Ming-Chi Kuo noted that ASML is in rumors to increase the price of its chip-making tools for TSMC. But that won’t be the exact case. Perhaps, the Taiwanese semiconductor firm will likely bargain with ASML and suppress it for price reductions.

TSMC is one of the biggest customers of ASML. The latter used to sell large lithography machines to the former to print circuit patterns onto silicon wafers.

Wall Street stated a few points that hint at why ASML could raise the price of its chip equipment for TSMC. Firstly, ASML has planned to achieve €30 to €40 billion in revenue range by 2025. The firm is taking new steps to enhance its sales by next year.

Secondly, TSMC and other customers of the Dutch chip equipment supplier are looking forward to more advanced chipmaking processes by next year. This may ultimately increase the demand for ASML’s highest-end EUV tools pricing €350 million.

Lastly, ASML is seeing a major decline in semiconductor stocks for the time being. Customers like Intel and Samsung didn’t make much progress. But TSMC has recently reported blockbuster earnings with 54% profit. This could be a reason to hike chip equipment prices for the Taiwanese semiconductor firm.

TSMC is highly dependent on ASML for chipmaking tools. Thus, the Dutch firm could take advantage of this point to some extent by raising its price. However, the U.S. government may subsidize this dealing with better profits on both sides.

Note that neither ASML nor TSMC has confirmed this news so far. Hence, it is better to take this rumor with a grain of salt at present.

ASML rumored to increase chip-making tool price for TSMC (Image Credits: ASML)

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The U.S. is looking for every loophole that can help Huawei in the advanced chipmaking process. A recent report said that the Biden administration may soon add more Chinese firms to the Entity list, blocking the growth of the chip network in China.

Apart from keeping an eye on China, the U.S. is now investigating other foreign suppliers who can lend a hand to Huawei in semiconductor manufacturing.

Inputs reveal that the U.S. Commerce Department started probing TSMC for chip dealings with Huawei. The investigation is in the early stages and aims to check if the chipmaker has been making any AI or phone chips for Huawei for the time being.

If TSMC is found breaching the U.S. export regulations, it might face huge penalties or even a prohibition on using advanced chipmaking tools or techs temporarily.

Under this investigation, the U.S. authorities have targeted the Mate 60 series’ Kirin 5G 9000s chip and recently developed AI Ascend processor. Both these chipsets significantly contribute to China’s progress in the semiconductor industry.

The Commerce Department inquired TSMC about having any direct or indirect (via different names) chip shipments to Huawei in the past or at present. Investigators are also looking into other related aspects like “know-your-customer checks”.

Issues for TSMC

Further details note that the investigation could trouble TSMC to some extent. The Taiwanese chipmaker is one of the key chipset suppliers for U.S. firms.

Huawei AI chipsets (Image Credits: Huawei)

For instance, Apple and Nvidia mainly rely on TSMC for their processors. Also, the Biden administration was planning a $6.6 billion subsidy for the chipmaker to develop its third fabrication unit in Arizona. However, an investigation could halt benefits for some time.

TSMC responded to this investigation and said that it follows all the U.S. export regulations without fail. Although if there is a problem, then it will take action to guarantee compliance in all possible aspects.

“TSMC is a law-abiding company and we are committed to complying with all applicable regulations. If we have any reason to believe there are issues, we will take prompt action to ensure compliance.”

HuaweiCentral’s Take

The U.S. will try every effort to push back Huawei as done in 2019. But this time, the Chinese OEM is focusing on being self-reliant. A recent report claimed that Huawei Kirin 7nm chip performance can match the level of the 5nm processor of TSMC.

How far the U.S. will stretch this investigation on TSMC chip dealings with Huawei would be worth looking forward to.

U.S. investigates TSMC on chip dealings with Huawei (Image Credits: Huawei/TSMC)

(source)

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TechanaLye – a Japanese semiconductor research company performed a teardown between two Huawei phone chips. One belongs to the Pura 70 series: Kirin 9010. Whereas, the other one comes out of a top-end Huawei model from 2021.

As per the details, the circuit diagrams of both processors differ from each other. The latest Kirin chip designed by HiSilicon belongs to SMIC and has adopted a 7nm process while the 2021 device’s SoC comes from TSMC and runs on 5nm tech.

Comparing the performance aspects, TechanaLye found the Huawei Kirin 7nm chip draws level with TSMC 5nm. The chips differ in size (SMIC 7nm = 118.4 sq. mm.; TSMC 5nm = 107.8 sq. mm.). Yet ‘they have similar areas and performance levels’.

The CEO of TechanaLye – Hiroharu Shimizu notes that HiSilicon improved its design capabilities over time. Huawei’s subsidiary now makes better and stronger processors that are comparable to TSMC 5nm chip regardless of wider circuit width.

In 2021, TSMC used to ship 5nm-based chipsets to Huawei smartphones. But at that time, the U.S. blacklisted the Chinese OEM, dragging it out of its export trade. The government even prohibited foreign suppliers to ship advanced products to China.

TSMC’s Kirin 9000 chip on left, and SMIC’s Kirin 9010 chip on right. (Image Credits: TechanaLye)

Following these challenges, Huawei joined forces with SMIC to develop its Kirin chips based on the 7nm process. The company revived its Kirin chip with Mate 60 Pro last year and introduced a new and more optimized SoC in the form of Kirin 9010 with Pura 70 Ultra. Now we may grab another iconic processor with the Mate 70.

Hiroharu further reveals that the Pura 70 Pro runs on 37 processors paired with memory, sensors, cameras, power supply, and visual functions. 14 of these semiconductors belong to HiSilicon while 18 are from other Chinese suppliers. 5 come from foreign developers such as SK Hynix (DRAM) and Bosch (motion sensors).

TechanaLye’s CEO said:

“In effect, the only semiconductors subject to the U.S. regulations are cutting-edge server chips for AI and other applications. As long as the chips do not pose a military threat, the U.S. is probably allowing their development.”

He adds that the U.S. trade export controls have only made China more self-dependent in producing semiconductors. China chips’ capabilities lag just three years from TSMC and it may catch up soon in the advanced chipset battle.

China is already seeking ways to expand its chip mass production and improve its existing technology. However, the latest report hints that Chinese firms will soon create hurdles for TSMC. The Taiwan chipmaker is already dealing with minimizing the circuits, which is a difficult task. It would be interesting to see how this matter moves ahead.

|| Source – Nikkei Asia ||

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Whether it’s Kirin processors or Ascend AI chips, Huawei is working hard on both fronts. Before checking the latest developments, let’s go through a small flashback.

The “U.S. bans Huawei” is not a new story to Chinese consumers. In 2019, the American government blacklisted Huawei in the name of U.S. security concerns. This ultimately cut the supply of highly advanced chipmaking tools to China.

Before this ban, Huawei used to print its chip through TSMC. However, foreign trade restrictions led the Taiwan chip maker to give up on new Kirin processor production. As a result, Huawei put a halt on its high-end Kirin chipset project.

Turning point:

Although the tables turned in August 2023 when Huawei introduced the Mate 60 series with a 7nm Kirin 9000s 5G chip. The smartphone launch not only caused a stir in the Chinese market but also gave a headache to the U.S. Commerce Department.

Even though the chip has been developed using old equipment and tech materials, it was enough to show that Huawei is coming back on track. The U.S. became busy finding why, where, and how the chip was made. Meanwhile, Huawei started looking at how to increase its chip yields.

Major aids:

The Chinese phone maker started teaming up with native partners like SMIC for its chip development. As per the details, the Kirin 9000s uses an N+2 7nm tech from SMIC. More new Kirin chips based on SMIC tech are also rumored to be underway.

Kirin chipset (Image Credits: HiSilicon Kirin)

Huawei is also taking help from the stocked chip-making equipment by ASML to develop new processors. The Chinese government, on the other hand, has eventually begun backing up the company with more funding for chip development.

Huawei further believes that if they don’t start using self-made chips now, the tech gap will continue to persist. It seems the U.S. sanctions appeared as an opportunity for the firm to become independent.

New development:

In April 2024, Huawei introduced the Pura 70 Ultra with a new Kirin 9010 chip. TechInsights found that the new processor belongs to the SMIC foundry. This news has once again created a buzz in the U.S. on Huawei’s progress.

Both Huawei and SMIC are now in the headlines for developing a 5nm chip. The latter is said to lay chip manufacturing lines in Shanghai for mass production. Rumors regarding 5nm and 3nm chip development are also flying in the air.

Although Huawei put a full stop to these talks by saying that the company is currently focusing on resolving 7nm issues instead of making new developments.

Huawei AI chip is another end of the rope. Ascend 910B has become quite popular in China. Chinese firms are constantly picking the respective chip over the U.S. alternatives such as Nvidia A100. Tests even proved that Huawei AI processors are more efficient than that of Nvidia.

Huawei AI chips (Image Credits: Huawei)

A recent rumor has added that Huawei is now testing powerful Taishan cores that are 175% faster than the Kirin 9000s. Hence, we might see a dynamic 5nm processor with the Mate 70 series later this year.

Rivals like TSMC says that Huawei will take years to catch up in the chip race. But regardless of the tough U.S. ban and trade challenges, Huawei is trying its best to rise in the chip production game. It would be interesting to see how Huawei will win this game!

Despite U.S. ban, Huawei trying well to catch up with rivals in the chip race (Image Credits: Huawei)

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Inputs are coming from the TSMC shareholders’ meeting. The seniors and other executives talked about the progress of the company in the semiconductor race.

During the discussion when a shareholder asked how the company sees Huawei and other competitors in the market, the Chairman of TSMC – Mark Liu said that Huawei and China are no threat to the firm’s solid position in the chip market.

“TSMC considers every competitor very very carefully. We will always have competitors. But it has nothing to do with Huawei or not.”

Even though Huawei is making better moves in the semiconductor game, TSMC believes that it’s “impossible” for Huawei to catch up. Agreeing with the above statement, the Taiwanese firm’s president Wei Zhejia said no one can beat us in chip tech.

Huawei and China can’t catch up in the chip race, says TSMC (Image Credits: TSMC)

Mark Liu further states that TSMC is currently at the top when it comes to the semiconductor subject. Despite rivals like Samsung and Apple’s efforts, the firm is ruling the chip market and remains positive for its growth until the next few years.

TSMC also points out that Huawei lacks advanced chip-making tools which is the root cause of its defeat in this competition. On the flip side, TSMC is looking for 2nm process production and might initiate it by the next year (2025).

Huawei’s is gradually pacing:

After the U.S. government blacklisted Huawei in 2019, the company is once again trying to stand firm in the chip market. Mate 60 Pro appeared as a turning point in the company and the Chinese OEM started making new Kirin 5G processors.

But its technology still runs on 7nm which questions when the company will enter the top vendors in this topic. But as said “slowly and steadily wins the race”, it would be worth seeing whether any firm will defeat TSMC in the time ahead or not.

Huawei Kirin PC chips (Image Credits: Huawei)

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According to the Korean media – Plusenews, Samsung is planning to begin production of 2nm chips by 2025. Not only that the company is looking to shift to 1.4nm by 2027. It’s revealed that Samsung is also working on the second generation 3nm chip with improvements made in the first gen design.

Taiwan’s TSMC is moving in the same direction to gain momentum in 2nm chip production with additional chip plants. The largest chip producer is planning to put 2nm chip production in effect by 2025. Initially, TSMC looking to produce 30,000 wafters as of the Q4 of 2025.

Both TSMC and Samsung are working on the next generation of processing technologies to conduct a rapid production of 2nm chipsets in early 2025.

The report also suggests that TSMC is facing some challenges with GAA (Gate-All-Around), a next-generation technology with a higher efficiency of electricity usage compared to the conventional FinFET process.

But Samsung has acquired success in GAA tech for its 3nm manufacturing and the estimated yield rate is over 60 percent. This might give an edge to Samsung in terms of efficiency and time-saving. However, TSMC is yet to announce its position on this matter.

(Via, Source)

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According to the information, TSMC’s 3nm process technologies bring performance improvement, better power management, and yield rate. In terms of numbers, the 3nm technology currently offers as much as 18% speed improvements at the same power input as its predecessor and up to 60% increment in logic density.

MediaTek also hailed its partnership with Taiwan’s TSMC and said that both firms have collaborated to make a high-performance chip.

“We are committed to our vision of using the world’s most advanced technology to create cutting-edge products that improve our lives in meaningful ways,” said Joe Chen, President of MediaTek.

“This collaboration between MediaTek and TSMC on MediaTek’s Dimensity SoC means the power of the industry’s most advanced semiconductor process technology can be as accessible as the smartphone in your pocket,” said Dr. Cliff Hou, Senior Vice President of Europe and Asia Sales at TSMC.

MediaTek announced that the first 3nm Dimensity flagship chip will be used in smartphones, tablets, smart cars, and various other devices starting in the second half of 2024.

(source – MediaTek)

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According to the information, the latest move from TSMC aims to get huge state support for the $11 billion plant as the EU looking to boost the supply chain of important products.

The European Union has approved the European Chips Act, a 43 billion euro subsidy plan to double its chipmaking capacity by 2030. This is an effort to catch up with Asia and the US after shortages and high prices during the COVID-19 pandemic created havoc for the continent’s carmakers and machine builders.

Both TSMC and Germany have been pursuing conversations to establish a new chip company in the country since 2021. The host will give away up to 5 billion euros in support to form the factory in Dresden, capital of the eastern state of Saxony.

“Germany is now probably becoming the major location for semiconductor production in Europe,” German Chancellor Olaf Scholz said, less than two months after Intel announced a 30 billion euro plan to build two chip-making plants in the country.

“That is important for the resilience of production structures around the world, but it is also important for the future viability of our European continent, and it is of course particularly important for the future viability of Germany.”

(source)

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To explain, chip companies use large silicon wafers to create multiple chips at once. Then, the wafer is then sliced into many individual processor dies.

It’s normal, especially early in the life of an all-new manufacturing process, for many of those dies to end up with defects—either they don’t work at all, or they don’t perform to the specifications of the company that ordered them.

Usually, chip designers (such as Apple) have to pay for each die for whatever the outcome. However, Apple is a big TSMC customer and the chip maker is ready to bear the cost of making defective dies for it. On the other hand, Apple will save billions of dollars on chips from this deal.

Details reveal that nearly 70% of early 3nm dies are usable and the number could go up with improvements in the process technology.

The latest offer from TSMC is the result of Apple’s dominance in its current revenue. It’s said that Apple accounts for 23 percent of the $72 billion that TSMC earned in 2022. Thus, making it the largest TSMC customer.

Another report suggests that Apple could buy all of TSMC’s 3nm production capacity at least for a year before it could even open it for other buyers.

(source – Theinformation, Arstechnica, Macrumors)

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The talks between TSMC and the German government for this plant are in effect since 2021. This plant will work as a fab production plant and operate with partners Bosch, Infineon, and NXP.

Once approved, the TSMC board will finalize the letter of intent from Germany for funding and it will follow the response on the establishment of the new chip plant.

Germany plans to invest around 20 billion euros in the semiconductor industry in the coming years, one of several European governments that wants to lower dependency on Asian countries and build capacity in the region by offering subsidies through the EU Chips Act.

(source)

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