Geopolitics Dominates the Semiconductor Industry

?? We welcome you to the Ninth Edition of yieldWerx Insights as we continue to explore key advancements in the global semiconductor industry, including strategic expansions, groundbreaking innovations, and international partnerships.

Here's what we cover in this edition:

1) The U.S. considers stricter semiconductor-related restrictions on China.

2) AMD acquires Finnish AI start-up Silo AI

3) Samsung and Preferred Networks partner up.

4) Strong sales for Taiwanese tech firms helped by AI boom.

5) Accenture acquires silicon design firm Cientra

6) Coalition for Secure AI (CoSAI) launched

U.S. Considers Stricter Restrictions on China's Chipmaking Capabilities

The U.S. government is contemplating stricter measures to limit China's access to advanced chipmaking tools, which some allies describe as "draconian." Key proposals include enforcing the Foreign Direct Product (FDP) rule and extending U.S. control over foreign-produced items containing American technology, impacting companies like TOKYO ELECTRON LIMITED and ASML .

The U.S. is also urging allies, including Japan and the Netherlands, to restrict the service and repair of semiconductor equipment in China, targeting firms like SMIC to prevent them from advancing their chipmaking capabilities. Additional sanctions on specific Chinese semiconductor companies are being considered, alongside expanding the unverified list, requiring licenses for shipping restricted technologies.

Global semiconductor stocks , including ASML, NVIDIA, and TSMC, saw significant declines after reports emerged of tighter U.S. export restrictions on chipmaking equipment to China. ASML's shares dropped by 11%, while other major companies such as TOKYO ELECTRON LIMITED, Arm, AMD, Marvell Technology, Qualcomm, and Broadcom also experienced substantial losses.

Moreover, in an interview with Bloomberg Businessweek , former President Donald Trump said Taiwan should pay the U.S. for defense. He also claimed Taiwan took “about 100%” of America’s semiconductor business.

AMD Acquires Finnish AI Start-Up Silo AI for $665 Million

AMD has announced the acquisition of Silo AI , a leading Finnish artificial intelligence start-up, for $665 million. This strategic move aims to bolster AMD's AI capabilities, positioning it to compete with industry giant Nvidia. Silo AI, renowned for its custom large language models (LLMs), will integrate its 300-member team with AMD to develop advanced AI tools and technologies.

Silo AI, committed to open-source AI models, contrasts with the proprietary approaches of OpenAI and Google. The acquisition underscores AMD's ambition to scale its AI business and drive customer engagement, highlighting the growing importance of software in the semiconductor industry.

Samsung and Preferred Networks Partner on Advanced AI Solutions

三星电子 is collaborating with Japanese AI company Preferred Networks, Inc. to deliver turnkey semiconductor solutions using Samsung's 2-nanometer (nm) foundry process and advanced 2.5D packaging technology, Interposer-Cube S (I-Cube S). This partnership aims to create high-performance AI accelerators to meet the growing demand for computing power driven by generative AI.

Samsung’s 2nm process, featuring Gate-All-Around (GAA) transistor architecture, offers significant performance and power efficiency improvements. Preferred Networks will utilize this technology to build energy-efficient computing hardware essential for AI applications, including large language models.

Strong June Sales for Taiwanese Tech Firms Driven by AI Demand

According to Nikkei Asia, Taiwanese chip and technology suppliers experienced robust sales in June, spurred by rising demand for AI servers and a recovery in the computer sector. Taiwan's 19 largest tech companies reported a combined revenue of NT$1.24 trillion (US$38.05 billion), marking a 13.5% year-over-year increase and the fourth consecutive month of growth.

Key performers included 华硕 , which saw a 21.5% sales increase due to new AI-enhanced computers and strong AI server sales. Quanta Computer saw a 23.4% rise in sales, benefiting from an easing GPU shortage. Foxconn’s sales grew by 16.1%, driven by server and computer sales despite a drop in smartphone sales.

TSMC reported a 32.9% year-over-year revenue increase in the chip sector, citing strong demand for its 3nm and 5nm chips. MediaTek saw a 12.8% sales growth, while UMC experienced a 7.9% decline due to slower recovery in mature processes.

Accenture Acquires Silicon Design Firm Cientra

Accenture has acquired Cientra , a silicon design and engineering services company, enhancing its capabilities in custom silicon solutions. Founded in 2015, Cientra is based in New Jersey with offices in Germany and India. The financial terms were not disclosed.

Cientra specializes in embedded IoT and application-specific integrated circuit design and verification, boosting Accenture’s expertise in semiconductor innovation to meet the growing demands of data computing, cloud computing, wireless technologies, edge computing, and AI.

Cientra's 530 engineers will join Accenture’s Advanced Technology Centers in India, adding significant expertise in hardware, software, and network development across various industries. This acquisition follows Accenture's recent addition of Excelmax Technologies and XtremeEDA USA to bolster its semiconductor design services.

Coalition for Secure AI (CoSAI) Launched

The Coalition for Secure AI (CoSAI) was unveiled at the Aspen Security Forum, hosted by the OASIS global standards body. CoSAI is an open-source initiative that provides guidance and tools for developing Secure-by-Design AI systems. Its founding members include Amazon, Anthropic, Chainguard, Cisco, Cohere, GenLab, IBM, Intel, Microsoft, NVIDIA, OpenAI, PayPal, and Wiz.

The coalition seeks to create a collaborative ecosystem for sharing open-source methodologies, standardized frameworks, and tools, uniting industry leaders, academics, and experts to tackle AI security challenges.

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