The semiconductor shortage continues to be a concern for most organizations around the world. While investments in new plants have been made to help increase supply, there is still a concern that there might not be sufficient skilled employees in the field.

In fact, the demand for skillsets in semiconductor and its related industries have been increasing, especially with new factories being developed. Despite technology enables most of these plants to be automated, the reality is, semiconductor companies need a physical workforce in areas of research and development and such.

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For example, in the US alone, the semiconductor industry will need to hire between 70,000 and 90,000 additional workers by 2025.  Reports also show that countries like Taiwan, which is currently the global powerhouse of integrated circuit manufacturing, has an average monthly deficit of specialized workers of approximately 27,700 employees.

As such, semiconductor companies have been investing and partnering with universities and learning institutes to develop new talents. In Malaysia, Micron Technology has announced an investment of RM1 million to strengthen collaboration, research and development projects with local universities over the next five years. The funding will go towards grants supporting research in the areas of semiconductor materials, smart manufacturing and artificial intelligence which are key to the advancement of tech manufacturing in the country.

“Micron leads the industry in both NAND and DRAM technology and Malaysia is critical to our global manufacturing footprint. We hope the funding and collaboration with local universities will strengthen the local semiconductor ecosystem, advance R&D and deepen science, technology and engineering skills in the local talent pool,” said Amarjit Singh Sandhu, corporate vice president and country manager of Micron Malaysia.

University Sains Malaysia (USM) will be the first university partner to receive funding from Micron. The partnership is set to create new growth opportunities between various institutors and companies. Further to that, the partnership between Micron and USM is also in line with the focus area of the National Fourth Industrial Revolution’s policy,and supported by national policies such as the 12th Malaysia Plan and Wawasan Kemakmuran Bersama 2030.

Amarjit also pointed out that Micron foresees opportunities to accelerate the next level of growth, given the increasing global market demand for memory and storage products. Hence, Micron has already invested in a 52.6-acre Center of Excellence for solid state drives assembly in Batu Kawan Industrial Park, Penang which is scheduled to begin operations by the end of 2022.

“The RM1 million grant funding to local universities by Micron today further reinforces the company’s commitment to using its leadership, influence and resources to create positive change, on top of its relentless efforts in employee wellbeing, sustainability, and corporate social responsibility,” said Chow Kon Yeow, chief minister of Penang, who witnesses the signing ceremony.

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2021 has been a turbulent year for the semiconductor industry. While the demand for the chips increased throughout the year, the semiconductor industry was struggling to ensure they could deliver.

In fact, global shipments for the semiconductor industry in 2021 experienced its worst delays. While COVID-19 was often blamed for the disruption and delays in shipments, there were other factors at play as well.

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This included natural disasters, shipping incidents and trade problems across the world. For example, in the UK, delays in shipments were caused by Brexit policies while bad weather conditions hampered shipment deliveries in the Southeast Asia. The US and China’s trade disputes also contributed to the delays.

According to a report by CNBC, trade credit insurer Euler Hermes foresees the semiconductor industry still being the biggest winners. With logistics being disrupted globally, most companies have moved to decided to invest in new chip factories nearer to them. Some companies have even decided to build their own chip plants and reduce reliance on global chip providers.

Analysts at Euler Helmes said that the current semiconductor cycle has been firing on all cylinders since the industry emerged from its worst recession in 2019. In fact, they predicted that semiconductor sales are expected to grow by another 9% and cross US$ 600 billion for the first time in 2022. That’s on top of the 26% growth to US$ 553 billion in 2021, they added.

The new site of German semiconductor manufacturer Bosch is pictured in Dresden, eastern Germany. (Photo by JENS SCHLUETER / AFP)

Major chipmakers like TSMC, Intel, Bosch, SMIC and others have already announced plans to increase their chip production capacity to meet the increasing demand and sales. However, the reality is, the new facilities and updates could take a long time to come online.

Earlier in December, Euler Hermes’ Global Trade Report predicted global supply-chain disruptions could remain high until the second half of 2022 amid renewed Covid-19 outbreaks around the world, China’s sustained zero-Covid policy and demand and logistic volatility during Chinese New Year. Nevertheless, the trade credit insurer expects trade growth to remain strong through 2022 and 2023, with some clear winners across regions and sectors.

“Overall, we expect global trade in volume to grow by 5.4% in 2022 and 4.0% in 2023, and then gradually return to its pre-crisis average levels. However, this comes at the expense increased global imbalances. The US will register record-high trade deficits (around USD1.3trn in 2022-2023), mirrored by a record-high trade surplus in China (USD760bn on average). Meanwhile the Eurozone will also see higher-than-average surplus of around USD330bn”, explains Françoise Huang, Senior Economist for Asia-Pacific at Euler Hermes.

Analysts from Euler Hermes have listed three factors that have driven up sales so far. They include:

• Demand: “Unusually strong demand” for consumer electronics, such as personal computers and smartphones
• Prices: An increase in prices due to tight supply and demand dynamics
• Improved product mix: Further improvement in product mix for semiconductors as a result of higher priced and new generation chips being introduced.

A new dawn for the semiconductor industry

 The CNBC report highlighted four risks the analysts predicted the semiconductor industry will face in 2022. Firstly, hardware sales are expected to take a larger hit from demand normalization after strong growth in the last two years.

Secondly, supply chain disruptions from the pandemic will have a big hit in manufacturing activity. This can already be witnessed by the recent lockdowns in China’s Xian province. The lockdown has already led to disruption of semiconductor provider Micron Technology and Samsung.

Next, the ongoing loggerheads between China and the US as both countries battle for tech supremacy. Restrictions are still in place for Chinese companies acquiring critical U.S. semiconductor manufacturing tech and equipment.

Lastly, there might just be an “increasing frequency of unusually adverse climatic events” proving to be a major challenge for the semiconductor sector, which relies on optimal capacity utilization for its profitability.

As such, 2022 might just be another turbulent year for the semiconductor industry. But, with more organizations finding solutions to deal with the issues in the industry, the problem may not be as severe as previously experienced.

The post Semiconductor industry to experience nearly 10% sales growth in 2022 appeared first on Tech Wire Asia.

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South Korean-based manufacturer of the printed circuit board and packaging substrate for semiconductors Simmtech is on track to complete its RM508 million plant in Penang, Malaysia through its subsidiary Sustio Sdn Bhd.

The 18-acre plant in Southeast Asia is located at Batu Kawan Industrial Park and is anticipated to create more than 1,000 high-skilled jobs in engineering, manufacturing, and quality management by the first half of 2022. Despite the challenges due to the onset of Covid-19, the company said that the facility’s construction is right on track and scheduled for completion in the first quarter of 2022.

The factory will be manufacturing the region’s first packaging substrates for dynamic random-access memory (DRAM) / NAND memory chips and High-Density Interconnect (HDI) PCB for memory module / Solid State Drive (SSD) devices and operations expected to commence in the second quarter next year.

Simmtech is leading the technology evolution as a core supplier for package substrate to Tier-1 semiconductor customers. Notably, the company’s memory module PCB, BOC boards for DRAM package and Embedded Trace Substrate were awarded “World Class Products” by the Korean Government with the largest market share in the world.

Simmtech Southeast Asia managing director Jeffery Chun said the Penang project must go full swing to manage the supply chain, given the global semiconductor supply constraint.

“With synergistic support from federal government agencies, especially the Malaysian Investment Development Authority (MIDA) and state government agencies, our greenfield project is chartering in lightning speed to ramp up capacity to our major customers in this region,” he said.

MIDA chief executive officer Datuk Arham Abdul Rahman said that MIDA targeted more front-end and back-end semiconductor players and their supply chains to consider Malaysia as an alternative site for their production.

Merging Penang into the global semiconductor supply chain

The Penang state government has always set its sights on attracting more investors in the E&E sector, particularly start-ups and small-medium enterprises.

Chun said in a recent statement that Penang has a very well-established electronics industry ecosystem.

“We can access the resources and local businesses here. The state is full of great talents, and it has a solid customer base. Penang also has a dynamic and growing semiconductor industry. That was why we chose to invest in Penang,” he said.

He added that there are more demands for computer chips and mobile chips, which is an excellent period for the semiconductor industry.

Penang Chief Minister Chow Kon Yeow has recently said the investment would bring Penang’s industry to greater heights and further merge the state into the global semiconductor supply chain.

Penang has also witnessed several global heavyweights announcing new investments and expansions of existing facilities in the state over the past two years.

In addition, Penang’s E&E exports were valued at RM231 billion in 2020, which formed more than half of the country’s total.

Earlier in December, Intel Corporation also announced the development of a new chip factory in Penang while Bosch also announced plans to expand its semiconductor operations on the island.

The global semiconductor crisis started in early 2020 and has been a disruptive force in the industry ever since. By the third quarter of 2021, smartphone OEMs (original equipment manufacturers) and component suppliers only received 70% of key components. The chip shortage affected Samsung and Apple – the two largest smartphone manufacturers.

Semiconductors also occupy an ever-increasing space in the automotive industry, consuming about 10% of the market. This can be attributed to several factors, including autonomous driving and driver assistance systems such as power management, safety features, sensing, displays, and vehicle control.

According to reports, the worldwide semiconductor shortage will persist through 2021 and is expected to recover to normal levels by the second quarter of 2022.

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As two of the biggest memory chip suppliers in the world, Micron Technology and Samsung have announced that its chip production have now been affected by the COVID-19 lockdown in Xian, China.

The government lockdown which started on December 23^rd has impacted output levels of Micron’s DRAM assembly and test operations.

Reuters reported that Chinese officials have imposed tough curbs on travel within and leaving Xian from December 23, in line with Beijing’s drive to immediately contain outbreaks as they appear.

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According to a statement by the company, Micron is now working with suppliers operating in the region that face similar challenges as well. This includes tapping the global supply chain including subcontractor partners to help service their customers of these DRAM products.

“We project that these efforts will allow us to meet most of our customer demand, however, there may be some near-term delays as we activate our network.

New or more stringent restrictions impacting our operations in Xi’an may be increasingly difficult to mitigate. We will continue to address the situation proactively and work closely with our customers, suppliers, and logistics partners to ensure we minimize any impact to delivery schedules,” the statement said.

The DRAM (dynamic random access memory) memory chips are an important component in data centers. It’s a type of semiconductor memory that is typically used for the data program code needed by a computer processor to function. This can be either in personal computers, workstations, or even servers.

Meanwhile, Samsung also announced that is has to adjust operations at their manufacturing facilities for NAND flash memory chips. The NAND chips are used for data storage in data centres, smartphones and other tech gadgets.

Reuters reported that Samsung has two production lines in Xian making advanced NAND Flash products, which account for 42.5% of its total NAND flash memory production capacity and 15.3% of the overall global output capacity, according to analysis provider TrendForce.

The lockdown in Xian is one of the latest blows to the already struggling chip production industry. As demand for more chips increases for various devices and use cases, the output is simply not able to cope with it.

Several companies have already announced plans to develop their own chips to meet the growing demand while chip producers like Micron, Intel, TSMC, and others have also announced investments in new chip factories around the world to deal with the shortage.

In October, Micron announced that it is considering building a new memory factory in the United States but that state and federal subsidies will be needed to offset costs that are higher than its factories in Asia. This is part of the company’s plan to invest more than US$150 billion over the next decade to meet increasing demand.

With COVID-19 variants like Omicron and Delta causing a rise in cases globally, many chip producers are now preparing for the reality of another disruption in the supply chain next year.

At the same time, companies like Apple, Tesla, and such that rely on chips are also preparing for delays in getting their products delivered to customers.

The post Omicron affects Micron Technology and Samsung’s chip output appeared first on Tech Wire Asia.

India has always been the country with state-of-the-art research and development centres focusing on chip design–but never one that produces chips locally. The government however plans to change this with a US$10 billion incentive scheme intended to boost the country’s semiconductor and display manufacturing. So far, the announcement has managed to lure American chipset giant Intel Corp to set up its first semiconductor manufacturing unit in India.

Currently, India relies on overseas manufactures for almost all of its semiconductor requirements. Since the world is fighting a severe chip shortage, Prime Minister Narendra Modi’s government is even offering about US$30 billion in incentives to woo some of the world’s largest electronics manufacturers to set up shop in India and give the domestic industry a fillip.

Overall, India is looking to push electronics manufacturing to be worth US$300 billion in the next six years from the current US$75 billion now. The bigger dream though, is to turn India into a global electronics production hub.

What does the plan entail?

Technology Minister Ashwini Vaishnaw told a news briefing the plan would help develop “the complete semiconductor ecosystem – from the design of semiconductor chips to their fabrication, packing and testing in the country”. 

Additionally, as the government statement reads, the program will usher in a new era in electronics manufacturing by providing a globally competitive incentive package to companies in semiconductors and display manufacturing as well as design.”

Currently, under the plan, the government will extend fiscal support of up to 50% of a project’s cost to eligible display and semiconductor fabricators, the government’s statement shows. The country’s administration expects the scheme to create about 35,000 high-quality positions, 100,000 indirect jobs and attract investment worth 1.67 trillion rupees (US$8.8 billion).

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According to Ashwini, the government is looking at least two greenfield semiconductor fabs and two display fabs in the country, while at least 15 units of Compound Semiconductors and Semiconductor Packaging are expected to be established with government support under this scheme.

Under the Design Linked Incentive (DLI) scheme, support will be provided to 100 domestic companies of semiconductor design for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores and semiconductor linked design. It is under the DLI scheme that an incentive of up to 50% will be offered to eligible expenditure. Besides that, product deployment linked incentives of four to six percent will be provided on net sales for five years.

An independent ‘India Semiconductor Mission (ISM)’ will also be set up to drive the long-term strategies for developing a sustainable semiconductors and display ecosystem in the country. According to reports, it will be led by global experts in the semiconductor and display industry, and will act as the nodal agency for efficient and smooth implementation of the scheme.

So far, as per reports by local media, guidelines will be issued in early January 2022 on modalities of applying for semiconductor incentives, and that players will be given about 45-90 days to respond.

Intel joins the semiconductor league in India

Just days after the government announced the scheme promoting semiconductor manufacturing in India, Ashwini welcomed Intel to India in a response tweet to Intel’s India SVP and the president of Intel Foundry Services.

Intel – welcome to India. https://t.co/1Wy90HfAjy

— Ashwini Vaishnaw (@AshwiniVaishnaw) December 28, 2021

Intel, however, told Business Today that it has no new plans to announce at this time. “Intel India is Intel’s largest design centre outside of the US and we have been investing towards accelerating innovation and design engineering in India over the last two decades. However, we have no new plans to announce at this time,” a company spokesperson said.

The post India to allocate US$10b to boost semiconductor sector appeared first on Tech Wire Asia.

Ransomware, everywhere

Tech trends in cybersecurity have generally edged towards targeting remote working victims.

The spike toward record ransomware attacks and data leaks in 2021 looks likely to spill over into the coming year.

Cyber-extortion heists break into a victim’s network to encrypt data, then demand a ransom, typically paid via cryptocurrency in exchange to unlock it.

A swathe of factors has fueled the trend, including the booming value of cryptocurrencies, victims’ willingness to pay and the difficulty authorities have in catching attackers.

Businesses and the most-at-risk retail sector should start now, rather than later, to prepare for the incoming onslaught.

James Forbes May, vice president for the Asia Pacific at Barracuda believes that there will be a renewed focus on governments prioritizing cybersecurity initiatives, building alliances with vendors, and sharing data with other countries.

More electric vehicles

We’ve seen how the devastating impacts of climate change exacerbated by the COVID-19 pandemic have wreaked havoc on lives in the Asia Pacific. 

One way nations here are looking to ameliorate climate change is to promote the replacement or at least, increase of zero-emissions vehicles on the roads. 

This picture taken on September 9, 2021 shows a Nissan Motor autonomous vehicle during a press preview for a field operation test of Easy Ride, a driverless mobility service, at the Minato Mirai business district in Yokohama, Kanagawa Prefecture. (Photo by Kazuhiro NOGI / AFP)

Tech trends in the Asian automotive industry are definitely moving towards increased EV design, manufacture, but uptake may be fragmented, depending on the country.

Some nations with growing EV markets include India and Japan.

But the spotlight will be on China, a huge player in the Asian EV industry, whose government has pushed for more EVs to curb carbon emissions.

More Chinese automakers and players are collaborating, whereas home-grown Chinese stalwarts like Nio are targeting richer overseas markets.

As of now, a plethora of companies, even those traditionally in consumer tech, have put one leg into the proverbial electric boat to start production and sales of EVs. They include Huawei and  Xiaomi. Smaller countries such as Malaysia have made some semblance of headway into promoting EVs too, with taxation policies.

However, the biggest issue impeding its adoption in Asia is simply, the cost required to acquire EVs, which is especially true for the economically developing SEA.

Global leading automakers have, however, expressed interest in smaller markets such as Malaysia, though.

The semiconductor complexity will go on

Experts say the global chip shortage is like to continue until 2023 at least. 

Key chip supply chain player Malaysia may see increased competition from manufacturing leaders such as Vietnam, although more investments are coming in, such as from Bosch and Intel. 

Malaysia’s semiconductor industry may need time to recover, though, given the impact of not just COVID-19 lockdowns, but the recent flash flooding which has displaced tens of thousands of people and wrecked chip plants there.

China is trying to reduce its reliance on Taiwan’s TSMC to grow its home-grown SMIC. China is the largest buyer of 5G smartphones and also supplies a majority of consumer tech to the world.

Chinese big tech brands are moving to in-house design and manufacture of their own chips, one of the tech trends seen in the West too. They include Oppo and Alibaba.

More Big Tech regulation in China

In China, the big tech crackdown has been going full steam, as regulators have slapped fines and withheld licenses for a litany of charges that Chinese big tech have flouted.

At the same time, the state authorities have come up with draft after draft of legislation to govern the movements and operations of big tech in the country.

Even foreign firms aren’t spared, prompting some to even leave China. Some of these laws include anti-monopoly, data privacy, foreign IPOs, and more. 

Trade sanctions on China-sourced goods to the US have resulted in a trade war that has affected Chinese and global supply chains. This dynamic arguably underlies these recent actions by Beijing, particularly where it concerns the movement of citizen information or data across borders.

As a result, China has been expanding its influence into SEA, where some nations have a more favorable disposition towards Chinese tech.

Part of China’s strategy to avoid the US and move to trade in other markets has resulted in their interest in being a part of regional trade agreements. China is now part of the Regional Comprehensive Economic Partnership (RCEP), which starts January 1.

They also aim to rejoin the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in a post-Trump administration.

Meatless meat

Meat alternatives have become common in an increasing number of western households, thanks in part to Beyond Meat and Impossible Food plant-based products. They have improved taste-wise, and are cheaper now, partly because of increased awareness of the impact of meat production on the environment. 

In Southeast Asia, however, real meat still trumps plant-based or lab-grown meats — simply because it’s too expensive. 

Ironically, plant-based mock meat has been very popular in the region for decades, owing to a large number of vegetarians. Asia, is, after all, a region home to two of the world’s largest religions that eschew meat, namely, Buddhism, and Hinduism. 

However, most mock meat products suffer from sub-par texture, flavor, and closeness to real meat, which makes them unattractive to the mass market of meat-eaters. 

However, the demand is there — just not enough for manufacturers and developers to reach a critical mass production point where the prices match or even go lower than real meat products.

Producers are, however, taking stock of this trend as some Asian nations are already working on commercializing or at least, exploring these efforts, including Singapore, Thailand, and Vietnam.

Singapore-based Growthwell is one, and they aim to produce completely plant-based, nutritionally complete meat alternatives. 

With additional reporting by Joshua Melvin with Julie Jammot for Agence France-Presse

The post 2022: Five tech trends in the Asia Pacific appeared first on Tech Wire Asia.

Since December 2020, China’s largest and most important chipmaker, Semiconductor Manufacturing International Corp (SMIC), has been denied access to US suppliers of advanced manufacturing equipment. Apparently, the Chinese chip manufacturer had ties with their country’s military back home, a claim that SMIC outright denied.

However, despite the US Commerce Department adding SMIC to an export blacklist, officials were still suspicious of apparent loopholes used by the Chinese tech giants to get their hands on manufacturing tools used to make semiconductors. So now, US officials want to put an end to this once and for all, according to a report by the Wall Street Journal.

Citing people familiar with the matter, the Journal also noted that “while officials at several agencies are pushing for the tougher approach to China, leaders at the Commerce Department remain opposed to some of the plans because they say they will hurt US companies,” a fact that is agreeable among a handful market experts.

Diving deeper into SMIC’s restriction, the Chinese chip manufacturer is prohibited from buying US tools “uniquely required” to build chips with 10-nanometer circuits and smaller, which is close to the leading edge of semiconductor manufacturing technology. 

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Since many manufacturing tools can be used to produce chips at a variety of sizes, exporters took the view that they were still able to sell tools that could be adjusted to produce the smaller chips and the restriction “became effectively language that means nothing,” Journal said, quoting one of the people.

For that, the Defense Department wants to change the wording to restrict SMIC’s access to items “capable of” producing semiconductors with 14-nanometer circuits and smaller, the report by Journal stated, broadening the list of items SMIC won’t be able to get.

Even Chinese artificial intelligence start-up SenseTime Group was placed on a US investment blacklist, days ahead of has its now-postponed US$767 million Hong Kong initial public offering (IPO). To recall, SenseTime’s subsidiary was included on the entity list in 2019 over the use of its technology in China’s mass detention of mainly Muslim ethnic groups in its Xinjiang region.

However, SenseTime flagged the blacklisting of its subsidiary in its IPO prospectus and said that the restrictions “do not apply to other entities within the group that are legally distinct” from that unit.

That is not it — American officials are also considering adding more Chinese technology companies to the Commerce Department’s entity list and to the Treasury list. Just last month, the US government added a dozen more Chinese firms to its export blacklist. There were also additions to the entity list, include quantum computing companies, semiconductor firms, and Chinese businesses that have contributed “to Pakistan’s unsafeguarded nuclear activities”.

The post US to shut all doors to Chinese chip manufacturer, AI Giant appeared first on Tech Wire Asia.

Chiang took the role in Semiconductor Manufacturing International Corp (SMIC) almost a year ago, amidst a leadership shuffle. According to SMIC, Chiang had resigned from his position and the board from Thursday onwards to spend more time with his family, reported Reuters.

Chiang was a former research director at Taiwan’s TSMC (Taiwan Semiconductor Manufacturing Company Limited) and left his position to join rival SMIC in mid-December of 2020.

Interestingly, his resignation comes two months after the Chinese chipmaker’s former chairman, Zhou Zixue, resigned on grounds of health reasons.

On top of that, three other members also resigned from the board, including co-chief executive officer Liang Mong Song, who had threatened to quit in December last year. He would remain in his executive role, however, said SMIC. 

According to Reuters, these resignations were “not due to any disagreements with the board”. The company also doesn’t expect any “material impact” on its operations. 

SMIC: A new hope for China?

SMIC is the largest contract chipmaker in China, considered the Chinese “equivalent” to Taiwan’s TSMC. It is backed by a state-affiliated chip fund and represents China’s hope for chip self-sufficiency. 

China is dependent on TSMC, as well as chips from the west to power its massive consumer electronics market. 

Due to the ongoing global chip shortage, tech giants globally have been scrambling to get their own chips, including Apple and Samsung. A primary method has been to design their own chips.

Similarly, a number of Chinese companies have heeded the government’s clarion call for chip self-sufficiency, with the latest being Oppo. 

Last month, unlikely contender Alibaba also revealed what is possibly China’s most advanced chip, the Yitian 710. 

A series of unfortunate events

With all that said, things have been complicated for the communist-ruled country for years. The ongoing US-China trade war and sanctions have impacted quite a number of Chinese tech giants such as Huawei. 

SMIC is seen as Beijing’s golden ticket to produce advanced chips, in order to deal with the multiple sanctions by the US.

This was compounded by prior resignations by executives in SMIC, as well as a spate of further US restrictions on tech, citing national security concerns.

As if that’s not enough, the country is also wrangling with a chronic shortage of scientific and engineering talent within the semiconductor industry.

Furthermore, Chinese social media has expressed collective outrage at their largest chip exporter, Taiwan’s TSMC, who has agreed to provide the US with chip data. 

Detractors believe such a move would jeopardize the country’s semiconductor goals, with experts reckoning that the US is making this move to target China so they may attain chip leadership.

The US claims this request for information was to understand the global chip shortage better, but China refuses to be placated. 

What will this mean for China and SMIC, though?

According to CNN, shares of SMIC fell by four percent in Shanghai and Hong Kong last week, following a regulatory warning by the Shanghai Stock Exchange. It is unknown what the warning was about, though.

Despite these issues impeding the company’s plans for high-end chip making, its financial performance has been strong, with a rise of 22.6% for its third-quarter profit. This is purportedly boosted by increased demand for semiconductors due to the global chip shortage. 

However, there may be a silver lining on the horizon, though, as the US has reportedly allowed the likes of Huawei and SMIC to purchase goods, despite their presence on the US trade blacklist. 

Nevertheless, China remains steadfast in its goals for technological superiority and self-sufficiency, pledging to constantly improve its tech, including chipmaking and even quantum computing. 

For SMIC, at least, they remain committed to investing in technology and expanding its production capabilities — recently investing US$8.87 billion to build a chip plant in Shanghai and a US$2.35 billion one in Shenzhen.

According to Bloomberg, SMIC executives last week said they were working on resolving shortages, ensuring expansions are on time, and accelerating licensing approval processes for output expansion equipment. 

Co-CEO Zhao Haijun expects that SMIC will triple its current capacity in the next few years, working with suppliers to speed up procurement and delivery. 

The TSMC rival also expects an 11 to 13 percent revenue increase from three months ago and a gross margin gain of about 35%.

Zhao expects that demand will continue to outpace supply throughout 2022, a sentiment shared by many industry players and watchers. 

The post Is China chipmaker SMIC beleaguered by resignations? appeared first on Tech Wire Asia.

This news comes amidst an ongoing global chip shortage that has affected supplies for and prices of goods, from vehicles, to paint, to consumer goods.

Earlier last month, Tech Wire Asia reported that the two companies were in talks to jointly build a chip factory in Japan’s Kumamoto Prefecture. The Taiwanese chipmaker had announced plans to commence construction of the factory in 2022. 

This week, both parties sealed the deal for a US$7 billion plant, which is expected to be fully operational by 2024.

Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s largest contract chipmaker, accounting for over half of the world’s supply of semiconductors. 

TSMC produces chips for tech giants across the world, including Apple, Huawei, and AMD, among others, placing it on the map as a leading-edge producer of semiconductors for the world. 

In the fourth quarter of 2020 alone, TSMC recorded a market share of 55.6% of the global semiconductor foundry market, whereas regional rival Samsung occupied only a mere 16.4%.

Tuesday’s statement by the chipmaker further clarified last month’s announcement and confirmed that the initial expenditure on the plant would come up to US$7 billion.

Previously, Tech Wire Asia reported that the Japanese government was going to cover “up to half” of the US$7 billion in costs, but the statement did not elaborate beyond that the government would be “offering strong support”, reported AFP.

Local Japanese media, however, reported that the government is considering pumping over US$4 billion into the venture.

In the statement, the firms will form a joint Japanese subsidiary, with Sony’s SSS holding less than 20% of equity, with an investment of approximately US$500 million. 

“While the global semiconductor shortage is expected to be prolonged, we expect the partnership with TSMC to contribute to securing a stable supply of logic wafers, not only for us but also for the overall industry,” SSS President and CEO Terushi Shimizu said in a statement.

Experts reckon that the ongoing chip shortage would go on until 2022, sending governments and chipmakers around the world into a flummox to diversify and rely on other chipmakers.

According to the companies, the expected plant is expected to produce around 45,000 12-inch wafers monthly, and create around 1,500 professional jobs.

According to a report previously carried by Tech Wire Asia, the factory will “make semiconductors used for camera image sensors, as well as chips for automobiles and other products”, adding that the factory would be TSMC’s first chip production operation in Japan.

This comes on the back of the Japanese government’s approval of a US$338 million semiconductor research project to develop cutting-edge chip technology with TSMC earlier in June this year. 

It was reported in August this year that TSMC had maxed out its production and bookings of both 3nm and 5nm chips. TSMC is also the most valuable publicly-traded company in Asia, beating the likes of Tencent, due to its advanced manufacturing nodes.

This has led to a chain reaction where electronics companies such as Qualcomm, which supplies chips to phone makers, seek out alternatives such as Korea’s Samsung to produce its signature Snapdragon processors used in mobile phones. It was also reported that the Taiwanese company was prioritizing chips for high-value clients such as Apple, further crippling other industry players amidst the crippling global chip shortage.

With additional reporting by © Agence France-Presse

The post TSMC, Sony building first chip factory in Japan appeared first on Tech Wire Asia.

This is, however, despite the Taiwan chipmaker saying that it would not “reveal confidential client information to the US government”. 

Taiwan’s TSMC (Taiwan Semiconductor Manufacturing Co) is arguably the most important player in the global semiconductor industry. 

It also said in a statement last week that it will “respond to” a request by the US Commerce Department that sought information from chip companies in the semiconductor supply chain. Other chipmakers include South Korea’s Samsung Electronics and the United State’s Intel. 

As reported by SCMP, the specifics of the information that TSMC will provide to the US is still unknown. However, the company said it won’t disclose “confidential information” from clients and “will not harm the rights of our customers and shareholders.”

According to the US government, their request was aimed at getting to the root of the global chip shortage. With that said, no Chinese company was directly involved.

Despite these assurances, however, the Chinese were not placated. 

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According to SCMP, who spoke to Xi Chen, an academic committee member at Peking University’s Institute for Global Cooperation and Understanding, the data could “potentially help Washington impose sanctions on Chinese companies in a more precise way”.

The semiconductor market in China is by far the largest, accounting for about 35% of the global market share, surpassing the US, Europe, Japan, and even Taiwan, which is home to the largest manufacturer of semiconductor chips.

Criticisms of Taiwan’s TSMC appeared on multiple digital media platforms, such as Weibo, WeChat, and various websites.

“We believe that TSMC, Samsung, and other semiconductor companies may provide relatively insensitive information in response to the US government,” said Eric Tseng, chief executive of Taiwan-based research firm Isaiah Research.

“But key information related to customers’ trade secrets and rights, such as customer lists, order contents, and amounts, will be kept confidential to maintain the long-standing trust between TSMC and its customers,” he added.

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The US Commerce Department requested that domestic and overseas players in the semiconductor value chain “voluntarily” provide information about their sales, inventory, and client details to quantify semiconductor supply chain risks.

As the world’s most advanced wafer foundry, TSMC plays a critical role in China’s quest to be chip self-sufficient. Previously, the Taiwanese foundry had complied with US sanctions on Huawei Technologies Co, which had crushed the once-behemoth of a smartphone maker.

Additionally, TSMC had also ceased the production of chips for Phytium Information Technology Co, one of the seven Chinese supercomputer-related organizations added to the US Entity List in April, dealing a blow to China’s pursuit of supercomputing.

In September this year, top chip manufacturers in China have been speeding up efforts to boost production, with the country’s top contract chipmaker, Semiconductor Manufacturing International Corporation (SMIC), is planning to build a new fabrication facility that will become China’s largest such facility used for products other than memory.

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