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Chinese semiconductor companies rally in full force boost Huawei

Huawei chip development receives all-out support from Chinese semiconductor firms
Huawei’s newly launched Pura 70 series smartphones feature its in-house developed Kirin 9010 application processors with SMIC’s 7nm N+2 manufacturing process. According to sources from Taiwan’s fab tool supply chain, SMIC and JHICC provide Huawei with wafer foundry services. Packaging and testing firms Tongfu Microelectronics and SJ Semiconductor also offer support. This is China’s collective effort to improve chip self-efficiency at all costs.

Intel steps up equipment and material orders for advanced packaging
Industry sources said Intel has increased orders with several equipment and material suppliers for its next-generation advanced packaging based on glass substrate technology, which is expected to enter mass production by 2030. Advanced packaging can potentially increase transistor density and unleash high-performance computing’s computational capability. It will be crucial to extend Moore’s Law. Sources said that with advanced packaging, Intel aims to defeat TSMC in the foundry area, where it is also competing in the advanced sub-3nm process production space.

Samsung HBM3E reportedly unable to pass Nvidia verification due to TSMC’s standard
Although Samsung Electronics is currently committed to product verification to supply Nvidia’s HBM3E products, the verification for 8-layer HBM3E is reportedly pending. South Korean media reported that Samsung’s HBM was deemed problematic mainly because TSMC, responsible for Nvidia GPU fabrication, used SK Hynix’s standards to verifySamsung’s products. As the production method of SK Hynix’s 8-layer HBM3E differs from Samsung’s, Samsung’s products failed to pass verification smoothly.

SMIC to slow capacity expansion from 2025 onward amid concerns over customer ‘pre-pull’
Although SMIC achieved about 20% revenue growth year over year in the first quarter of 2024, it might have difficulties maintaining the momentum. TSMC recently lowered its global wafer fabrication revenue growth forecast for the year to between 14% and 19%, an assessment that SMIC’s co-CEO Zhao Haijun also agreed. The situation suggests the industry might see a weak recovery with insufficient growth momentum in 2024.

ASML’s secret sauce for semiconductor success amid challenges in the Angstrom Era
Moore’s Law is not advancing as fast as it used to be under 2nm and even into the Angstrom level as competitors are striving to catch up. At a recent GeoWatch forum held by DIGITIMES Asia, G. Dan Hutcheson, vice chair of TechInsights, and Marc Hijink, the author of Focus – the ASML Way, address questions including whether ASML can continue its monopolistic leadership in the extreme ultraviolet (EUV) lithography equipment market and if the world’s most advanced high-NA EUV machines will be the weapon for a technological leapfrog for ASML’s customers.

SMIC’s gross margin declines hard due to cost of supporting Huawei
SMIC reported US$1.75 billion of revenue in the first quarter of 2024, up 19.7% from last year. The result slightly surpassed market expectations and was comparable to UMC’s financial performance. However, SMIC’s first-quarter net profit was only US$71.8 million, a 68.9% slump year over year. Its gross margin also plummeted to 13.7%, compared to 20.8% a year ago and 16.4% in the fourth quarter of 2023.

TSMC places rush orders for CoWoS-related fab tools to meet global AI demand
TSMC is on track for capacity expansion in the next three years, thanks to the demand growth for hardware and software related to the Generative AI supply chain. Semiconductor equipment sources said TSMC, the sole supplier of AI chips for Nvidia and other vendors, placed big fab tool orders to expand its CoWoS capacity. The foundry house disclosed server AI processors in the next few years will bring considerable revenue injection on several occasions. DigiTimes

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