Semiconductor Week Review (December 8-14):
The global semiconductor industry is undergoing major changes in the second half of 2024, with rivals Samsung and Intel struggling to remain competitive while TSMC consolidates its dominance in advanced chip manufacturing. While TSMC maintains full utilization of its 3nm and 5nm processes, Japan’s Rapidus is ambitiously targeting production of 2nm chips by 2025 with significant government support.
Meanwhile, the growth rate of China’s chip design sector was 11.9%, lower than the global industry growth rate of 19% for the first time. At the same time, South Korean memory manufacturers Samsung and SK Hynix are experiencing relaxation of US export restrictions on their Chinese operations. This dynamic situation is further complicated by India’s rising semiconductor imports and Apple’s plans for an ultra-thin iPhone, highlighting the evolving nature of global semiconductor supply chains and technological innovation.
Taiwan’s semiconductor giant stands alone as rivals stall in advanced chip manufacturing
Tsmc’s dominance in the semiconductor foundry business is expected to remain strong until 2025, with the company maintaining its lead in producing cutting-edge chips below 7nm as competitors Samsung and Intel struggle to keep up. Samsung’s foundry market share is expected to fall below 10%, while Intel grapples with leadership challenges and strategic uncertainty in an attempt to spin off its manufacturing operations.
Despite concerns about U.S.-China AI chip regulations, Tsmc Chairman CC Wei said the company is maintaining full utilization of its 3nm and 5nm processes, and expects sales of NT$270 billion to NT$275 billion in November. It confidently declared that it does not face any substantial competition as predicted.
The company’s technological lead, particularly in the upcoming 2nm GAA process, coupled with its key position in the global semiconductor supply chain and strong customer base in the United States, which accounts for more than 70% of its revenue, poses Samsung’s technological challenges. This effectively creates a moat that falls short of any of Intel’s strategic challenges. Fumbles can be bridged.
Rapidus targets 2025 trials despite funding hurdles, Japan rushes to produce 2nm chips
Ambitious Japanese semiconductor venture Lapidus is making significant progress towards its 2nm chip production goal. Chairman Tetsuro Higashi announced at SEMICON Japan 2024 that trial production will begin in April 2025 at the company’s Chitose office. The Japanese government is putting considerable effort into this initiative, pledging 200 billion yen by fiscal 2025 and working to eliminate a 4 trillion yen funding gap for mass production by 2027.
The factory is scheduled to receive critical equipment, including EUV lithography equipment, by December 2024, but despite securing 7.3 billion yen in private investment from key stakeholders including Toyota and SoftBank, the project remains critical. facing major financial challenges. The government’s commitment extends to a wide-ranging investment of 10 trillion yen in the AI and semiconductor industry, and sees Lapidus as essential to reducing global dependence on TSMC and strengthening Japan’s semiconductor capabilities. being done.
The financing strategy combines institutional investment, debt guarantees and a novel proposal to exchange public assets for company stock, underscoring Japan’s determination to regain its position in advanced chip manufacturing.
CXMT evades US restraints, South Korean chipmaker wins China bailout
South Korean memory chip giants Samsung and SK Hynix take a breather under new U.S. semiconductor export regulations, maintaining their status as verified end users for their China operations, while Chinese manufacturer CXMT is exempt from restrictions. The exclusion has been noted and is causing concern in the industry. The exemption will allow Samsung to continue producing 40% of its NAND memory at its Xi’an factory and upgrade to a 236-layer V8 process, while SK Hynix will proceed with production of fourth-generation 10nm-class DRAM at its Wuxi factory. I can do that. 45% of DRAM.
However, CXMT’s omission from the Entity List has raised concerns in South Korea’s semiconductor sector, especially as Morgan Stanley predicts the Chinese company will surpass Micron in global DRAM shipments by 2026. . Industry experts have suggested this omission may be due to U.S. equipment manufacturers’ dependence on China. While CXMT benefits from strong domestic market support and government support, it may also be a strategic move to curb the growth of Korean companies.
Apple plans thinnest iPhone yet as 2025 iPhone Air enters production stage
Apple’s rumored iPhone 17 Air, which has entered the new product launch phase at Foxconn, signals a possible change in the tech giant’s product strategy amid criticism of design stagnation. The device will reportedly be 6.25mm thick and will be released in 2025, according to supply chain sources, and will replace the current iPhone Plus model in the lineup alongside the base iPhone, iPhone Pro, and iPhone Pro Max. It is said that
Positioned in the mid-range market segment due to its experimental nature, the Air’s ultra-thin chassis requires a complete overhaul of the design and manufacturing process, and if the screen wrinkle issue can be resolved, it will be a technical upgrade to the foldable phone. It could be a stepping stone.
India’s push for domestic semiconductors takes shape, with chip imports surging by 18.5%
India’s semiconductor import growth reflects its ambitious push into electronics manufacturing, increasing by 18.5% year-on-year to USD 20.19 billion in FY2024, new data shows. The country imported 18.43 billion chips during this period, with China emerging as a major supplier. , accounting for more than 30% of imports in early 2025, followed by Taiwan, Hong Kong, and South Korea.
To combat this growing dependence, India launched the Semicon India Program, approving five semiconductor manufacturing projects worth 1.52 trillion rupees (approximately US$18 billion), as well as implementing a chip-to-startup scheme. Invested in workforce development through initiatives such as: , has already trained more than 25,000 engineering students in chip design and related technologies.
The government’s multi-pronged approach aims to transform India from a major semiconductor importer to a self-sustaining manufacturing hub, but the transition is still in its early stages as import volumes continue to rise.
Intel and Samsung’s foundry ambitions fade as TSMC’s dominance grows
While industry leader TSMC maintains its dominance with more than 60% market share, semiconductor giants Intel and Samsung face mounting challenges in their foundry businesses. Despite Intel’s ambitious plans to overtake Samsung to become the No. 2 foundry and Samsung’s US$94 billion investment strategy to surpass TSMC by 2030, both IDMs face fundamental problems. I’m struggling. Both companies are grappling with operational inefficiencies exacerbated by low yields, limited customer adoption, and integrated business models that deter external customers.
Samsung’s recent setbacks include losing an 8nm order from Nvidia and struggling to adopt 3nm chips, while Intel has faced criticism of Pat Gelsinger’s leadership. , is increasing outsourcing to TSMC as equipment utilization rates decline. Industry experts say both companies are falling further behind TSMC technologically and may require significant restructuring, including job cuts and investment cuts, to prevent a widespread corporate crisis. suggests.
Growth in China’s chip design sector is lagging behind global semiconductor recovery for the first time
According to Wei Shaojun, president of China Semiconductor, China’s semiconductor design industry is expected to grow by 11.9% to reach 646 billion yuan (approximately US$89.66 billion) in 2024, compared to the 19% expected by the global semiconductor industry. This is the first time that the growth rate has fallen below that of the previous year. Industrial Association IC Design Branch
Speaking at ICCAD-Expo 2024 in Shanghai, Wei highlighted the sector’s ongoing challenges, including limited access to advanced manufacturing processes and a focus on mid- and low-end market segments. did. The industry is on the rise as the Yangtze River Delta region takes the lead with a growth of 16.2% to RMB 382.84 billion, while the top 10 design companies’ sales decline by 3.7% to RMB 176.2 billion facing pressure.
Wei said that comprehensive technology upgrades and a He emphasized the urgent need for ecosystem development.
