Weekly News | Supply chain trends in Semiconductor industry #132

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Weekly News | Supply chain trends in Semiconductor industry #132

泓明链动产业

2024-08-19

132th of weekly news

Supply chain trends in large Semiconductor industry

Domestic News（August 14）

Huashi Semiconductor Project Phase I ushers in ending stage

According to the report of Liuyang Daily, the phase I of the new materials R&D and testing production base project of Changsha Huashi Semiconductor Co., Ltd. ushers in its ending stage. This project, located in Liuyang Economic Development Zone, covering a total construction area of about 65,000 square meters, is composed of two production workshops, one test building and one canteen. The new semiconductor materials R&D and testing production line under construction will fill the gap of the industrial field in China. At present, the tail-in work such as indoor and outdoor decorations, electromechanical and fire-fighting equipment debugging is being advanced in an orderly manner, and it is expected that the production line will be put into production in Q4.

After the phase I of the project is completed and put into production, its annual output value can reach RMB1bn (about USD139.6mn). For phase II of the project, eight production workshops, one canteen and one shift dormitory will be built. After the project is fully completed and put into production, it is estimated that its annual output value will reach RMB2bn (about US$279.2mn), with annual profit and tax of more than RMB200mn (US$27.9mn). At the same time, it can provide jobs for 500 people. The establishment of Huashi Semiconductor and the construction of this project indicate that China has made important progress in new semiconductor materials and special equipment industry, which will promote the development of related high-tech fields and provide new impetus for regional economic growth.

Domestic News（August 13）

Nexchip released Semi-annual Financial Report 2024

On August 13th, Nexchip released its financial report over H1 2024, which shows that the company achieved an operating revenue of RMB4.398bn(about US$613.9mn) during the reporting period, up 48.09% YoY. In addition, the net profit attributable to the shareholders of the listed company reached RMB187mn (USD26.1mn), turning losses into gains. The revenue achievement of the company was benefited from its rapid growth of product sales and the gradual recovery of the industry, especially from the recovery of the demands of AI and consumer electronics.

The company also emphasized that CIS (COMS image sensor) has become the second largest product line, and its 55nm mid and high-end BSI (back side Illuminated) and stacked CIS chips have been mass-produced. Especially, its CIS chip can reach 50 million pixels and has successfully entered the mid and high-end mobile phone market. In terms of R&D progress, Nexchip said that it will continue to increase R&D investment and focus on core technologies. In H1 this year, the company invested RMB614mn (about US$85.7mn) in R&D, up 22.27% YoY, accounting for 13.97% of its operating revenue, and obtained 151 invention patents and 36 utility model patents.

Domestic News（August 12）

Hubei Xiandao Electronic Information Industrial Park phase I project to start trial production in October

According to Hubei Daily, the first phase of Hubei Xiandao Electronic Information Industrial Park is being built rapidly. At present, 35 individual buildings have been erected, and some equipment have moved in the workshops one after another. It is expected that the project will start trial production in October this year, which marks the great progress of Jingzhou City in the field of semiconductor materials. The total investment in the phase I of the project is up to RMB4.05bn (about US$565.2mn), focusing on the construction of electronic information-purpose materials and rare metal recycling projects. The annual output value of the overall project is estimated to reach RMB6bn to 7bn (about US$837.6mn to 977.2mn) which will inject new energy into the high-quality development of the local economy of Jingzhou City.

Vital Materials Co., Ltd., as a leading enterprise in the global rare scattered metal industry, chose to invest in Jingzhou City to build Hubei Xiandao Electronic Information Industrial Park, not only due to Jingzhou's superior geographical advantages and abundant chemical raw materials, but also due to the strong support of the local government in terms of supply of key materials, fund cooperation, aids and supports. The rapid progress of the project benefited from the positive response of the local government and the project secretary, because they provided an important guarantee for the construction of the project. With the completion of the phase I project and the start of its trial production, Jingzhou will significantly improve its competitiveness in the new semiconductor material industry.

Domestic News（August 13）

JSSI’s Yangzhou wafer chiplet advanced packaging plant capped

On August 13th, Jiangsu Silicon Integrity Semiconductor Technology Co., Ltd.(JSSI) announced that its Yangzhou wafer chiplet advanced packaging plant ushered in an important milestone on August 8th - the main structure of the project was capped smoothly! After eight months of construction, JSSI’s Yangzhou base will be put into operation soon, and it focuses on cutting-edge advanced packaging technologies such as 2.5D/3D, which will significantly enhance the company's market competitiveness in the field of advanced packaging. The plant not only represents the most cutting-edge technology of the industry but also will open up a broader market space for JSSI by means of its efficient intelligent manufacturing process, exquisite process control and continuous technological innovation capability. At the capping ceremony, Zhang Guodong, Chairman of JSSI, stressed that the company would continue to insist on innovation, improve the technical level, provide customers with better products and services, and make contributions to the development of the IC industry.

JSSI, as an IC company located in Nanjing and dedicated to high-end packaging and testing, is providing customers with packaging product design and services for Bumping, WLCSP, Flip Chip PKG, QFN, BGA, SIP, SIP-LGA and 2.5D.

Company Trend（August 13）

Swedish epitaxial specialist SweGaN announced to deliver GaN products

On August 13th, Swedish epitaxial specialist SweGaN announced that its new GaN on SiC wafer plant has started delivering products, which are mainly used for high power RF applications for next generation 5G Advanced networks. This new plant is located at Linkoping, Sweden and has an annual production capacity of 40,000 units of 4/6-inch SiC-based GaN epitaxial wafers since it started construction in March 2023. SweGaN's initiative marks its formal transformation from a fabless designer to a semiconductor manufacturer.

SweGaN has patented technology in its QuanFINE buffer-free SiC-based GaN material, which is especially suitable for high efficiency and thermal management requirements in 5G Advanced technology and national defense applications. In H1 this year, SweGaN signed important supply agreements with a number of undisclosed telecommunication and defense companies, and received doubled orders, up to SEK17mn. In addition, SweGaN also completed the customer qualification certification plan for its first QuanFINE epitaxial wafer.

With the new production facilities put into operation, SweGaN will strengthen its competitive position in the market of high-performance semiconductor materials and is expected to further expand its production scale and market share.

Comments:

The development of SweGaN is of great significance to the global semiconductor industry. GaN, as a new type of semiconductor material, is gradually becoming a key material in the fields of 5G communication and national defense technology due to its advantages in terms of high frequency, high efficiency and high temperature resistance. SweGaN’s delivery of products not only shows its technical strength and market competitiveness in the field of semiconductor manufacturing but also reflects the urgent demand for high-performance GaN materials around the world. With the continuous progress of 5G technology and the expanded application in key fields like national defense, SweGaN's QuanFINE is expected to take an important position in the semiconductor market in the future and will promote technological innovation and upgrading in related industries. At the same time, it will also provide valuable market opportunities and development orientation for other semiconductor manufacturers, indicating that GaN materials will become a new engine to drive the development of the global semiconductor industry.

Company Trend（August 14）

NEO Semiconductor announced 3D X-AI chip technology

NEO Semiconductor recently announced to release its ground-breaking 3D X-AI™ chip, aiming to replace the existing HBM chip to solve data bus bottlenecks. The 3D X-AI chip has a neuron circuit layer at its base, which processes the data stored in the 300 memory layers on the same die.

This 3D X-AI technology realizes AI process in 3D DRAM and increases neural network performance by 100 times, more importantly, offering a 99% power reduction at the same time. This innovative technology allows AI data to be stored and operated internally, thus significantly improving the performance of AI and reducing power consumption. The capacity of 3D X-AI chip is up to 192GB. In addition, it supports the AI processing throughput of 120TB/s per chip.

NEO Semiconductor's 3D X-AI™ technology won the "Best Display" award at the FMS (Future of Storage and Memory) Conference 2024, and was rated as the most innovative AI application. This technology is very suitable for accelerating the next generation of AI chips and applications by simulating AI neural networks in 3D memory, including synapses for weight data storage and neurons for data processing.

Comments:

NEO Semiconductor's 3D X-AI™ chip technology is a major breakthrough in the semiconductor industry for it not only solves the performance bottleneck of existing AI chips in the process of data transmission but also greatly improves the energy efficiency ratio by integrating data processing functions into memory chips. This design concept of integrating memory and computing indicates the new direction of AI chip design in the future, which is expected to thoroughly change the performance, power consumption and cost of AI chips. With the continuous progress of AI technology and continuously expanded application fields, 3D X-AI™ chips will have a far-reaching impact on many fields such as high-performance computing, autonomous driving and intelligent IoT. Generally, NEO Semiconductor's 3D X-AI chip technology represents an important milestone in the development of AI hardware, thus paving the way for the wide applications and innovation of AI technology in the future.

Company Trend（August 13）

AMD completes acquisition of Silo AI

On August 12th, 2024, AMD announced the completion of its acquisition of Silo AI, the largest private AI lab in Europe with transaction value of approximately US$665mn.

In terms of software functions, the all-cash transaction furthers the company’s commitment to deliver end-to-end AI solutions based on open standards and strengthens AMD software performance, including advanced tools and modular software components that allow customization of AI solutions as well as functions of large-scale deployment, optimization and operation of AI models. With the transaction, AMD narrows the gap with its competitor Nvidia and builds strong partnership with the global AI ecosystem. In terms of service, AMD, through the acquisition of Silo AI, obtained the MLOps function, which can provide customers with a simplified path from AI experiments to scalable production models.

Silo AI brings a team of world-class AI scientists and engineers to AMD experienced in developing cutting-edge AI models, platforms and solutions for large enterprise customers including Allianz, Philips, Rolls-Royce and Unilever.

Comments:

AMD’s acquisition of Silo AI marks its in-depth deployment in the AI field, showing the company’s determination to take AI as its top strategic focus. Through this acquisition, AMD not only expanded its professional talent pool in the AI field but also acquired the ability to develop and deploy big language models, which have been trained on AMD's Instinct accelerator on a large scale.

It is expected that Silo AI's expertise and software capabilities will directly improve the experience for customers in delivering the best performing AI solutions on AMD platforms. In addition, Silo AI's expertise on LLMs will help AMD to start an important pace in the synergized development of AI hardware and software and further advance its leadership in the global AI ecosystem. The acquisition enables AMD to compete with Nvidia more effectively and gradually narrow its gap in terms of comprehensive AI solutions.

Supply & Demands（August 11）

South Korea’s export of memory chips to Taiwan surged sharply

According to report of Yonhap News, with the rapid growth of the global market for HBM, the core component of AI accelerators, South Korea chip exports to Taiwan surged rapidly.

On August 11, the Korea Institutes for Industrial Economics & Trade said that South Korea's memory chip exports to Taiwan in H1 this year reached US$4.26bn, up 225.7% YoY, which was much higher than the increase of the total memory chip exports in South Korea (88.7%). Since 2018, Taiwan has been the fifth largest export destination of South Korea’s memory chips, but it rose to the third largest export destination in H1 2024. This export growth was benefited from the rapid growth of the global market for HBM, the core component of AI accelerators. SK hynix's supplies HBM to Nvidia, which may be related to this export increase. Nvidia entrusted TSMC to produce GPUs for AI accelerators, and TSMC packaged the previously produced GPUs and HBM produced by SK hynix and Micron at its Taiwan packaging plant before supplying them to Nvidia.

Comments:

Industry analysts believed that, with the development of AI industry, changes take place in the semiconductor supply chain, which drives the increase of South Korea's exports of memory chips to Taiwan. South Korea's export of memory chips to Taiwan has increased significantly, reflecting the increasing demand for high-performance memory chips due to the rapid development of global AI technology. The growth of market demand of HBM, the core component of AI accelerator, directly promotes the export of South Korea’s memory chips. In addition, the dominant position of South Korean semiconductor companies such as SK hynix in the global HBM market further highlights the country’s important role in the global semiconductor supply chain. This trend may also indicate that with the continuous progress of AI technology and the expansion of application fields, the demand for high-performance memory chips will continue to grow in the future, which will create new growth opportunities to South Korea’s semiconductor industry.

Company Trend（August 13）

TSMC adopted capital budget of US$29.6bn to for long-term capacity planning

On August 13th, the Board of directors of TSMC held a meeting and approved the business report and financial statement for Q2 2024 and passed two budget proposals.

The Board approved the Business Report and Financial Statements for Q2, totaled NT$673.5bn and the net income was NT$247.8bn, with diluted earnings per share of NT$9.56. At the same time, the Board also approved the distribution of a NT$4.00 per share cash dividend for Q2 2024.

To meet long-term capacity plans based on market demand forecasts and TSMC’s technology development roadmap, the Board approved capital appropriations of approximately US$29.6bn. The fund will be used for installation and upgrade of advanced technology capacity, advanced packaging, mature and/or specialty technology capacity and Fab construction, and installation of fab facility systems.

In addition, the Board also approved the capital injection of not more than US$7.5bn to TSMC Arizona, a wholly-owned subsidiary of TSMC, to support the advanced process wafer fab at Arizona, USA. However, since it announced to set up a fab in the USA in May 2020, TSMC’s Arizona fab has not produced any semiconductor products over four years.

Comments:

The huge capital budget adopted by TSMC this time shows that the company has a positive expectation towards future market demand and makes continuous investment in advanced process technology. Against the background of intensified competition of the global semiconductor industry, TSMC’s such investment will help maintain its technological leading strength and market competitiveness. TSMC’s decision not only demonstrates its commitment to maintaining its leading position in the global semiconductor manufacturing industry but also reflects its long-term investment and confidence in the US market and local supply chain. Although its investment in Arizona faces various challenges, including cultural differences, labor competition and political risks, TSMC still decided to continue its expansion plan in the USA, which may be related to its evaluation on the potential market opportunities brought by the CHIPS ACT.

编辑 | 泓明数字营销部

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泓明链动产业

泓明供应链集团于1995年创始于中国（上海）自由贸易试验区，深耕中国集成电路产业供应链20年，是中国数智化产业供应链服务引领者。集团总部位于张江科学城，在全国17个城市建立了31个产业供应链物流中心。

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泓明链动产业泓明供应链集团于1995年创始于中国（上海）自由贸易试验区，深耕中国集成电路产业供应链20年，是中国数智化产业供应链服务引领者。集团总部位于张江科学城，在全国17个城市建立了31个产业供应链物流中心。

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