The Tech week that was... Nov 11~15
Welcome to the latest edition of my weekly newsletter bringing you all the key global semiconductor and technology news from last week in one easy read
The Japanese government announced this week it will set up a $65 billion fund to support the semiconductor and artificial intelligence industries through fiscal 2030. The plan will be included in comprehensive economic package to be finalized in November, with the goal to submit the proposal to parliament in 2025. One likely beneficiary is state-backed Rapidus, which is building a cutting edge 2nm technology Fab in Hokkaido, Japan.
TSMC has been awarded up to US$6.6billion in direct funding for its new Arizona, USA Fab after due diligence negotiations on the funding terms were completed. This week the US Department of Commerce announced it had awarded TSMC Arizona Corp, a subsidiary of TSMC, up to $6.6 billion in direct funding under the CHIPS Act funding. The award will support the company’s planned investment of more than $65 billion in three greenfield leading-edge fabs in Phoenix, Arizona. The Department will disburse the funds based on TSMC Arizona’s completion of project milestones.
TSMC has been sued by more than a dozen current and former US employees accusing the chipmaker of discriminatory hiring practices at it’s new Arizona Fab, USA. In the lawsuit, the plaintiffs claimed TSMC’s employment practices include an “intentional pattern and practice of employment discrimination against individuals who are not of East Asian race, not of Taiwanese or Chinese national origin, and who are not citizens of Taiwan or China, including discrimination in hiring, staffing, promotion, and retention/termination decisions.”
Akash Systems is the latest beneficiary of CHIPS Act funding after the US Department of Commerce and Akash Systems signed a non-binding preliminary memorandum of terms (PMT) to provide up to $18.2 million in proposed direct funding. The proposed investment would support the US$121mililon construction of 40,000 square foot cleanroom space within an existing building to transform it into a facility for semiconductor manufacturing. Akash Systems manufactures GPU’s with special GaN-on-Diamond cooling technology for AI and Space communications applications.
The US Department of Commerce reportedly ordered TSMC to halt shipments of advanced chips of 7nm and below to Chinese customers. The Department of Commerce is reported to have sent a letter to TSMC imposing export restrictions on certain sophisticated chips, of 7 nanometer or more advanced designs, destined for China that power AI accelerator and graphics processing units (GPU), according to CNBC.
Samsung Electronics Co. and its largest labour union reached a preliminary agreement on a 5.1 percent pay increase last week, officials said, paving the way to end the stalled wage negotiations that have been ongoing since January. Under the agreement the company offered to secure paid hours for union members to take part in union meetings and provide online cash that can be used to purchase Samsung products, according to the officials, in addition to the 5.1 percent pay raise.
AMD said that it will lay off 4% of its global staff, about 1000 workers, as the computer chipmaker seeks to gain a stronger foothold in the growing artificial intelligence chip space dominated by Nvidia. AMD had 26,000 employees world wide at the end of last year. An AMD representative said in a statement that ″as a part of aligning our resources with our largest growth opportunities, we are taking a number of targeted steps that will unfortunately result in reducing our global workforce by approximately 4%.”
This week Taiwans OSAT reported their October revenue data, with revenue generally up in single digits range.
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Chinese OSAT JCET reported a 15% YoY increase in Q3 revenue to US$1.3billion. For the first 9 months of 2024, revenue was US$3.5billion, up 22% compared to same period last year. It is also reported that there has been a significant restructuring of JCETs board of directors following the acquisition of 22.5% stake by the state-owned China Resources Group. Former JCET Chairman Gao Yonggang and two other board members have stepped down.
US Equipment manufacturer Applied Materials (AMAT) reported record revenue in Q4 of US$7.1billion, up 5% YoY, as it benefited from the boom in AI and energy-efficient computing with sales of equipment to support gate all around technology. For the full year, revenue in 2024 was US$27.2billion up 2% YoY. China revenue declined -30% in 2024. For Q1 2025 AMAT forecasts revenue of US$7.15billion, up 1.5% sequentially.
US based silicon solutions provider Pure Wafer announced this week that it had been acquired by New York based, private equity group, ZMC. The acquisition includes its six silicon services and solutions businesses: silicon wafer reclaim, thin-films, parts cleaning, wafer brokerage, wafer management and specialty foundry services. With the acquisition by ZMC, Pure Wafer will undertake a new growth phase with substantial investments in fab capacity expansion across its U.S. wafer fab operations to meet the demand of OEM’s and IDM’s.
In market research news…
Worldwide silicon wafer shipments increased 5.9% QoQ to 3,214 million square inches in Q3, and registered a 6.8% YoY growth according to the latest data from SEMI. SEMI SMG Chairman, Lee Chungwei, said that “the third quarter wafer shipment results continued the upward trend which started in the second quarter of this year,” and that “Inventory levels have declined throughout the supply chain but generally remain high. Demand for advanced wafers used for AI continues to be strong. However, the silicon wafer demand for automotive and industrial uses continues to be muted, while the demand for silicon used for handset and other consumer products has seen some areas of improvement. As a result, 2025 is likely to continue upward trends, but total shipments are not yet expected to return to the peak levels of 2022.”
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