Supply chain trends in large Semiconductor industry
As DeepSeek leads the second half of computing competition, how packaging technology transforms the rules of the AI chip game
In 2025, generative AI has set off a global technology revolution. Chinese tech company DeepSeek launched the LLM with more than hundreds of billions of parameters, which attracted wide attention and its APP was downloaded more than a hundred million times within one month since launched. DeepSeek features outstanding performance in natural language processing and image generation and even performs better than the models of OpenAI and ChatGPT when processing certain tasks. Although it opened up a brand-new technological route, DeepSeek requires much less computing power than previous models of ChatGPT and others. However, it still requires an astronomical level of computing power to train and operate such an LLM, and its training needs to consume tens of thousands of GPUs per time, which can achieve more than one trillion FLOPS.
At the moment when Moore's Law is gradually approaching its limit, AI chips are facing extreme challenges arising from memory bandwidth, chip interconnection efficiency, and others. Advanced packaging technology, as a key mean to achieve high performance AI chips, plays a more and more important role. As for supercomputing centers and data centers, AI chips often choose BGA, FC-BGA, LGA, PGA, SFP, QSFP, SiP, SoC and other advanced packaging technologies. They are critical to improve chips’ performance and reliability. With optimized packaging design, the heat dissipating performance of chips can be improved effectively. At the same time, the integration level of a chip can be increased to reduce the space, thus achieving higher computing density within a limited space.
ASMPT, as a leader of advanced package technology, boasts its TCB technology, which gradually evolves from chip to substrate (C2S) and from chip to wafer (C2W), and now it has become an ultra-precise, high throughput scalable solution. Based on the inert gas environment protection technology, ASMPT has improved the bonding stability and packaging reliability by configuring nitrogen protection mechanism on TCB. In addition, ASMPT’s Fluxless TCB technology, optimized locally based on the needs of the packaging industry in Chinese mainland, can support packaging 30um or thinner chips, which is suitable for HBM stacking and can greatly improve the yield of packaging process.
Although DeepSeek has significantly reduced the inference delay and computing power demands of models with hundreds of millions of parameters by making three breakthroughs in algorithm, the performance bottleneck of AI chips will still motivate new breakthroughs in advanced packaging technology rapidly, which in turn will generate the demands of upstream advanced packaging and packaging equipment to rise. Chinese tech companies are simultaneously making breakthroughs in algorithmic innovation and hard core technology. ASMPT is not only a supplier of advanced packaging equipment but also a key pillar of the semiconductor industry of China to move forward from “following suit” to “leading the industry”. With the evolution of quantum computing, brain-computer interface (BCI) and other technologies, the demand for computing power will grow exponentially, which will drive the growth of semiconductor demand and accelerate the development of advanced packaging technology.
The rise of DeepSeek not only shows China's strength in AI but also highlights the critical role of computing in AI development. Advanced packaging technology is becoming an important means of improving the performance of AI chips and has gradually become the focus of the industry. ASMPT's innovation in packaging technology provides a strong support for solving the performance bottleneck of AI chips and also injects new impetus into the development of domestic semiconductor industry.
Nvidia to invest US$500bn in buying US-made chips
According to the report of Financial Times, Nvidia plans to invest hundreds of billions of dollars in purchasing US-made chips over the next four years. Nvidia CEO said that the company plans to spend about US$500bn in buying electronic products over four years and most of the money will be used for buying chips made in the USA.
Currently, the latest chip designed by Nvidia and its server chips used for data centers have been fabricated at the plants of TSMC and Hon Hai Precision Industry Co., Ltd. in the USA. At the same time, Nvidia is working with companies such as TSMC and Foxconn to move its manufacturing business to the territory of the USA. When talking about whether the USA’s chip restrictions on most countries around the world will affect Nvidia, he pointed out that “there are many AI companies across the world and AI has become the mainstream. AI is not a magic technology but an incredible technology. However, it can be used for everything.”
It is worth mentioning that in the early hours of March 19 (Beijing time), Nvidia also announced that it will release “Blackwell Ultra NV72”. According to report, Blackwell Ultra NV72 will be released in H2 this year, and each node will be equipped with two upgraded Blackwell GPUs, with a high-bandwidth memory up to 288GB HBM3e, and the performance of Dense FP4 will be 15PFlops (fifteen thousand trillion times per second).
Nvidia will transfer more of its chip processes to the USA, which can reduce its dependence on the overseas supply chain and downsize the risk of supply chain interruption due to international situations and trade frictions to secure the stable supply of chips. Chip plays a core role in modern technology industry. Nvidia's procurement plan will drive related industries along the upstream and downstream supply chain to develop synergistically, like semiconductor equipment manufacturing, material supply, packaging & testing, etc., thus creating more jobs and economic growth points for the USA.
However, manufacturing chips locally in the USA may face higher manufacturing costs, including labor costs, land costs, equipment costs, and so forth. This may narrow Nvidia's profit margins to a certain degree, which need to be addressed by improving its productivity and optimizing cost structures. In addition, although the US government provides strong support for the semiconductor industry currently, future policies remain uncertain. For example, the US government may adjust its subsidy policy for the semiconductor industry or introduce new protectionist measures, which may have an impact on Nvidia's procurement plans and production activities.
Global wafer foundries list 2024
In 2024, great changes have taken place in the global wafer foundry market. According to the latest data, the total revenue of 31 wafer foundries reached RMB915.4bn in 2024, up 23% from 2023. Among the top 10 wafer foundries, SMIC shows better performance than UMC or GlobalFoundries, ranking the second place. In addition, UNT has also made a historic breakthrough, making itself one of the top 10 global wafer foundries and the 4th company listed in the top 10 wafer foundries in Chinese mainland.
SMIC ranks 2nd globally, indicating that its position in the global wafer foundry market has been significantly improved. This achievement not only shows SMIC's constant investment in technology R&D and capacity expansion but also reflects its growing competitiveness in the global semiconductor industry chain. The strong performance of SMIC will further promote the development of China's semiconductor industry and reduce dependence on foreign high-end chips.
UNT has been listed among the top 10 foundries in the world, showing the diversified development of China's semiconductor industry and the rise of emerging companies. UNT, relying on three silicon-based product lines, i.e., power device, SiC MOSFET, and BCD device, gives full play to its strength in three fields - vehicle, consumption, and industrial control, and successfully achieved a positive annual gross profit for the first time, up to approximately 1.1%. This achievement not only laid a foundation for the company's own development but also set an example for other emerging semiconductor companies.
There are four companies from Chinese mainland listed in the top 10 wafer foundries, with an overall market share of 10.87%, down slightly compared to that in 2023, but it still shows that China holds an important position in global semiconductor industry. The success of these companies will further promote the ecosystem construction of China's semiconductor industry and promote the synergistic development of the upstream and downstream companies.
With the rise of SMIC, UNT and other companies, the global wafer foundry market competition will become fiercer. This may lead to the re-allocation of market share. As a result, all companies need to continuously upgrade their technological levels and productivity to keep their competitiveness. Despite the remarkable progress, SMIC and UNT still lag behind leading companies like TSMC in terms of advanced process technology. Domestic companies need to keep investing in R&D and accelerate paces to follow advanced technology so as to participate in competition in high-end markets. The global semiconductor industry is influenced by a variety of factors, including trade policy, geopolitics, and others. SMIC, UNT and other companies have to pay close attention to the changes in the international situation and adjust their development strategies flexibly to cope with potential risks.
The changes in the global wafer foundries list in 2024 shows the strong development momentum of the semiconductor industry in Chinese mainland. The rise of SMIC and UNT not only promotes China's position in the global semiconductor industry but also lays a solid foundation for its future development. However, facing the fierce market competition and technological challenges, Chinese companies still need to keep vigilant and continue to innovate so as to achieve sustainable development.
Intel's new CEO: downsize jobs!
According to foreign report on March 18, Intel's new CEO Lip-Bu Tan plans to comprehensively reform the chip design and manufacturing business of Intel, and plans to lay off employees further! After being appointed as CEO last week, Lip-Bu Tan, told the employees at a plenary meeting that the company needed to make “tough decisions”, said an insider.
According to the insider, transforming the company's manufacturing business is one of Lip-Bu Tan's core priorities. The foundry business once produced chips only for Intel, but now it has been repurposed to produce semiconductors for external customers such as Nvidia. Over the past decade, Intel failed to make chips for smartphones and missed the surging demand for AI processors, causing its competitors Arm Holdings and Nvidia to take the dominant positions.
Insiders said that in the short term Lip-Bu Tan's goal is to improve the performance of Intel's foundry business by actively attracting new customers. Intel wafer foundry plant produces chips for companies such as Microsoft and Amazon. The company will also restart its AI server chip production plan and expand to areas beyond servers such as software, robotics, and AI foundational models. “Tan will spend a lot of time listening to customers, partners, and employees and will work closely with our leading team to prepare for the future success of the company,” an Intel spokesperson said in an announcement.
By reforming the chip design and fabricating business, Intel is expected to increase its product competitiveness and market share, especially in the AI chip field, and resume related programs to bring new growth opportunities for the company. A streamlined middle management structure will help speed up decision-making and enable Intel to have greater flexibility to respond to market changes. Lip-Bu Tan plans to enhance the operational performance of Intel's foundry services, attract key customers such as Nvidia and Broadcom, and restore Intel's status as a “world-class factory”.
However, further layoffs may give rise to employee dissatisfaction and resistance and will affect the company's internal atmosphere and employees’ morale. His reform plans may face internal resistance, especially when it comes to changes to organizational structure and staffing. Although Intel plans to enhance its foundry services, the market is full of fierce competition, and rivals like TSMC have an edge in terms of technology and customer resources. Generally, Tan's reform plan shows Intel's attempts to reinvigorate its position in the semiconductor industry through internal adjustment and business restructuring. Although the reform may bring short-term pains, it can be a critical step for Intel to recover from the predicament in the long run.
Huawei unveils its first PC CPU chip
On March 17, 2025, Huawei unveils its Hisilicon Kirin X90 CPU chip, which has been certified to Level II security rating by China Information Technology Security Evaluation Center. According to report, Kirin X90 adopts the advanced fabricating technology. With optimized multi-tasking and high-load computing capabilities, the chip’s dominant frequency, the number of its core, and the graphics processing unit have significantly improved. This chip is rendered as a desktop processor in the market and may be paired with Harmony OS. Although there is no official report on its detailed parameters, multiple sources said that Huawei's flagship notebook, MateBook XPro, will be powered by its self-developed PC processor Kirin X90.
The launch of Kirin X90 marks Huawei’s significant step forward in the field of PC chip, which is expected to break the traditional landscape of PC chip market dominated by Intel and AMD. As it is certified to Level II security and reliability rating, the chip not only enhances Huawei's product competitiveness but also strengthens its technological advantages in the areas of 5G, AI, and IoT, laying a foundation for the comprehensive layout of its future intelligent device ecosystem. In addition, the certification shows that Kirin X90 has passed rigorous validations in terms of intellectual property, fabricating, service protection and other dimensions, and it will pave a way for Huawei to enter sensitive areas such as government, business, and finance.
Despite the outstanding features of the chip, the competition in the PC chip market not only involves the performance of hardware but also relates to the software ecosystem. Huawei has to invest a lot of resources in building and perfecting the software ecosystem compatible with Kirin X90. As users have a high level of awareness and reliance on traditional PC chip brands, Huawei has to promote Kirin X90 to increase user acceptance through continuous marketing and product optimization. Moreover, as the PC chip technology is rapidly iterating in the market, Huawei shall still make more efforts in R&D to ensure that Kirin X90 and its successors can keep pace with technological developments.
A big acquisition of EDA! Empyrean Technology to buy a majority stake in Xpeedic!
According to report on March 18, Empyrean Technology announced that it plans to buy a majority stake in Shanghai based Xpeedic Technology (Xpeedic) through a mix of stock issuance and cash payment. Empyrean Technology is the leading Chinese EDA company with the largest scale, the fullest product line and the most powerful technical strength, and is committed to becoming a global leading EDA supplier involving all processes and all areas. Xpeedic is a domestic leading industrial simulation software supplier and provides simulation solutions for customers along the whole industrial chain of chip, packaging, module, interconnection to the entire machine system in terms of areas such as electromagnetic field simulation, field-circuit co-simulation, signal integrity (SI), power integrity (PI), system-level verification, and other applications.
Currently, the semiconductor industry is shifting towards design technology co-optimization (DTCO) and system technology co-optimization (STCO). The world’s top three EDA giants have accelerated their transformation to system-level optimization through strategic acquisitions, which not only reshaped their business map but also deeply affected the landscape of the EDA industry chain. For example, in January 2024, Synopsys announced the acquisition of Ansys, a global supplier of industrial simulation software. With the acquisition of Xpeedic, Empyrean Technology will create complete solutions from chips to systems apart from making up its weakness to accelerate the realization of the whole process tool system for EDA.
According to industry analysis, the products of Empyrean Technology can complement those of Xpeedic very well. After the merging, Empyrean Technology will create a series of solutions from chips to systems, including complete radio frequency EDA solution, complete storage EDA solution, complete power EDA solution, complete advanced packaging EDA solution, etc.
According to report by foreign media, TSMC is facing the risk of losing its position as a company with the largest market value in Asia and its position is likely to be taken by Tencent because investors are focusing on Tencent's AI program. Since the beginning of this year, TSMC's stock price has dropped by 11%, down together with Nvidia's stock price and other chip stocks around the world due to people’s growing concerns about the high valuation of the chip industry. Meanwhile, Tencent's stock price rose by about 30% in 2025, thus narrowing the market value gap between the Internet giant and TSMC to around US$109bn, the smallest gap since late 2023.
The financial report released this week shows that Tencent's quarterly revenue growth hit a new high since 2023, and it also announced that Tencent will significantly increase investment in its AI infrastructure. According to market analysis, with the accelerated commercialization of generative AI technology, Tencent has formed new growth poles in areas of computational resources, algorithm models and others. Although Tencent’s stock price is still 40% lower than its peak in 2021, its strategic transformation is much faster than most of its technical peers in China. If the transformation of AI technology exceeds expectations, and the semiconductor industry picks up due to its cycle, the competition for the crown of a company with the largest market value in Asia across hardware and software may present a dramatic turn. However, whether TSMC can still keep its crown will depend on both the advance speed of its 3nm/2nm advanced process nodes and the valuation reconstruction logic of the software and hardware forces under the AI wave.
编辑 | 泓明数字营销部
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