Semiconductor Market Newsflash #62
Industry trends
Brand Dynamics
Industry trends
South Korea Becomes Taiwan's Largest Trade Deficit Due to NVIDIA AI Supply Chain
South Korea has surpassed Japan as Taiwan's largest source of trade deficit, reaching a record USD 18.1 billion in the first 10 months of 2024. Integrated circuits, particularly DRAM used in AI applications, account for 71.3% of this deficit.
South Korea's SK hynix collaborates with Taiwan's TSMC to produce HBM chips for AI. Both countries, with similar export-driven economies, have strong trade ties, especially in electronics, and recent AI-related collaborations have further intensified their economic interactions.
Cisco Reportedly Bans Chinese-Origin Products as U.S. Tightens Chip Rules, Micron Poised to Benefit
Following the footsteps of PC makers such as Dell and HP, which reportedly aim to reduce the number of components made in China as quickly as possible, a report by technowvoice suggests that American networking giant Cisco is also joining the ranks, as it has now prohibited suppliers from providing products with Chinese origins.
Micron to benefit most in the memory sector,The move by Cisco, in some way, suggests that the “China decoupling” wave has been expanded from components in PCs and servers to chips used in various end-products, including networking hardware. Moreover, it may mark an era when companies would be compelled to avoid sourcing mature process chips from China entirely.
Trump's Tariff Storm Spurs Taiwan's ASIC Firms to Seek Refuge in the U.S. Market
Trump threatens new tariffs on countries like Mexico, Canada, and China, Taiwan's semiconductor industry, particularly ASIC companies like Global Unichip Corporation (GUC) and Alchip, is shifting focus towards European and U.S. markets. GUC, benefiting from U.S. cryptocurrency demand, sees limited impact from U.S. chip bans targeting AI and HPC. In contrast, Alchip, with minimal exposure to China, focuses on partnerships with U.S. cloud service providers and Chinese EV makers. Both companies are positioning for growth in the North American market despite geopolitical challenges.
Samsung and SK hynix Face Uncertainties amid Trump’s Potential CHIPS Act Subsidy Review
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As Trump threatens to impose new tariffs on countries like Mexico, Canada and China, the storm is gradually impacting upstream players in the semiconductor industry. According to Commercial Times, Taiwan's electronic manufacturing services (EMS) industry begins to feel headwinds, as ASIC companies, including TSMC’s ally Global Unichip Corporation (GUC) and Alchip, are shifting their operational focus toward major European and American clients.
According to a previous report by Reuters, the U.S. Department of Commerce may announce two major bans as early as November 28, before Thanksgiving. These measures could potentially impact up to 200 Chinese chip companies, limiting their import of U.S. goods, while another set of rules restricting the export of HBM chips to China is anticipated to be revealed next month.
Brand Dynamics
TSMC Could Begin 2nm Chip Production in the U.S. No Earlier than 2028
The U.S. government's efforts to boost domestic semiconductor manufacturing continue to gain momentum. According to a report from TechNews, information submitted by TSMC to the U.S. Department of Commerce reveals that the 2nm process is expected to begin production in the U.S. as early as 2028.
TSMC's plan to produce its 2nm process in the U.S. has attracted significant attention. Addressing this development, the report highlights statements from Wu Cheng-Wen, minister of Taiwan's National Science and Technology Council, who recently noted that the timeline for TSMC to bring 2nm technology to the U.S. is likely to fall in 2028, and it could be delayed to 2029 or 2030.
Samsung Cuts Photoresist Usage in 3D NAND Production, Boosting Cost Efficiency
Samsung has halved its photoresist (PR) usage in 3D NAND flash production, reducing the amount from 7-8 cc per coating to 4-4.5 cc. This was achieved by optimizing the spin rate of coating equipment and refining etching conditions.
While thick krypton fluoride (KrF) PR is key for multi-layer efficiency, it poses coating uniformity challenges. To address this, Samsung has partnered with Dongjin Semichem since 2013 to improve the process, aiming to enhance cost efficiency and maintain production quality.
Qualcomm's Interest in Acquiring Intel Reportedly Fades due to the Deal's Complexity
Qualcomm's interest in acquiring Intel has diminished due to challenges in acquiring the entire company, making the deal less appealing. While Qualcomm may still consider acquiring parts of Intel or revisiting the deal later, obstacles such as Intel's $50 billion debt, regulatory hurdles, and Qualcomm's lack of experience in semiconductor manufacturing remain significant.
Qualcomm has also stated it does not see any large acquisitions as necessary for its goals, focusing instead on markets like personal computers and automotive chips to boost revenue.
U.S. Reportedly to Unveil Chip Restrictions Next Week, Impacting Samsung, SK hynix, and Micron
Rumors have been circulating that the Biden administration might announce new export restrictions targeting China around Thanksgiving. Now more details have surfaced, as a report from Bloomberg indicates that additional restrictions on the sale of semiconductor equipment and AI memory chips to China could be released as early as next week, though the timing and specifics have shifted multiple times.
Notably, though the updated controls reportedly tend to avoid some of the harsher measures previously discussed, they are expected to include provisions addressing HBM, which are likely to affect South Korean memory giants Samsung and SK hynix, as well as U.S.-based memory producer Micron.