These are the most-read DIGITIMES Asia stories from February 3 – February 8.
ASML CEO signals US advantage as China faces 10~15 year gap in advanced chip technology
Christophe Fouquet, CEO of ASML, discussed the future of the semiconductor industry on In Good Company, highlighting the challenges posed by geopolitical tensions and supply chain vulnerabilities. He noted that while the industry has long thrived on global collaboration, rising strategic decoupling threatens innovation and stability. Taiwan remains a critical factor, though he downplayed the likelihood of a severe crisis.
Fouquet emphasized that China faces a significant technological gap without access to EUV lithography, potentially lagging behind the US and its allies by 10–15 years. Despite efforts to expand chip production in the US, Japan, and South Korea, he warned that building advanced R&D capabilities is a long-term challenge. Ultimately, Fouquet's analysis suggests a shifting semiconductor landscape, with the US gaining an edge in global technological competition.
China's Tongfu Microelectronics reportedly begins HBM2 trial assembly
Previously focused on semiconductor packaging, Tongfu Microelectronics is now leveraging its expertise to assemble HBM2 products. The company has strong industry ties, with AMD as its largest customer, and partnerships with MediaTek. In its 2024 financial report, Tongfu projected a net profit increase of up to 342.64% due to a semiconductor industry rebound, driven by demand from data centers, automotive electronics, and AI advancements.
With market conditions improving and strategic initiatives yielding success, the company has expanded its product offerings, increased capacity utilization, and improved profitability, positioning itself for continued high-quality growth.
Huawei reports 2024 revenue, Ascend 910C hits 60% of Nvidia H100's AI performance
Huawei's 2024 revenue grew 22% to CNY860 billion (approx. US$118.6 billion), driven by strong ICT infrastructure, smart EV expansion, and AI advancements. Net profit surged 144.4% to CNY87 billion. The company is investing in AI, digitalization, and low-carbon initiatives, with a focus on software development, including HarmonyOS and openEuler. Huawei's Ascend 910C AI chip reached 60% of Nvidia H100's inference performance, reducing China's reliance on Nvidia GPUs despite US sanctions.
Built on SMIC's 7nm process, the chip benefits from Huawei's CANN framework, which optimizes AI workflows. DeepSeek researchers suggest that bypassing Nvidia's CUDA ecosystem with alternative AI processing methods could further reduce dependence on US technology. While Huawei continues to face software-hardware integration challenges, experts highlight that advancements in AI model training could weaken reliance on Nvidia's ecosystem, positioning Huawei as a stronger competitor in the global AI and semiconductor industries.
YMTC reportedly begins shipping fifth-generation 3D TLC NAND flash with 294 layers
Yangtze Memory Technologies Co. (YMTC) has reached a major milestone with its fifth-generation 3D TLC NAND flash memory, featuring 294 layers (232 active) and using Xtacking 4.0 hybrid bonding for improved storage density and performance. While its 20Gb/mm2 bit density is slightly below Kioxia and Western Digital's BiCS8 QLC NAND, YMTC is now a strong global competitor. China's IC imports in 2024 totaled CNY2.7 trillion (US$375.1 billion), with memory accounting for CNY700 billion.
However, as domestic chipmakers like YMTC and ChangXin Memory Technologies (CXMT) advance, China is reducing reliance on foreign semiconductor firms. CXMT has also introduced its seventh-generation DDR5, competing with industry leaders Samsung Electronics (Samsung), SK Hynix, and Micron, further narrowing the technological gap in the global memory market.
TSMC launches 5-year CoWoS expansion; bolsters Nvidia's AI dominance amid DeepSeek challenge
TSMC's expansion strategy for advanced packaging, particularly its Chip-on-Wafer-on-Substrate (CoWoS) production, remains unchanged despite global uncertainties. Nvidia has secured over 50% of TSMC's CoWoS capacity while rising demand for AI ASICs has solidified TSMC's dominance in AI chip production. By late 2025, TSMC's CoWoS monthly capacity is expected to reach 75,000–80,000 wafers, with projections climbing to 150,000 wafers by 2028.
The emergence of Chinese startup DeepSeek, which offers cost-effective AI solutions, poses a potential challenge to Nvidia's dominance, potentially affecting TSMC's AI-related orders. However, semiconductor insiders believe DeepSeek's impact will take months to verify, and neither Nvidia nor TSMC have adjusted their forecasts.
If DeepSeek disrupts Nvidia, more ASIC chipmakers may enter the AI market, expanding edge AI applications and increasing demand for TSMC's services. Despite trade tensions and AI chip bans, TSMC continues to scale CoWoS capacity, expecting steady growth through 2029.
STMicro's worst year in decades: sales drop, job cuts amid continuous market slump
STMicroelectronics (STMicro) plans to cut 2,000–3,000 jobs (about 6% of its workforce) due to downturns in the industrial and automotive sectors. The layoffs, expected to be announced by late February 2025, will mainly affect its Italian and French operations. In 2024, STMicro's revenue declined 23.2% year-over-year to US$13.27 billion, with net profit plummeting 63% to US$1.56 billion.
The company forecasts a 28% revenue drop in the first quarter of 2025. Key segments, including microcontrollers (-30.2%) and automotive (-20%), saw steep declines. However, its silicon carbide (SiC) business in Catania, Italy, generated US$1.1 billion, securing partnerships with Ampere and Chinese automakers.
STMicro faces additional risks from potential US trade tariffs on North American automotive imports and a weakening EV market. It has suspended plans for a US$7.72 billion fab in France and is shifting strategy, expanding partnerships in China to cut costs and maintain competitiveness.
Major NAND makers cut production by 10-20% as industry reshuffling pressure looms
NAND manufacturers are cutting production due to weak demand, with companies like Western Digital (WD), Kioxia, Samsung, Micron, and SK Hynix reducing output by at least 10-20% to stabilize profitability. The only exception is Solidigm, which focuses on enterprise storage. Samsung, the market leader, is expected to cut supply by 20% in 2025, while SK Hynix forecasts a 10-15% NAND bit demand growth this year. Despite these reductions, the market is expected to remain oversupplied in early 2025, with recovery anticipated by mid-to-late 2025.
Meanwhile, NAND stacking technology competition is slowing due to rising development costs. YMTC recently launched 294-layer NAND with Xtacking 4.0, but its market share remains low. Kioxia is lagging, relying on older 112-layer products and positioning its 218-layer BiCS 8 as a transition product. Market shifts show Samsung increasing its share from 33% to 35-36%, while Kioxia and WD saw declines. As China's NAND industry grows, companies like YMTC are pushing for higher stacking layers, forcing competitors to accelerate upgrades.