TSMC mulls US chip plant

TSMC fab in Hsinchu - Wikimedia CommonsTSMC has said that it will decide next year on building a US chip plant to get the Trump government off its back.

TSMC chairman Morris Chang had said the company did not rule out the idea of building a US foundry, however it now is clear the company is waiting until next year to see what happens.

The company said that there would be a loss of some benefits if it moved to the States. If an earthquake happened for instance in Taiwan, it could send thousands of people there as support, while it is harder in the States.

Local media CNA news agency reported on Monday that TSMC would make a decision on the plant in the first half of 2018.

The report also said TSMC was considering a $16.41 billion investment for the plant.

But the company could also be distracted by another more pressing matter of investing in Toshiba’s chip business. An industry source familiar with the matter said TSMC was deeply interested in the Toshiba unit.

Chip industry still suffering from economic crunch

snail-8296a552f7bd1064368205306ff8a3c7c7bdc7c4-s900-c85The chip industry is still in the doldrums and that isn’t going to change anytime soon.

That’s the verdict of Malcolm Penn, CEO and chairman of UK semiconductor analysts Future Horizons.

At a semiconductor conference in London, Penn said that the chip industry is driven by four factors: the economy, fab capacity, unit demand and average selling prices (ASPs).

Penn said: “The economy is in a mess and it’s not getting any better. It’s the ‘wait one more quarter’ syndrome. Nobody reacts when the data is good because they don’t believe it.”

He said that 2016 seemed to be an almost exact replay of 2015. Nobody believes in the numbers any more, he said.

“No-one is spending money. There are no new killer products on the horizon. There is nothing, nothing at all.”

Killer apps can’t be predicted and have always been a surprise, Penn said. The outlook is somewhat grim.

“No one knows how to restart the engines.

Regionally, he said, the picture is also pessimistic. “Japan is a complete disaster. China is on a downward trend. Russia has shot itself in the foot,” he said. “Newly industrialised Asian countries have run out of steam. The overall trend is decidedly bad.”

So what of the future?

Historically, integrated circuits (ICs) have shown a 10 percent growth but, he said, the current trend is low with only a six percent figure in 2016. He said: “PC and smartphone IC shipments are still relatively very small. Unit demand is driven by the economy, and the PC market is as dead as a dodo.”

The figures over the last four years show a steady decline, 9.5 percent growth in 2013, 8.3 percent in 2014, 5.1 percent in 2015 and six percent this year.

He said: “Fab capacity is in the hands of the few. No there is no excess capacity. It takes a year to add new capacity and the lead time has never changed.”

As far as capital expenditure (CapEx) goes, Intel, Samsung and TSMC rule, he said at 60 percent CapEx. That’s not true for Global Foundries (GloFo) which is only nine percent.

He said: “A capacity shortage is waiting to happen. At some point of time there will be a shortage and it will catch everyone by surprise.” And most of the bigger fabs are in earthquake zones.

He’s gloomy about next year too. In 2017 he expects a weak PC and smartphone market.

“The economy is still horrid. There’s no life in the semiconductor business.”

Samsung dumps ASL stake

holland1Chipmaker Samsung is reducing its investment in Dutch chip-equipment supplier ASML.

Samsung acquired three percent of Dutch chip-equipment supplier ASML in 2012 with the idea that the money spent would help the company speed up its R&D.int extreme ultraviolet lithography.

However other companies who made significant investments in ASML for the same reason, including Intel and TSMC and Inte have started walking away. In fact TSMC sold its entire stake last year. Samsung has now confirmed that it’s dumping half of its stake in ASML via a private placement that’s valued at around $681 million.

This means selling off 6.3 million shares in ASML which will account for almost half of its 3 percent stake in the company. It will remain heavily invested in the outfit and there does not appear to be any bad blood between the two companies. It was reported in May Samsung has signed a deal with ASML to purchase the latest extreme ultraviolet equipment for mass production of its 7-nanometer process.

The company is expected to complete installation of this advanced machinery by the first half of 2017, making it the first time Samsung deploys EUV equipment in its chip-making process.

TSMC sets up advanced wafer plant in Nanjing

IBM engineers in a fabrication plant (fab)TSMC has signed an agreement with the Nanjing City Government to invest $3 billion building an advanced wafer manufacturing facility in China.

TSMC said in December it planned to set up its first wholly owned advanced fabrication plant in China with a $3 billion investment, highlighting the growing importance of the Chinese market for semiconductor giants.

Now TSMC Chairman Morris Chang has given out some details on the project saying that a 12-inch fab and our design service centre will be established in Nanjing.

“We aim to provide closer support to customers as well as expand our business opportunities in China in step with the rapid growth of the Chinese semiconductor market over the last several years,” said

The new plant will make 20,000 12-inch wafers per month.  Production will begin in the second half of 2018.

It was not that easy to get the deal past the Taiwan government. Taiwan has restricted manufacturing activities of its prized semiconductor sector in China, amid political tension between the neighbours. However, competition from China’s fast-growing, though fledgling chip industry has put pressure on Taiwanese companies to widen their mainland footprint.

TSMC had urged authorities to allow 12-inch facilities, which use more advanced technology processes than 8-inch plants, to be wholly owned out of concern for intellectual property protection. TSMC already has a wholly owned 8-inch chip making plant near Shanghai.

Ka-PAO! Intel kills its tock

Ka-Pow-logo-Halftone-SMALLChipzilla has decided that the world has had enough of its Tick-Tock strategy and is having its Tock removed and replaced with something with a longer rhythm called PAO.

Intel has produced chips on a yearly tick-tock cycle for the last decade. Thanks to the shrinking die sizes, that process may permanently become a three-step.

For those who came in late Chipzilla had significant issues going from 22- to 14-nanometers, and it extended the latter to a third generation with “Kaby Lake” CPUS. This was the first time that Intel had a break from tick-tock. Now it looks like the longer rhytum has a name which Intel calls “process, architecture, optimisation (PAO).” This will continue for its upcoming 10-nanometer chips.

During “tick” years, the chip giant upgraded its manufacturing technology to make circuits smaller — for its latest chips, for instance, the tick cycle reduced traces from 22- to 14-nanometers. During “tock” years, it uses the same circuit size and manufacturing technique, but changes the microcode, often drastically, to make chips faster and more energy efficient.

While Intel said that the latest 14-nanometer chips were on a “2.5 year cycle,” it plans to introduce three different 10-nanometer chips yearly.

With the three-step PAO, that slows the pace of innovation by effectively a third, meaning consumers will have to wait an extra year before they see significant speed improvements. The third year of a chip’s life cycle will likely see smaller performance gains, giving power users and gamers — who have become critical customers — less reason to upgrade.

Intel said that the new process is a direct result of the difficulty in building chips with traces that are just 20 silicon atoms wide.

“We expect to lengthen the amount of time we will utilize our 14nm and our next generation 10nm process technologies, further optimizing our products and process technologies while meeting the yearly market cadence for product introductions,” according to the document.

Intel has maintained that it will introduce 10-nanometer chips before its rivals. Furthermore, it says that “this competitive advantage will be extended in the future as the costs to build leading-edge fabrication facilities increase.”


TSMC close to 10nm tape out

TSMC fab in Hsinchu - Wikimedia CommonsTSMC has confirmed that it will tape out its first products based around a 10nm process within the next few months and will transition to 7nm by 2018 and 5nm by 2020.

During the recent announcement of its results TSMC let slip that it thinks it has cracked 10nm and will tape out its first 10nm parts within this quarter.

This means that it will have beaten Intel as the outfit delayed its 10nm node until 2017.  It might have gained a few months on Samsung which has declared that volume production of its own 10nm process node parts will begin before the end of the year.

CEO Mark Liu wanted to have 7nm parts in 2018 and 5nm – which will require a switch to extreme ultra-violet lithography (EUV) by 2020.  It needs EUV as the size of the gaps in the lithographic masks becomes too small for other forms of light to pass cleanly through.

Qualcomm makes Samsung sole maker of Snapdragon 820

game-of-thrones-daenerys-dragonThe mother of Snapdragons Qualcomm has made the surprising move of giving all the contracts to make its new Snapdragon 820 to Samsung – knifing TSMC.

The move is rather important. Qualcomm needs its Snapdragon 820 to do really well to make up for the 810 which had a reputation for getting hotter than  Santánico Pandemonium doing a serpent dance over a live volcano and not in a good way.

However the 820 has been getting good reviews and seems to be a return to form from Qualcomm.

The deal is great for Samsung.  Not only will it get to stick it to TSMC, the company had suffered because it leaned rather hard on Apple, which promptly cancelled orders when its iPhone 6S tanked.

Qualcomm has never used anyone other than TSMC to make high-end chipsets, and Samsung could gain more than $1 billion in revenue from the Snapdragon 820 orders.

TSMC counted Qualcomm as its top customer and said it expected falling demand in high-end smartphones in the current quarter after posting a better than expected quarterly profit.

Qualcomm’s order will not sort out Samsung’s earnings, the deal suggests gathering momentum in the Korean firm’s efforts to grow its foundry business to diversify its revenue stream.

The firm is relying more on components such as chips and displays

What appears to have won Qualcomm over was Samsung’s 14-nanometre technology and it is likely that Qualcomm would likely increase orders to Samsung for other Snapdragon chips that would launch later this year.

It is likely to be a key client once the South Korean firm started mass production based on the 10-nanometre technology under development. Qualcomm’s orders could also attract more customers away from TSMC to Samsung.


Samsung to make chips for AMD

AMD logoA South Korean newspaper reported that Samsung’s semiconductor division will manufacture processors for AMD in 2016 using 14 nanometre technology.

AMD’s own semiconductor manufacturing was sold several years ago and is now called GlobalFoundries (GloFo).

GloFo as well as Taiwanese company TSMC currently make CPUs and GPUs for AMD.

But, according to the Korean newspaper, Electronic Times, GloFo won’t be ruled out of the equation and will work together with Samsung to produce the semiconductors.

Samsung already manufactures chips for other firms including Nvidia and Apple.

TSMC benefits from Apple business

Picture courtesy of Wikimedia CommonsThe biggest semiconductor foundry in the world looks like it will report revenues of $30 billion next year.

TSMC, with its headquarters in Taiwan, has had a successful year and good write ups for the A9 processor it manufactured for Apple, according to market research company Trendforce.

It’s also likely to win most of the orders for Apple’s next processor, the A10.

According to Trendforce analysts, TSMC will increase its capital expenditure next year by around $10 billion, with most of that spend going into research and development for seven to 10 nanometre technology, and expanding its 12-inch wafer capacity.

TSMC announced earlier this week that it has plans to build a 12-inch wafer fab in Nanjing, in mainland China. That fab is intended to service the demand for integrated circuits in China.

Chinese chips could rival Qualcomm and Mediatek

DSC_6368Beancounters at data analyst TrendForce have been shuffling their tarot cards and have decided that one day that Chinese chip designers will rival the big names like Qualcomm and MediaTek.

The Chinese have been spending a fortune trying to get self-reliance in semiconductors and have spawned a cluster of chip designers.

Trendforce said that China has nine companies that design and sell chips in the global top 50 from just one in 2009. Clients such as Chinese smartphone manufacturers have also helped compatriot chip designers amass a market share of almost a fifth, according to data analyst TrendForce.

Huawei subsidiary HiSilicon and Spreadtrum Communications are rising in prominence as the government ploughs funds into home-grown technology to reduce cyber-security risk, following revelations in 2013 of US global cyber-snooping programs.

It is harder for US tech firms to do business and Qualcomm is facing delays closing licensing agreements. In contrast, sales at Chinese designers are set to surge this year, some by as much as 40 percent.

Chinese chip designers lag top rivals in terms of technology by four to five years yet have the potential to disrupt the global chip supply chain, industry experts and executives said.

China’s list of chip design hopefuls include HiSilicon, Spreadtrum and RDA Microelectronics which are controlled by state-backed Tsinghua Unigroup. But there is also All Winner Technology, Leadcore, Galaxycore Microelectronics and Goodix Technology.

TSMC has indicated it thinks that the Chinese will become a strong force in a few years particularly in the integrated circuits market.

TSMC co-Chief Executive Officer Mark Liu warned the Chinese that they have to be careful not to just dump a ton of low price chips in the market.

This is what happened when the Chinese tried to develop industries, such as solar panels and liquid crystal displays. In that case the investment led to oversupply and plunging prices.