Top Semiconductor Infographics and Newsletters
Michael Spencer
A.I. Writer, researcher and curator - full-time Newsletter publication manager.
TSMC is expanding globally and driving new levels of efficiency. Image from the LinkedIn post here by Claus Aasholm.
Hey Everyone,
As I cover emerging tech with a focus on startups and venture capital trends (e.g. my Quantum Computing Newsletter), I’ve been digging into some of the writers and curators who talk about the Semiconductor News and complex dynamics around the semiconductor supply chain cycle, the history of these companies and so on.
🌟 In partnership with Airtable 📈
Meet Airtable ProductCentral
Flagship Newsletter Access
(☝—💎For a limited time get a Yearly sub for under $5 a month✨— ☝).
If you know someone who you think might enjoy this issue, feel free to share. It uplifts the emerging writers that provide such valuable guest contributions.
Full disclosure I’m still very much a beginner in these things, but we can all learn more easily about the Semiconductor industry with Newsletters, videos and and following earnings more closely of the related companies.
Semiconductor Newsletters are going Mainstream
Semi Newsletters to follow: Another list following this one is included later in the article, so read on.
In the era of Nvidia and AI Chips, semiconductor insights on Substack are becoming more dynamic making these Newsletters really stand out at a time of geopolitical upheaval and semiconductor industry growth. Major Semi ETFs are up nearly 50% so far in 2024. It’s a crazy time.
The Generative AI bubble is bringing more light to how dominant names like TSMC and SK Hynix truly are, how important ASML is, and how much in dire straits Intel is in these peculiar times. I’m convinced that the demand for AI chips and the geopolitics of the mid 2020s makes the Semiconductor industry way more pivotal to watch and track. If you are a nerd about such things like me, you might enjoy this article.
read
🕯️📖 Recent AI Supremacy Articles you may have missed: 📚
Claus Aasholm has incredible infographics and visuals and it’s made his LinkedIn posts a lot more interesting, and the corporate page of his Newsletter here. If you want to learn easily from quick insights and infographics related to this industry, Claus’s work is one of the best ways on the entire internet.
Top Visuals about the Global Semiconductor Supply Chain 👀
Read his Semiconductor Business Intelligence. His fairly agnostic reviews are technical, but I like that. He’s able to tease nuggets of insight about the industry and display the data visually.
I asked Claus for a visual summary of his insights of the last six months, a sample of his work. This was a few weeks ago.
Back to the ancient Times
By Claus Aasholm, October, 2024.
Less than 6 months ago
When you wake up every morning trying to follow the most complex and dynamic supply chain ever, there is always fresh news. New pieces to the puzzle of the semiconductor supply chain can reveal the near and long-term future of many companies that depend on semiconductors, from suppliers to customers, investors to employees.
In this industry, news from two hours ago is history, and news from two days ago is ancient history. New information is constantly available. I don’t even think about it anymore.
This is why I had to stop and reflect when Michael Spencer asked me to do a piece for him reviewing the essential themes and infographics I had done for the last six months. The semiconductor supply chain works like a time machine that can give a hint about the future, so I am looking forward, not backwards.
While focused on AI, Michael is one of the few who can take a high-level view of what is happening in many areas surrounding AI, including semiconductors, so it is worth listening to him. I also knew that he did not waste time on irrelevant stuff.
Time to take time off for a reflection, but as always, it had to start with the facts.
It is hard to say if what I do makes a real difference, but I know that people follow my work and like it. When that happens, LinkedIn will also “like” my work. During the last six months, my posts got more than 5.2M impressions and close to 20,000 engagements. I added 7,000 new followers and more than 2,500 new connections. My substack blog grew by 2,500 and even Google search started to notice me. From 2 months of nothing, it started to grow to 25.000 impressions and 500 clicks in total.
As Michael has mentioned in our conversations, it had been six crazy months worth reviewing. So here is my short review of the last six months organised in themes (that interact and depend on each other).
The Supply Chain
All of my research is done in a Supply chain context as can be seen below.
From the good old days of everybody having their own fabs, it is now down to only a few and most of the capacity is or is moving towards the Foundry model except memory. The memory business model is heavily reliant on manufacturing and the major suppliers are also fab owners.
As can be seen, the supply chain is only moving in one direction - it is becoming more complex. This complexity is annoying for most companies and people, but I enjoy the complexity and have made it my business. Sad but true.
At the same time, there is a quite dramatic move of the industry towards China despite embargoes and Subsidies - the most important one being the US Chips Act
The Chips Act
Even though the Chips Act was ratified in 2022, its impact was only recently felt when grants started to flow. The Chips Act has significantly affected the semiconductor industry, but only sometimes as intended.
Most of the Chips Act money got allocated fast and it is fair to assume the large companies, in particular Intel, were involved early in the political process.
For more infographics and visuals about the Semiconductor and AI chip industry like this follow Claus’s posts.
Many US taxpayers were unhappy about their money being spent on subsidies for chips, but it is worth pointing out that other countries were spending more per capita. It is also worth noting that the Taiwanese semiconductor industry is founded almost entirely on subsidies and I think most would agree this has been a good deal for the Taiwanese taxpayers long term.
Capped Capital Investments
As a result of the Chips Act, large semiconductor companies capped their investments significantly. This might seem counterintuitive but the semiconductor companies had to stop or delay their current investment programs in order to make new ones on US soil.
The investments were redirected to make new factory shells in the US.
Especially TSMC put the brakes on their investments that declined by 40% in the year after the chips act
Semiconductor Newsletters are going Mainstream
Also consider reading:
Semiconductor Tools
This chain of events impacted the Semiconductor Tool companies that saw declining revenues. Tools for Chips and Dips
For more infographics and visuals about the Semiconductor and AI chip industry like this follow Claus’s notes.
Not only did the Semiconductor tool revenue decline, what made things even worse for the US government was the fact that the chinese part of the revenue of western tool manufacturers continued to increase and eventually reached 45% of all tool sales.
So far, the Chips act and the embargos on tools had shown no impact on China’s march towards advanced technology nodes for homemade GPU’s leading to communist AI.
At the same time as the Chinese manufacturers consumed western tools, they also bought locally manufactured Semiconductor tools. Even though China is still far behind on especially Lithography, the homemade tool sales grew by close to 50% CAGR, while western tool production had started to decline.
Nvidia
While all of this was happening, Nvidia pulled off another great quarter based on H100 sales and accelerated its transformation into a systems company. While the Semiconductor market beancounters SIA & WSTS still counted Nvidia’s revenue as Semiconductors, a significant proportion of revenue were now based on nuts, bolts and other stuff for server manufacturing.
The awaited launch of Blackwell would further accelerate this development as the new Super server would have even higher integration than the H100 Servers. It would be a quantum leap in accelerated computing.
While the step in compute was significant, the cost of compute declined much more with the introduction of H100 than it would with Blackwell.
Blackwell would also increase the amount of High Bandwidth memory needed and the Memory companies were scrambling to churn out sufficient products for Nvidia.
This coincided with the general memory upcycle where all participants were growing. It was quite obvious that SK Hynix of Korea was ahead and benefiting the most from the transition.
TSMC
Also TSMC was busy capitalising on the AI boom. As the only AI manufacturing shop in town, the Taiwanese giant knew that the AI revolution would change the foundry game. All AI processors from CPUs over GPUs to Accelerators would need embedded memory and would rely heavily on advanced packaging. This made TSMC officially change its strategy.
The strategic shift would allocate 10% of TSMC capital expenses towards advanced packaging. Entering the packaging market that was dominated by OSATs (Outsoursed assembly and Test) companies that had serviced the industry for decades would be a serious move.
The 10% capital allocation might sound unambitious, but it would completely outcompete the largest players in the OSAT market. TSMC would at the same time expand its addressable market from $115B to $250B.
Intel
At the same time as TSMC decided to focus more on the packaging market, the company was under attack from Intel with the new foundry strategy. TSMC was not more worried that they agreed to produce Intel products while Intel was trying to fix the companies own manufacturing capabilities.
Intel was in more trouble for every quarter that it failed to deliver a sustainable result and even though management suggested that the poor results were expected - the former industry leader decided to cut headcount by 15%.
The Intel problems were not new. They were a result of failing to address a number of changes in the business over time.
One of the problems was in development of new manufacturing technologies. When Intel launched the 14nm process in 2014, it was the leading technology in the industry. When TSMC introduced their 7nm node in 2018, Intel was significantly behind having decided to take another path that Deep UV and failed. The Apple Iphone XS now has the most advanced technology in the world. This is still the case today.
While a lot of Intels problem where due to the loss of technology leadership, there were several other problems in the company's business model and reliance on the Client business. Increasing headcount while operating profits are declining might not be the best of ideas.
As Intel was struggling with financing their enormous capex budget, the company had to come up with creative ways of attracting external investors. Despite the huge problems it is worth saluting Intel's Smart Capital strategy.
Embargoes and other fun stuff.
Business will find a way
While I have covered a lot more ground that what I share in this short post, the themes of the last 6 months have a lot of “China” and embargo in them. Up until now, pretty useless embargoes it seems which made me think of Michel Crichton’s quote from Jurassic Park: Life will find a way. Or in my thoughts: Business will find a way.
My notepad showed the embargoes as a never ending vortex of embargoes - creating new products - creating more Chinese business - creating more embargoes.
Apart from the political aspects of being seen to do something, the business outcomes were pretty meagre if not counter productive.
Despite showing some signs of being at a peak, the Semiconductor tool revenue to China kept growing to a new record high.
China’s cumulative purchases of Western tools since 2019 are approaching 100B$. Significantly higher than the cumulative US purchases.
As I outlined in the beginning of this post, the Semiconductor Supply Chain is a time machine that allows us to peak into the future. Semiconductor tools allows us to see the furthest and there is a lot of Chinese manufacturing capacity in that future.
Business will find a way.
More Newsletter articles by the Author
More from Notes
The semiconductor and AI chip industry is really showing a lot of exciting momentum that is worthy of analysis. We hope the visuals help. Thanks for reading!
OK Boštjan Dolinšek
I turn innovative ideas into reality through Lean UX, user-focused design, and rapid prototyping. I write about business, finance, and tech.
1moThe semiconductor industry is changing at lightning speed, with AI chips leading the charge. It’s not just a tech race; it’s a high-stakes geopolitical chess match. TSMC and Nvidia are the rock stars, while Intel is like that one band from the '90s trying to make a comeback. And let’s not forget the Chips Act—think of it as the government’s way of shaking the investment piggy bank. Keeping an eye on the semiconductor supply chain is like peeking into the future of tech. Spoiler alert: it’s going to be a wild ride!