Semiconductor Week in Review (Nov 17 - 23):
A wave of disruptions is reshaping the global semiconductor landscape in late 2024, as TSMC recalibrates its expansion plans amid Trump's return while Nvidia tightens its grip on AI chip packaging capacity. The industry flux sees AMD unseating Intel in server revenue for the first time, while China gains ground with BYD's 4nm automotive chip launch and YMTC outperforming Samsung in domestic SSD sales. These shifts unfold as TSMC weighs moving advanced chip production to Arizona, backed by US$11.6 billion in US incentives, highlighting the growing intersection of technological competition and geopolitical pressures.
Trump's return casts shadow over TSMC's AI chip expansion
TSMC is tempering its ambitious expansion plans for advanced chip packaging amid growing uncertainties tied to Donald Trump's presidential victory and geopolitical tensions. While the semiconductor giant still aims to double its CoWoS capacity to 75,000 units per month by 2025, it has scaled back its 2026 targets from 140,000 to 135,000 units.
Despite the adjustment, top tech executives like Nvidia's Jensen Huang and TSMC's C.C. Wei remain bullish on AI chip demand, citing strong interest from tech giants like Microsoft and OpenAI. The recalibration reflects broader concerns about US-China trade relations and their impact on the semiconductor supply chain, particularly as TSMC grapples with restrictions on serving Chinese AI chip customers while maintaining its dominant position in advanced packaging technology.
The battle for China's smart cockpit heats up
In a bold move that intensifies competition in China's automotive semiconductor space, BYD has unveiled its most sophisticated chip to date – the BYD 9000 – manufactured using TSMC's advanced 4nm process technology. The chip, set to power four models in BYD's premium Fangchengbao line priced between US$52,464 and US$56,332, has sparked industry speculation about a potential collaboration with MediaTek due to architectural similarities, though industry sources dismiss this as marketing spin.
The development, which showcases benchmark scores of up to 1.15 million and features 5G connectivity alongside AI capabilities, represents BYD's strategic push beyond power components into automotive chip development, as China's leading EV manufacturer aims to boost sales by 20% to over 3.624 million units in 2024. This move positions BYD to compete directly with established players like Qualcomm and MediaTek in the rapidly evolving smart cockpit sector, where development speed has become crucial for market competitiveness.
The race to secure chips: TSMC weighs Arizona shift amid mounting pressure
In a pivotal development for global semiconductor manufacturing, TSMC faces mounting pressure to transfer its cutting-edge chip production to Arizona, as the US intensifies its push for domestic semiconductor sovereignty with US$11.6 billion in financial incentives.
While Taiwan's Minister of Economic Affairs J.W. Kuo emphasizes the technical complexities of such transitions and the need for domestic regulatory approval, the chipmaker's plans include launching 2nm production in Taiwan by 2025 before potentially bringing this advanced technology to its Arizona facilities by 2029.
The continued investment from industry giants like ASML and Microsoft in Taiwan, totaling over US$350 million, underscores the delicate balance TSMC must strike between maintaining its technological edge at home and meeting growing demands for advanced chip production on American soil.
Breaking Intel's grip: AMD's market surge reshapes chip industry landscape
In a remarkable industry shift during 2024, Advanced Micro Devices (AMD) has demonstrated unprecedented growth across all major computing segments, with Mercury Research reporting the company captured a record 33.9% revenue share in server chips and its highest desktop CPU market share since 2016 at 28.7%. The company's success story is particularly pronounced in the data center segment, where AMD's revenue of US$3.549 billion surpassed Intel's data center and AI division for the first time in history.
Driven by strong sales of its EPYC processors, Ryzen AI 300-series APUs, and high-performance 3D V-Cache processors, AMD has made significant inroads against Intel's traditional dominance, marking a potential turning point in the semiconductor industry as the company eyes an ambitious 50% market share goal while Intel grapples with product instability issues and declining market position.
Nvidia tightens grip on TSMC's expanding AI chip packaging capacity
In a significant move that underscores the intensifying race for AI chip supremacy, TSMC is set to more than double its monthly CoWoS packaging capacity to 75,000 units by 2025, with industry titan Nvidia already securing a commanding 60% share through early bookings.
Despite facing a moderation in growth rates and delays in its Blackwell series rollout, Nvidia's dominance in the AI GPU market – coupled with robust demand for its H100 and H200 processors – continues to shape TSMC's expansion strategy, even as competitors like AMD and other ASIC developers scramble for larger allocation shares.
The semiconductor giant's aggressive capacity expansion plans, alongside announced price hikes for advanced processes and CoWoS services in 2025, reflect growing confidence in sustained AI-driven demand, with Nvidia poised to maintain its market leadership despite recent investor concerns over its transition from triple-digit to double-digit revenue growth.
Micron charts pragmatic path in China despite US-China tech tensions
In a strategic pivot to navigate the complex US-China tech landscape, Micron Technology is actively rebuilding its presence in the Chinese market through increased engagement and substantial investments, marking a departure from its previously cautious approach.
Under the leadership of China GM Betty Wu, appointed in May 2023, the memory chip giant has ramped up public appearances at state-backed events like IC China 2024, strengthened academic partnerships with prestigious institutions like Peking and Tsinghua universities, and doubled down on its CNY11 billion (US$1.52 billion) investment in its Xi'an manufacturing facility.
The company's renewed push comes as it seeks to recover from a significant market share drop in China—from 58% in 2018 to just 10.76% of its total revenue in the fiscal year 2022—following Chinese government restrictions over security concerns, with CEO Sanjay Mehrotra's recent visit to China underscoring the company's commitment to compliance with local regulations while maintaining its presence in key tech hubs across the country.
Chinese memory maker unseats Samsung in domestic SSD market amid tech rivalry
In a significant shift in China's storage market dynamics, Yangtze Memory Technologies Corp's (YMTC) Zhitai brand has outperformed Samsung Electronics in solid-state drive sales on Chinese e-commerce platforms during the 2024 Singles' Day shopping festival, marking its first-ever victory over the South Korean tech giant. The milestone, achieved just four years after entering the market, was led by the critically acclaimed TiPlus 7100 model, which leverages YMTC's proprietary NAND flash and Xtacking technology to deliver competitive performance with speeds of 2400 MT/s.
The domestic victory comes at a challenging time for Samsung, which faces mounting pressures across its semiconductor business, including delays at its Texas chip plant and increased competition in the AI chip market, while YMTC continues to expand its presence through strategic partnerships, including becoming the official storage partner for the anticipated Chinese game Black Myth: Wukong.
