Tag: Semiconductor Manufacturing

  • TSMC Starts 4nm Chip Production in Arizona Amid Higher Costs

    TSMC Starts 4nm Chip Production in Arizona Amid Higher Costs

    TSMC has kicked off the mass production of its advanced 4nm chips at the Fab 21 facility in Arizona, which is a significant step for the U.S. semiconductor sector. This was confirmed by CEO C.C. Wei during a recent earnings call, stating that high-volume manufacturing began in Q4 2024, using the N4P process technology with yields similar to those of TSMC’s operations in Taiwan.

    TSMC’s New Chapter in Arizona

    This milestone highlights TSMC’s capability to provide top-tier manufacturing quality outside of its main base. However, chips produced at the Arizona facility come at a higher price compared to those made in Taiwan, primarily due to increased depreciation costs, a smaller production scale, an immature local ecosystem, and the additional shipping costs for transporting chips back to Asia for packaging. Wei pointed out the “geographic flexibility” of the chips made in the U.S., which is reportedly appreciated by customers even with the higher cost.

    Expansion Plans and Customer Engagement

    Currently part of TSMC’s $65 billion investment in U.S. manufacturing, the Arizona plant is operating Phase 1A with a monthly production capacity of around 10,000 wafers. Reports indicate that notable customers like Apple, AMD, and Nvidia are among the first to utilize this facility, with Apple testing its A16 Bionic chip for iPhones and S9 processors for Apple Watches produced there.

    Future Growth and Strategic Objectives

    TSMC intends to further increase its footprint, with Phase 1B expected to add an additional 14,000 wafers per month by the end of this year. The company also plans to introduce its 2nm process to Arizona by 2028, alongside a third fab slated for completion by 2030. These advancements are in line with the U.S. Chips and Science Act, which aims to enhance local semiconductor manufacturing. While chip packaging will still depend on Taiwan until Amkor’s U.S. packaging facility is operational, TSMC’s investment signals a move toward bolstering advanced chip supply chains within the U.S.

    Regulatory Environment and Industry Dynamics

    The U.S. and Netherlands have imposed stricter export controls to restrict China’s access to advanced semiconductors and AI technologies, citing national security reasons. This initiative impacts firms like Nvidia, TSMC, and ASML, enforcing tighter licensing regulations and increased scrutiny to stop advanced technologies from reaching China.

    Additionally, sources hint that TSMC has turned down an offer to produce Samsung’s Exynos chips, possibly due to worries about technology sharing with System LSI and commitments to vital clients such as Apple and Qualcomm. Meanwhile, Samsung is facing difficulties with its 3nm production, which is affecting its Exynos roadmap and device strategies.

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  • Intel Secures $7.9 Billion Grant for Semiconductor Projects

    Under the 2022 U.S. CHIPS and Science Act, the Department of Commerce has given Intel $7.86 billion for its semiconductor manufacturing projects. This funding is aimed at supporting advanced packaging efforts at various Intel locations including Arizona, New Mexico, Ohio, and Oregon. This is the largest direct funding amount ever provided by the U.S. government to a single company, following a preliminary agreement made in March 2024.

    Intel’s Commitment to Semiconductor Production

    This funding is part of Intel’s dedication to reinstating America’s role as a leader in semiconductor manufacturing. This initiative is projected to create tens of thousands of jobs while boosting national security. Intel expects that through the CHIPS Act, it will generate over 10,000 direct jobs, almost 20,000 construction positions, and more than 50,000 indirect jobs in related sectors.

    CEO Highlights Economic Growth

    Pat Gelsinger, the CEO of Intel, underlined the importance of this funding, stating, “With Intel 3 already in high-volume production and Intel 18A set to follow next year, leading-edge semiconductors are once again being made on American soil.” He pointed out that these investments will not only foster economic growth but also strengthen national security by increasing the production of chips within the country.

    Additional Financial Support

    Along with the grant, Intel will also gain from a 25% investment tax credit, which will aid the company’s plans to invest over $100 billion in semiconductor manufacturing and research and development within the U.S. in the coming years.invest over $100 billion

    Intel is also engaged in various projects, including the Secure Enclave program, which has been awarded a separate $3 billion contract. These initiatives are designed to address the rising demand for secure and trusted semiconductor manufacturing. The company’s advancements in new technologies, like the Intel 3 and Intel 18A process nodes, further solidify Intel’s position as a leader in the semiconductor market.

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  • TSMC’s Advanced Packaging Capacity Fully Booked by Nvidia and AMD

    TSMC’s Advanced Packaging Capacity Fully Booked by Nvidia and AMD

    TSMC, the prominent semiconductor manufacturer globally, has declared that its advanced packaging capacity has been completely reserved for the next two years. This announcement coincides with Nvidia, AMD, and Guanghuida securing TSMC's cutting-edge packaging technologies for their high-performance computing (HPC) endeavors.

    Growing Demand for AI Processors

    The emphasis on high-performance computing is driven by its crucial role in supporting artificial intelligence (AI) tasks. TSMC foresees a substantial revenue increase from AI processors, with estimates suggesting a doubling of revenue just this year. Projections indicate that over the next five years, the compound annual growth rate for AI chips will reach 50%, with AI processors anticipated to contribute more than 20% of TSMC's revenue by 2028.

    Key Players Embrace TSMC's Technologies

    Nvidia and AMD have both secured TSMC's Chip-on-Wafer-on-Substrate (CoWoS) and System-on-Integrated-Chip (SoIC) advanced packaging capacities for their respective products. Nvidia's flagship H100 chip, produced on TSMC's 4nm process, utilizes CoWoS packaging. In contrast, AMD's MI300 series, fabricated using TSMC's 5nm and 6nm processes, employs SoIC for CPU and GPU integration before incorporating CoWoS with High Bandwidth Memory (HBM).

    Guanghuida, an emerging player in the AI chip market, has also reserved TSMC's packaging capacity. Their H100 chips, powered by TSMC's 4nm process and CoWoS packaging, feature SK Hynix's HBM for improved performance. Furthermore, Guanghuida's latest Blackwell architecture AI chip, based on TSMC's advanced 4nm process, showcases upgraded HBM3e memory, doubling the computing power compared to earlier versions.

    Meeting the Escalating Demand

    The increasing demand for AI chips is being fueled by major global cloud service providers like Amazon AWS, Microsoft, Google, and Meta, all striving for dominance in the AI server sector. To tackle shortages from leading manufacturers such as Nvidia, AMD, and Guanghuida, these cloud giants are turning to TSMC to fulfill their orders, contributing to the chipmaker's positive revenue forecasts.

    To address this rising demand, TSMC is enhancing its production capacity for advanced packaging. By the year's end, CoWoS monthly production is expected to triple, reaching 45,000 to 50,000 wafers, while SoIC capacity is set to double, hitting 5,000 to 6,000 wafers. By 2025, SoIC monthly production is projected to double once more, reaching 10,000 wafers.

    The full booking of TSMC's advanced packaging capacity signifies the rapid pace of innovation in AI-driven computing, with key industry players strategically positioning themselves to leverage this burgeoning market.

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  • NVIDIA chip supply stable despite Taiwan 7.5-magnitude quake

    NVIDIA chip supply stable despite Taiwan 7.5-magnitude quake

    After the recent 7.5-magnitude earthquake near Taiwan, concerns have arisen about potential disruptions to the global chip supply chain. Taiwan plays a significant role in semiconductor manufacturing, leading to speculations about the status of semiconductor factories post-earthquake. However, NVIDIA, a prominent player in the AI industry, has reassured stakeholders that its chip supply remains unaffected.

    NVIDIA Confirms Unharmed Chip Supply

    US-based NVIDIA, a company heavily dependent on Taiwan Semiconductor Manufacturing Co. (TSMC) for chip production, has stated that the earthquake did not impact its supply chain in Taiwan. TSMC, known for producing chips for tech giants like Apple, AMD, Qualcomm, and NVIDIA, has reported no damage to crucial chip-making equipment, including the Extreme Ultraviolet Lithography machines.

    Despite some tools being affected at specific TSMC facilities, the core machinery remains unscathed. As a precautionary measure, TSMC temporarily evacuated certain production facilities to ensure employee safety. However, operations resumed at 70-80% capacity within just 10 hours after the earthquake.

    TSMC's Preparedness and Resilience

    TSMC attributes its quick operational recovery to preparedness for such incidents. Utilizing building dampers and conducting regular earthquake drills, TSMC mitigates seismic activity's impact on semiconductor production.

    Semiconductor manufacturing demands precise, uninterrupted processes in controlled settings. Even minor disruptions can lead to significant losses, such as discarding entire silicon wafers. TSMC's earthquake readiness and protective measures have proven vital in safeguarding its production line.

    Importance of TSMC to NVIDIA

    TSMC serves as NVIDIA's primary chip manufacturer, providing cutting-edge semiconductor technology. NVIDIA relies on TSMC's advanced manufacturing processes for high-performance GPUs, including the latest Blackwell architecture models.

    The collaboration between NVIDIA and TSMC ensures efficient chip designs and supply. Beyond GPUs, TSMC contributes essential semiconductor technologies crucial for NVIDIA's products. This partnership guarantees a dependable chip supply, essential for meeting market demands and sustaining NVIDIA's competitive edge.

    TSMC holds the largest global market share in chip manufacturing. Any disruption to TSMC would not only impact NVIDIA but also other top AI and tech firms, potentially disrupting their chip production and supply chains. Any threat to TSMC poses a concern for NVIDIA and the broader tech industry, potentially hampering global technological advancements.

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