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China Focuses on 3rd Generation Semiconductors in Aim for Self-Sufficiency

The People Republic of China has always released 5-year plans that have a goal of achieving something. And in the latest, 14th 5-year plan China has an eye on the semiconductor industry. Specifically, China wants to develop independence and self-sufficiency when it comes to semiconductors. With tensions between the US and China raising, it is a smart move to have domestic technology to rely on. The new plan starts next year, 2021, and ends in the year 2025. In that period, China will devote financial resources and human workforce that will hopefully enable its goal. The primary aim for this 14th plan seems to be 3rd generation semiconductor technology. What is meant by that is a technology like gallium nitride (GaN) and silicon carbide (SiC). These technologies would be a nice addition to China's portfolio of semiconductors, so we should wait and see what comes out of it.

Samsung and SK Hynix to Impose Sanctions Against Huawei

Ever since the Trump administration imposed sanctions against Huawei to stop it from purchasing parts from third-party vendors to bypass the ban announced back in May, some vendors continued to supply the company. So it seems like some Korean manufacturers will be joining the doings of the US government, and apply restrictions to Huawei. According to the reports of South Korean media outlets, Samsung Electronics and SK Hynix will be joining the efforts of the US government and the Trump administration to impose sanctions against Chinese technology giant - Huawei.

It is reported that on September 15th, both Samsung and SK Hynix will stop any shipments to Huawei, where Samsung already stopped efforts for creating any new shipments. SK Hynix is said to continue shipping DRAM and NAND Flash products until September 14th, a day before the new sanctions are applied. Until the 14th, Huawei will receive some additional chips from SK Hynix. And it is exactly SK Hynix who is said to be a big loser here. It is estimated that 41.2% of SK Hynix's H1 2020 revenue came from China, most of which was memory purchased for Huawei phones and tablets. If the company loses Huawei as a customer, it would mean that the revenue numbers will be notably lower.

COVID-19 Drives Rise in Global Fab Equipment Spending, SEMI Reports

Soaring pandemic-inspired demand for chips that power everything from communications and IT infrastructures to personal computing, gaming and healthcare electronics will drive an 8% increase in global fab equipment spending in 2020 and a 13% increase in 2021, SEMI announced today in its World Fab Forecast report. Rising demand for semiconductors for datacenter infrastructures and server storage along with the buildup of safety stock as U.S.-China trade tensions intensify are also contributing to this year's growth.

The bullish trend for overall fab equipment investments comes as the semiconductor industry recovers from a 9% decline in fab spending in 2019 and navigates a roller-coaster 2020 with actual and projected spending drops in the first and third quarters mixed with second- and fourth-quarter increases. See figure below:

US Government Could Blacklist Chinese Chipmaker SMIC

The Trump administration has reportedly been considering adding to Chinese chipmaker SMIC (Semiconductor Manufacturing International Corporation) to the trade blacklist of Chinese companies, restricting the company of doing any business with the United States and/or with any of its affiliates. The original report comes from Reuters and it states that the move came from Pentagon after considering whatever SMIC should be placed on a blacklist. It is so far unclear if other US agencies support the decision, however, it should be public in the near future. The company has received the news on Saturday and it was "in complete shock" about the decision. Shortly after the news broke, SMIC stock has fallen as much as 15% amid the possible blacklist. If SMIC would like to continue working with American suppliers, it would need to seek a difficult-to-obtain license from the government.

NVIDIA GeForce RTX Ampere AIB Cards Listed on Overclockers UK, Official EU/UK Pricing Published

NVIDIA just yesterday made a big announcement and forced everyone to turn their head and check out what are they doing. Today, we are finding the first listings of Add-In-Board (AIB) partner cards and their respective price points. Thanks to the findings of a Reddit user u/slyquick we have information about the pricing of RTX Ampere cards in the UK/EU, specifically on the Overclockers UK website. There are listed several models of AIB cards, covering the whole range of RTX 3070, 3080, and 3090. NVIDIA has officially published the UK/EU pricing of the cards with Founders Edition (FE) GeForce RTX 3070 costing $499 in the US, costing about £469. The OCUK website lists RTX 3070 AIB cards at £449 and the highest costing models are about £499.

Next up comes GeForce RTX 3080, a GPU costing $699 in the US, is being officially listed for £649 by NVIDIA. On the OCUK website pricing starts at £639, and goes as high as £848.99 for ASUS ROG Strix Gaming OC card. The bigger brother of the RTX Ampere lineup - the RTX 3090 - is priced at $1499, while NVIDIA lists it at £1399 for EU/UK pricing. AIB cards are going anywhere from the NVIDIA FE card at £1,399, all the way up to at £1589.99. This is a big markup compared to the FE model, however, AIB cards are known for providing better cooling solutions and better power delivery circuit.

DigiTimes Research: Korean Memory Makers See Output Value Surge in Q2

According to the latest DigiTimes Research report, it is said that Korean memory makers have experienced a surge in chip output value. Korean memory manufacturers are Samsung Electronics and SK Hynix, which both have seen a massive growth of 22.1% on a yearly basis and 13.9% sequentially in the second quarter of 2020. This is no small feat as the demand for memory in the smartphone industry has been slowed in that period due to the COVID pandemic, however, it was offset by strong demand from servers and notebooks. When the output of Korean memory giants is fused, Samsung and SK Hynix had combined revenue of KRW22.9 trillion or about 20.8 billion USD. The demand for memory is expected to continue its growth due to the 5G headset market.

NVIDIA Might Close the Deal of Arm Acquisition Before Summer Ends

Last time we have reported that the situation with NVIDIA taking over Arm is getting serious, and it was reported that their talks were getting quite advanced. Today, we are getting new information regarding this, from the sources of Evening Standard. According to their information, the deal is supposed to be done by the time summer ends. That puts the timing of the deal very close to the present, so we could expect to see more details very soon. The venture is worth a lot, as Softbank is asking as much as 40 billion GBP, which is around 52.62 billion USD. It also goes to show just how much Arm Ltd. has grown in value from the 31 billion USD number Softbank paid in 2016 to acquire it.

Qualcomm Could Deliver Chips to Huawei

In the ave of the news that Trump administration has forbidden TSMC to have Huawei as its customer, Huawei seems to be exploring new options for sourcing the best performing mobile processors. As the company has turned to the Chinese SMIC semiconductor factory, it still needs a backup plan in the case of Chinese semiconductor manufacturing flops. So to combat US sanctions, Huawei will use already made chips form the US company - Qualcomm. By sourcing the processors from Qualcomm, Huawei is losing some benefits of customs design like better system integration, however, it will gain quite powerful mobile processors. As Qualcomm is known for providing the fastest processors for Android smartphones, Huawei has ensured that it remains competitive. Qualcomm is reportedly now negotiating with the US government about delivering the chips to Huawei, and if it is allowed, Qualcomm will gain a big customer.

US Aims to Bring Chip Manufacturing Industry Back to Its Soil

The US is one of the leading countries when it comes to chip design technologies and know-how; however, when it comes to actual manufacturing those designs, it's fallen from grace in recent years. Once the leader in both design and manufacturing, nowadays the US can only claim some 12% of the world's semiconductor production. The rest of it is mainly produced in Asia, where TSMC stands as the industry juggernaut, with other companies stretching across Taiwan, Japan, and most recently (and surging) China - the country has more than doubled its 300 mm manufacturing sites since 2017. This places some strain on the US' dependence from foreign shipments; and the country is looking to bridge that gap in its perceived national interests by investing heavily in silicon manufacturing to be brought back to the country. Recent slippages from Intel when it comes to keeping its manufacturing lead have apparently also instilled preoccupation amongst US policy makers.

Intel Accused of Infringing FinFET Patents of the Microelectronics Institute of the Chinese Academy of Sciences

Today we are finding out that Intel has allegedly infringed FinFET patents of Microelectronics Institute of the Chinese Academy of Sciences. On July 28th, the patent review committee has heard an application that accuses Intel of violating a patent 201110240931.5 commonly referred to as FinFET patent. The patent dates back to 2011, and it comes from the Chinese Academy of Sciences, mainly Microelectronics Institute. The Chinese patent holders are asking for as much as 200 million yuan, which roughly translates to 28,664,380 US dollars. Given that this patent infringement is a major one for Intel, it is sure that a company will be pursued extensively in court. All of the Intel's semiconductors use FinFET technology, and if this is true, the violation is rather big. For more in detail reading, please refer to the source which goes through the history of Intel and Microelectronics Institute patent violation filing.
Intel 3rd generation FInFETs

DigiTimes Research: China 14th 5-year Plan to see IC Foundry Capacity Expand 40%

China's upcoming 14th five-year plan (2021-2025) will continue to highlight technology and capacity upgrades as the core of its semiconductor self-sufficiency strategy, with foundry capacity projected to expand 40% from the preceding plan and fabrication process expected to advance to 7 nm, according to Digitimes Research.

Bolstered by national policies in the 13th five-year plan, China's IC manufacturing industry is expected to see combined revenues double to CNY240 billion (US$34.28 million) in 2020 from 2016, and may also move 12 nm to production by the end of the year after having volume produced 14 nm process.

TSMC to Stop Orders from Huawei in September

TSMC, one of the largest semiconductor manufacturing foundries, has officially confirmed that it will stop all orders from Chinese company Huawei Technologies. The Taiwanese silicon manufacturer has decided to comply with US regulations and will officially stop processing orders for Huawei on September 14th of this year. Precisely, the company was receiving orders from HiSilicon, a subsidiary of Huawei Technologies that focuses on creating custom silicon. Under the new regulation by the US, all non-US companies must apply for a license to ship any American-made technology to Huawei. Being that many American companies like KLA Corporation, Lam Research, and Applied Materials ship their tools to many manufacturing facilities, it would be quite difficult for Huawei to manufacture its silicon anywhere. That is why Huawei has already placed orders over at Chinese SMIC foundry.

TSMC 5 nm Fab in Arizona will Change Global Semiconductor Supply Chain: Report

TSMC has just recently announced that they will be building a semiconductor factory in the US, thanks to the pressure from Trump administration. The 5 nm Fab will be built in Arizona, with construction starting in 2021. It will be finished in the year 2024 when the plant will operate at a capacity of 20,000 wafers per month. This is not a high number as TSMC Fabs usually operate at a rate of 100-150K wafers per month, however, the amazing thing is the location of the Fab. The US Fab in Arizona is set to change the global landscape of the semiconductor supply chain, as per the latest report from DigiTimes Research.

Arizona is a place in the US where lots of companies are building semiconductors. Intel, Raytheon, Microchip, ON Semiconductor, VLSI, Freescale, NXP, STMicroelectronics, Honeywell, Marvel, Amkor, Philips, and Western Digital have their facilities there and Arizona can be considered one of the key places for semiconductor manufacturing in the US. With TSMC adding their manufacturing facilities to that list as well, there could be a change in the supplier ecosystem. In light of the need for TSMC 5 nm Fab, the world's leading OSAT (Outsourced Semiconductor Assembly and Test) suppliers may be encouraged to set up local production in Arizona to help TSMC with its plans. A lot of OSAT providers are headquartered in Taiwan, however, if there is a need, they are possibly going to build their manufacturing facilities in Arizona. This alone could change the way semiconductor manufacturing facilities are supplied, and the US could become a major center of OSAT providers.
TSMC HQ

TSMC Says it Still Won't Build a Fab in the US

TSMC, as one of the largest silicon manufacturers in the world, has been subject to pressure from the Trump administration to build a Fab and manufacture silicon on US soil. The reasoning behind this is that the US government could order chips that are supposed to be used in military applications. For security reasons, they need to be manufactured on US grounds and "checked" by the US government. However, it seems like a Taiwanese company has no concrete plans to realize the building of the US Fab.

Thanks to the report of DigiTimes, TSMC has confirmed that they have resisted requests from the US government, and will not build a Fab on US soil for the government. They haven't dismissed the possibility of building one or silicon manufacturing facilities in the US completely. TSMC chairman Mark Liu has told DigiTimes previously that if the company wants to build a US Fab, it will do so because of consumer demand, not the government demand. And that is understandable. It is much easier to work with regular customers compared to the US government which would force a company to go through rigorous security levels to deliver chips.
TSMC HQ

Huawei Moves 14 nm Silicon Orders from TSMC to SMIC

Huawei's subsidiary, HiSilicon, which designs the processors used in Huawei's smartphones and telecommunications equipment, has reportedly moved its silicon orders from Taiwan Semiconductor Manufacturing Company (TSMC) to Semiconductor Manufacturing International Corporation (SMIC), according to DigiTimes. Why Huawei decided to do is move all of the 14 nm orders from Taiwanese foundry to China's largest silicon manufacturing fab, is to give itself peace of mind if the plan of the US Government goes through to stop TSMC from supplying Huawei. At least for the mid-tier chips built using 14 nm node, Huawei would gain some peace as a Chinese fab is a safer choice given the current political situation.

When it comes to the high-end SoCs built on 7 nm, and 5 nm in the future, it is is still uncertain how will Huawei behave in this situation, meaning that if US cuts off TSMC's supply to Huawei, they will be forced to use SMIC's 7 nm-class N+1 node instead of anything from TSMC. Another option would be Samsung, but it is a question will Huawei put itself in risk to be dependant on another foreign company. The lack of 14 nm orders from Huawei will not be reflecting much on TSMC, because whenever someone decides to cut orders, another company takes up the manufacturing capactiy. For example, when Huawei cut its 5 nm orders, Apple absorbed by ordering more capacity. When Huawei also cut 7 nm orders, AMD and other big customers decided to order more, making the situation feel like there is a real fight for TSMC's capacity.
Silicon Wafer

US Government Could Stop Chip Shipments from TSMC to Huawei

US Government, precisely the Trump administration, is considering placing a ban on chip export from TSMC to Huawei. With Huawei being in the middle between the US and China fight for global technology dominance, the Trump administration is seeking to limit the progress of foreign forces trying to match or beat US technology. There were previous efforts by the US government to influence Huawei's fate, with them claiming that Huawei 5G equipment is capable of supplying China with intelligence, meaning that China tries to spy on US citizens. While those claims were later disregarded by Huawei, the Trump administration managed to do some damage to the face of the company.

The TSMC representative who spoke to Reuters about the potential ban said that the company (TSMC) does not answer hypothetical questions and that they don't talk about their customers. To achieve more control over the China semiconductor manufacturing, the US government plans to place a licensing model on all of their US-made semiconductor equipment, meaning that all the production lines are possibly in danger if the US doesn't approve shipments of their machines to other countries.

ASRock Revenue Soars Due to the Ryzen Effect

ASRock, a Taiwanese manufacturer of motherboards and graphics cards, had an amazing 2019 when it comes to the revenue. Surging around 31% on a Year-over-Year (YoY) basis and delivering revenue of 443.16 million US Dollars, ASRock is expecting to deliver even better results in 2020. When it comes to the underlying reasons for this notable increase, ASRock attributes it to the recent success of AMD's Ryzen family of processors and strong demand for the platform surrounding it. Adopting the AMD Ryzen processors in Mini-PCs, motherboards and server boards, ASRocks see strong demand for these products that should carry over in 2020.

Another reason for strong profits and even better chapters ahead is the developments in the US and European markets. Having previously been focused on the Asian market and marketing its products to that part, ASRock changed the strategy and started advertising its brand more to other regions like the US and Europe. This new strategy is progressing well and is expected to continue in the coming years. Additionally, it is worth noting that ASRock's graphics card sales started to turn profitable in 2019, and now that part of ASRock is attributing to profits as well.

GTA V was in Top US Game Sales Charts for 74 Months

GTA V, made by Rockstar and Take-Two, is possibly the biggest game ever designed, with the massive player base and massive profits fulfilled. Perhaps the most interesting report today is that the game has stayed in the top game sales chart in the United States for the past 74 months. Month after month, gamers have been buying digital copies of the game to a point where it maintained some of the top spots on the charts. Since the game launched in 2013, it got support for two generations of consoles and PC platforms, making it accessible to a huge base of gamers. With constant updates and new content, the game managed to keep players interested and busy with new quests to conquer.

"Recurrent consumer spending on GTA Online grew 23% YoY to a new record, driven by the July release of the Diamond Casino Resort update. This update was GTA Online's biggest content launch ever, delivering record daily, weekly, and monthly active users in July and again in August," CEO of Take-Two Interactive Strauss Zelnick said in November.

TSMC Becomes Asia's Most Valuable Company

Taiwan Semiconductor Manufacturing Company, Limited, also known as TSMC shortly became Asia's biggest and the most valuable company with a market cap of over 8.02 trillion New Taiwan Dollars, which roughly translates to 262.75 billion US Dollars. Becoming the biggest Asian company, TSMC's market capitalization has now surpassed Samsung for the first time in the history of company existence.

The underlying reasons for becoming a company that TSMC is today, are plenty. Firstly, they are providing customers with the flexibility of choosing any manufacturing node, whatever it is the latest 7 nm or the older ones like 180 nm. They have a choice whatever they want to use something older and less expensive or something newer for high-performance and lower power. Additionally, TSMC is re-investing a big part of its profits into research and development efforts to stay competitive and deliver only the best technology to its customers, on time.

A Reprieve: Select PC Hardware Exempt of Tariffs on Chinese Imports to the US

The US Trade Representative on Friday granted a reprieve to the increased tariffs being levied at China-imported electronic goods. The exemption, valid for one year until 20th August 2020, includes some products that will be welcome to PC hardware enthusiasts, including motherboards, graphics cards, desktop cases, "mouse input devices" valued over $70, "trackpad input units" valued at over $100, and power supply units that output more than 500 W.

The exempts have come as fruits of requests from US stakeholders in the hardware space; should imports be available only from China (meaning there are no alternate sources of said materials) or if the tariff could cause "severe economic harm", a temporary reprieve on the levies could be sought. And so the exempts were requested, and now granted. Prices paid before the announcement of the reprieve that included the added tax penalties are final; the exemption is only valid for orders after September 20th. This means the 25% increased rates (itself an increase on the initial 10%) on the tax basis are now frozen when it comes to the aforementioned hardware. This means companies no longer have to scramble to source their manufacturing to countries other than China, and that prices increased for end consumers on the basis of the tax increase are now meritless.

Microsoft Won't Move Production Out of China

Previously, we have reported that major OEMs are looking and exploring for ways of moving production outside of China, into other Asian countries, because of tariffs imposed by US-China trade war and rising labor costs. The original report from Nikkei specifically indicated that Microsoft will move its Xbox and Surface manufacturing to Thailand and Indonesia, while the production in China would stop.

However, Tom's Hardware had a conversation with Microsoft regarding the situation and the outcome was contradictory to the report of Nikkei. Microsoft told Tom's Hardware "that there currently aren't any plans to do so", which means that current manufacturing facilities are there to stay. We still don't know how will the rest of OEMs react or comment, but HP also said to Tom's that it shares industry concerns and will not comment any further to the rumors, adding that tariffs are hurting consumers.

AMD Radeon RX 5700 XT 50th Anniversary Edition Not a Worldwide Release, Available only in US and China

Apparently, AMD isn't celebrating its 50th anniversary in all parts of the globe, judging from recent reports regarding its AMD Radeon RX 5700 XT 50th Anniversary Edition. Apparently, the exclusive, limited-edition graphics card will only be available for US and China customers - two of the biggest worldwide markets, for sure. This is a strange decision from AMD, since a sold unit is a sold unit; however, this may be a sign of really limited availability of the graphics card and the hardware powering it.

Trendforce: DRAM Pricing Could Fall Up to 25% in 2019 Following Huawei ban

Trendforce, via its market analysis division DRAMeXchange, announced yesterday that it expected DRAM pricing to fall even more than previously estimated. The motive behind this is Huawei's ban following the US-China trade war, which will limit Huawei's ability to deliver its server and, especially, smartphone products. With companies being banned from trading with the Chinese firm, a voracious consumer of the US-tied DRAM production has just evaporated without a trace. This means increasing inventories amidst a freeze in demand due to uncertainty in the overall markets, which will obviously tip the supply-demand balance.

This has led TrendForce to officially adjust its outlook for 3Q DRAM prices from its original prediction of a 10% decline to a widened 10-15% decline, with an additional 10% decline in the fourth quarter. And of course, after prices hit rock bottom, they can only go up, which is why DRAMeXchange expects prices can only increase - and DRAM manufacturers' outlook improve - come 2020. Gear up for those DRAM upgrades this year, folks.

ARM Revokes Huawei's Chip IP Licence

As the trade war between the US and China continues to unfold, we are seeing major US companies ban or stop providing service to China's technology giant Huawei. Now, it looks like the trade war has crossed the ocean and reached the UK. This time, UK based ARM Holdings, the provider of mobile chip IP for nearly all smartphones and tablets, has revoked the license it has given Huawei.

According to the BBC, ARM Holdings employees were instructed to suspend all interactions with Huawei, and to send a note informing Huawei that "due to an unfortunate situation, they were not allowed to provide support, deliver technology (whether software, code, or other updates), engage in technical discussions, or otherwise discuss technical matters with Huawei, HiSilicon or any of the other named entities." The news came from an internal ARM document the BBC has obtained.

US Senator Proposes a Ban on "Manipulative" Video Games

Yesterday, a US senator called Josh Hawley announced a bill to legalize banning of so-called "manipulative" video game design in the United States. The decision was proposed yesterday to US Congress.

The "Protecting Children from Abusive Games Act" would prohibit all games geared towards children, that implement a "pay to win" model where a player is progressing through the game by paying for it. The Senator also added that titles with paid-for in-game awards, such as loot boxes, are supposed to get banned. For overseeing and enforcing the ban, the Federal Trade Commission would be in charge. The FTC in-turn would hire state attorneys to prosecute companies violating the ban.
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