All Semiconductor News Issue #1

Hello Everyone,

This is a pivot for this LinkedIn Newsletter, it's no longer about investing but rather the more specific area of the semiconductor industry. I felt like this space is so dynamic it needed a new voice to cover the news for this platform.

This is an issue for the week of April 19th, 2024.

This is one of my “new” Newsletters, and over 10+ now covering various aspects of emerging tech. Thanks for the support, I hope to learn along with you about these topics.

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• Welcome to the 1st edition of All Semiconductor News, where I seek to break down some of the news in the Semiconductor, AI chips and datacenter space globally to make it more accessible and easy to follow.
• With the rise of Generative AI, Nvidia and TSMC and the geopolitical importance of Taiwan, this is now a major topic of me in my watching of the emerging tech space that I do as an analyst, writer, curators and news watcher.
• The Technology category is an underdog relative to Substack’s baseline audience, this means I’m an outlier here. To survive, I’m building 10+ Newsletters in “emerging tech” coverage. A pilot never seen before on Substack for a one-person team. Full disclosure, I may not make it.
• Importe note: I am not native to the Semi space, and it might take a while to get up to speed. So we’ll be effectively learning about these things together.

Semiconductor Things?

This Newsletter was built to solve the pain point of getting the latest news on A.I. chips, semiconductors, datacenter innovation and chip news.

By Michael Spencer

Analyzing and Curating News ??

I’m a news fanatic always analyzing the latest in exponential and emerging tech like robotics , semiconductors & AI chips, quantum , synthetic biology and other fields - as well as BigTech in AI .

When to Expect this Newsletter ?

This Newsletter will typically go out on Friday at 8am Eastern Time.

What? It will attempt to summarize some of the most important news in the semiconductor industry of the last week.

Semiconductor Bits & Bites ??

• Earnings Time: TSMC’s net profit rose 8.9% year-on-year to NT$225.5 billion (US$7.17 billion) in the 1st quarter Beat consensus' NT$217.2 billion (US$6.71 billion) Revenue fell 3.8% to US$18.87 billion, but beat guidance.
• Water and ESG Concerns: TSMC said it is already reducing water use and boosting recycling efforts as drought conditions worsen in Taiwan, but the chip giant does not expect any meaningful impact on operations, media report.
• ASML’s stock is down: ASML stock fell 7.1% in US trading, dragging the SOX semiconductor index down 3.3% after the world’s biggest chip equipment maker reported 1st quarter orders of €3.6 billion (US$3.8 billion), well below €5.4 billion expected and the 2nd lowest since 2020, media report, noting orders can be lumpy, as the prior quarter, Q4, saw a record high €9.2 billion in orders.

ASML Heavily Dependent on China Sales

ASML Holding NV’s sales to China were resilient in the first quarter despite curbs on exports of high-end chipmaking equipment to China this year. Its main customers include TSMC, Samsung and Intel, the world’s top processor foundries, which, in turn, make chips for AMD, Nvidia, Qualcomm and Apple.

ASML, Europe’s most valuable technology company, has been caught in the crosshairs of the US government’s effort to stymie China’s progress in the chip industry. The Biden administration pushed the Dutch government to introduce restrictions on exports of ASML’s immersion DUV lithography machines, its second-most capable category of machinery, to China from Jan. 1. ?Read More from BNN Bloomberg.

ASML sets density record with latest chipmaking tools — High-NA EUV equipment prints first patterns

ASML has announced that its first extreme ultraviolet (EUV) lithography tool with projection optics featuring a 0.55 numerical aperture (High-NA) has printed its first patterns. The announcement is a major milestone for both ASML and for High-NA EUV lithography technology in general.?

"Our High-NA EUV system in Veldhoven printed the first-ever 10 nanometer dense lines," a statement by ASML reads . "Imaging was done after optics, sensors and stages completed coarse calibration. Next up: bringing the system to full performance. And achieving the same results in the field." Read More .

Semiconductor Bits & Bites ?? Continued

• Micro Update: Micron Technology will receive US$6.1 billion in grants from the US for semiconductor fabs and other facilities it is building in New York and Idaho, media report, noting the funding will be announced next week. It will also get loans. MU 0.00%↑
• Mobileye, the automotive chip developer, has won orders for 46 million EyeQ6 Lite assisted-driving chips so far, as automakers race to make cars safer and easier to drive, Reuters reports, adding the shipments will extend over the next few years. MBLY 0.00%↑
• AMD AI computer chips: AMD launched the new Ryzen PRO 8000 Series desktop processor, made using TSMC’s 4nm production process, its first AI enabled desktop microprocessor for business users, AMD said, noting the chips combine CPU, GPU and a dedicated NPU (neural processing unit) for more AI processing power. AMD also launched Ryzen PRO 8040 processors for AI laptops, with WiFi-7, also made on TSMC 4nm, with systems available from HP, Lenovo, others in the 2nd quarter, 2024. Read More. AMD 0.00%↑

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Chip Startup Rivos Raises in Fresh Series A Funding

Chip startup Rivos said on Tuesday it raised $250 million in a funding round that will enable it to manufacture its first server chip geared for artificial intelligence. It is seeking to develop RISC-V AI chips.

Rivos hasn't said much about the chip's architecture, beyond that it uses a combination of high-performance RISC-V CPUs and a data parallel accelerator (general-purpose computing on graphics processing unit, or GPGPU) that share a common memory domain across both DDR and HBM memory, and will be able to support workloads requiring terabytes of memory. It was founded in 2021. In early 2022, Apple sued the RISC-V backer, alleging the upstart had poached employees working on its A- and M-series system-on-chip (SoC) designs. Read More.

Semiconductor Bits & Bites ?? (Let’s look at Asia too)

• Samsung Electronics and other NAND Flash memory chip makers are keeping production on a tight leash to avoid flooding the market and sending prices down again, media report, noting Samsung has the capacity for 2 million wafers per quarter (wafer-ins), but has capped 2nd quarter production at 1.2 million as it eyes market conditions.
• Japan NAND flash memory chip maker Kioxia plans to list on the Tokyo Stock Exchange this year amid a memory chip market recovery, Nikkei reports, noting the world’s 3rd biggest NAND producer was approved to list in 2020 and its market capitalization was expected to be ￥2 trillion yen (US$13 billion), but delayed due to US-China trade friction.
• TrendForce: TSMC will boost CoWoS packaging capacity 150% to 40,000 wafers per month by the end of 2024 for Nvidia’s Blackwell platform, while capacity in 2025 could nearly double. Shipments of the GB200 “could exceed millions of units by 2025.” The GB200 and B100 both use more complex CoWoS-L packaging, lengthening the validation and testing process. The chips are due out in the 2nd half 2024. Other suppliers are focusing on Nvidia H-series chips, with CoWoS-S technology.

How Good are Nvidia’s Mid 2020 Growth Prospects?

Nvidia's NVDA 0.00%↑ estimated $111.5B in revenue in FY25 is more than 4x higher than FY23's $26.97B.

Nvidia’s stock is up 74% YTD in 2024.

TrendForce reports that the latest NVIDIA Blackwell GPUs for AI are poised to be the industry's next "holy grail" since the performance they are bringing to the markets has attracted the attention of several major clients.

• This includes the GB200 SUPERCHIP , which is projected to account for 40% to 50% of NVIDIA's Blackwell supply going into 2025.
• However, with this significant increase in demand, supply firms associated with NVIDIA will have a tremendous year in market demand; hence, firms like TSMC & others will have to upscale existing facilities.

Semiconductor Bits & Bites ??

• Apple CEO Tim Cook on a trip to Vietnam pledged to buy more components and accessories from Vietnam suppliers as Apple continues to shift supply chains away from China, media report, adding Apple said it has spent 400 trillion dong (US$15.8 billion) in Vietnam through its supply chain partners. AAPL 0.00%↑
• Rumour Mill: Samsung Co-CEO and semiconductor division head, Kye-hyun Kyung, is rumored to have made a secret trip to TSMC while in Taiwan to meet with server maker Quanta and its subsidiary, Quanta Cloud Computing, media report, saying the purpose of the visit was to promote Samsung’s latest HBM (high bandwidth memory) chips, which are made for AI servers.
• In Quake territory: Powerchip Semiconductor (PSMC) said the April 3 earthquake in Taiwan impacted 5% to 8% of 2nd quarter shipments and estimates the damage to equipment and chips-in-production at around NT$500 million (US$15 million), media report, adding PSMC said the quake caused no major damage. Within 3-days, production was back up to 80% strength, and within a week, 95%. PSMC estimates insurance will cover 50%-60% of claims.
• Japan’s Rapidus , a state-backed chip foundry meant to one-day rival TSMC, opened its 1st Silicon Valley subsidiary last week to work with semiconductor startups that may become future customers, Nikkei reports, noting Rapidus Design Solutions will be led by former AMD executive Henri Richard . Rapidus plans to accept small-lot orders along with big volume orders; and aims to cut delivery times to less than half of rivals by using AI-assisted analysis to streamline production.

Nvidia’s AI Datacenter Moat at a Glance

“Nvidia's combination of chips and CUDA software dominates the market for AI-related computing, and Nvidia gobbled up more than 80% market share of AI chips in 2023.”

Nvidia’s stock performance has not been “normal” of late.

• Nvidia’s market cap at the time of publication is $2.1 Trillion.
• The peak of Nvidia’s stock price recently was $950 on March, 25th, 2024.

Semiconductor Bits & Bites ??

• Drama in South Korea: Samsung Electronics is falling behind rivals because its leaders avoid risk and seek short-term results over long term innovation, Nikkei reports, citing employees. Senior managers at Samsung are now given 1-year contracts, and those unable to produce results are let go. Dissatisfied employees are leaving for SK Hynix, which encourages risk-taking because it “can’t compete with Samsung without actively adopting new ideas,” one engineer said.
• Nvidia vs. AMD? Google Cloud does not plan to offer AMD AI chips, The Information reports, meaning 2 of the 3 major US cloud providers remain unconvinced AMD’s offerings are a good alternative to Nvidia’s GPUs.
• Marvell Technology has won new orders to help big US cloud firms develop their own AI chips, Reuters reports, saying one such custom AI chip is already in production and another will go into production in 2026, while it also has a custom Arm-based CPU in production. Marvell’s CEO said gross margins in the custom chip design business are lower than the company’s off-the-shelf chip products.

Closer Look at TSMC Earnings April 18th

• TSMC beats revenue and profit expectations in the first quarter on strong AI chip demand.
• A strong demand for AI chips is being led by the proliferation of large language models such as ChatGPT and Chinese clones.
• Net revenue: 592.64 billion New Taiwan dollars ($18.87 billion), vs. NT$582.94 billion expected
• Net income: NT$225.49 billion, vs. NT$213.59 billion expected

TSMC reported net revenue rose 16.5% from a year ago to NT$592.64 billion, while net income increased 8.9% from a year ago to NT$225.49 billion.

Taiwan are the champions for now my friends!

My favorite earnings call quote:

“Almost all the AI innovators are working with TSMC to address an insatiable AI-related demand for energy efficient computing power,” said Wei, adding that the firm estimates revenue contribution from server AI processors to “more than double this year.” - CFO Wendell Huang