acoustic filters. It has obtained more than 100 patents in terms of OEIC and compounded monocrystalline film materials and takes a leading position in preparing RF filter piezoelectric thin film chip, a core device for 5G communication.