For years, Apple has been using Qualcomm modems in its iPhones before shifting to Intel’s when its relationship with the former started to sour. Following that, news began to surface that the iPhone maker may just create its own modems to cut reliance on Qualcomm.

However, things might take a different turn now as Apple is said to have selected Taiwanese chip giant TSMC to make its 5G iPhone modems instead.

According to Nikkei Asia, quoting people familiar with the matter,  Apple plans to adopt Taiwan Semiconductor Manufacturing Co’s 4-nanometer chip production technology to mass-produce its first in-house 5G modem chip from 2023 onwards.

Additionally, Apple is also apparently working on its own radio frequency (RF) and millimeter wave components to pair with the modem.

That is on top of an in-house power management chip that Apple is producing specifically for the modem. For context, all of the components in the latest iPhone series are provided by Qualcomm.

This isn’t an isolated move by Apple, however. The company has been attempting to reduce its reliance on Qualcomm for several years and the latter has also recently confirmed that its share of iPhone modem orders will drop to about 20% in 2023.

Both companies finally settled a lengthy legal battle over patent royalties in 2019. To be fair, the modem chips segment has long been dominated by Qualcomm, which has built a large patent wall around the technology, as well as Taiwan’s MediaTek and China’s Huawei Technologies.

Intel, which supplied modem chips to Apple alongside Qualcomm since 2016, dropped out of smartphone modem chip development and sold the business to Apple in 2019.

“In addition to saving money on fees it currently pays to Qualcomm, developing its own modem would pave the way for Apple to integrate TSMC’s chip with its in-house mobile processor, multiple sources said,” according to the report by Nikkei.

Apple’s relationship with TSMC isn’t a new one. In fact, the Taiwanese chip titan has been a vital partner for Apple in its strategy of designing more of its own components, and is the sole producer of iPhone processors and M1 Mac processors. 

The move would eventually give the US tech giant more control over its hardware integration capability as well as boost the chips’ efficiency.

“Currently, most mobile chip developers integrate 5G modem systems onto the processor chip,” added the Nikkei report.

Here’s what TSMC is providing Apple with

Modems in smartphones such as Apple’s connect to cellular networks and let devices browse the web, download apps, and make phone calls.

It requires more layers of engineering than some other types of processors. Apple began in-house work on modems about three years ago, and the part typically takes at least two years to build and another year and a half to test.

Basically, for the new 5G iPhone modem, sources told Nikkei that Apple is using TSMC’s 5-nm chip production to design and test-produce the chip.

It will then use the even more-advanced 4-nm technology for mass production. For a phone to go on sale globally, it must be qualified to work on many local networks, a process that requires rigorous field testing by expert engineers.

So with these in mind, it seems that it will take some time after 2023 for the commercialization of Apple’s own 5G modem.

The post Apple: Bye Qualcomm, hello TSMC? 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.

The post China boiling mad over Taiwan’s TSMC handing over chip data to the US appeared first on Tech Wire Asia.

It has been more than 18 months since the pandemic struck, leading to a global shortage of semiconductor chips. Ever since then, numerous countermeasures and collaborations were announced between industry players in order for supply to meet the growing demand.

The latest talk of the town is a possible collaboration between the world’s largest contract chipmaker, Taiwan’s TSMC, and Japan’s Sony Group Corp.

Apparently, TSMC (Taiwan Semiconductor Manufacturing Co.) and Sony are considering building a chip factory in Japan together.

First reported by Nikkei Asia, it is also said that the Japanese government is ready to cover up to half of the US$7.15 billion investment. The new factory by both the companies would be built on Sony-owned land in Kumamoto Prefecture.

The goal, according to the outlet’s anonymous sources, would be to have the US$7 billion construction project finished in time for the factory to be fully operational by 2024.

This collaboration seems timely, as the ongoing chip shortage has prevented many companies from meeting industry demand. In response, companies and countries around the world have been scrambling to become self-sufficient.

According to the report, “the factory will make semiconductors used in camera image sensors, as well as chips for automobiles and other products, and is slated to go into operation by 2024”, adding that the factory would be TSMC’s first chip production operation in Japan.

The factory will have an expected output of 40,000 wafers per month based on the 28nm node.

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With manufacturing bases in Kumamoto and Nagasaki prefectures, Sony currently controls half of the world’s market share for sensors used in smartphones and cameras. The sensors are manufactured in-house, but the semiconductors that process images are procured from third parties, including TSMC.

Nikkei Asia even noted that Japan’s top auto parts maker Denso is considering being a part of the project by setting up equipment at the site — “The Toyota Motor group member seeks stable supplies of chips used in its auto parts.”

However, in exchange for subsidizing the project, the Japanese government “will seek a commitment” that supplies of these chips will prioritize the Japanese market’s needs first.

To recall, in April this year, TSMC CEO CC Wei expected chip supplies to remain constrained, at least until late 2022. CEO Lisa Su, of another major player AMD,  said in September that she believed supplies would improve by next year.

According to Omdia, 28nm semiconductor chips are slated to see strong growth, at least up to 2025, due to their good value for money, as well as applications in various industrial and consumer products such as OLED TVs, IoT devices, and edge computing.

However, whilst it seems that measures like this will ease the global semiconductor shortage now, the IDC market research group reckons there could be an oversupply problem by 2023.

The probable upside to that, however, is that consumers are likely to enjoy cheaper products that utilize these chips, and hopefully, this would result in cheaper costs for businesses and enterprises at large to drive higher cloud and edge uptake.

The post Just how impactful will TSMC and Sony’s semiconductor factory be? appeared first on Tech Wire Asia.

The delays in supply have been so bad that the world’s biggest contract chipmaker, the Taiwan Semiconductor Manufacturing Co. better known as TSMC, has started telling its customers that it plans to invest US$100 billion over the three years to ramp up its capabilities in advanced semiconductor technologies, according to a letter to clients seen by Nikkei Asia.

TSMC accounts for more than half of the world’s semiconductor foundry market in 2020 and this year, a variety of industries are scrambling for the company to resolve the semiconductor chip shortage in the global auto market, in consumer electronics, smartphones, and many others. The foundry had previously revealed that it has record levels of capital expenditure of up to US$28 billion this year as its factories work beyond capacity to meet heightened demand.

TSMC supplies almost all of the world’s major chip developers worldwide including Apple, Qualcomm and Nvidia. TSMC and other Taiwanese chipmakers including United Microelectronics and Powerchip Semiconductor Manufacturing Corp. play a central role in the global semiconductor supply chain.

The chip supply shortage was exacerbated by the pandemic and the transformative role it played in how people work, learn, and live post-pandemic, said C.C. Wei, TSMC’s CEO, in the letter. “We are seeing a structural and fundamental increase in underlying demand driven by key long-term growth megatrends including 5G and high-performance computing,” he continued.

The letter also informed TSMC’s clients that in order to accommodate the substantial investment to keep up with a “structural and fundamental increase” in chip demand, the chipmaker is asking clients to accept price increases starting from December 31 this year, for the four quarters of 2022.

Suspending price cuts is a rare move by TSMC, which usually lowers prices each quarter for its chip design clients after their products go into mass production and run smoothly, sources with knowledge of the company told Nikkei Asia.

TSMC’s three-year $100 billion investment plan will include building “greenfield” chip manufacturing plants and expanding existing fabrication sites, according to the CEO’s letter. The company is already hiring thousands of workers, buying land and equipment, and is initiating construction on multiple new production facilities worldwide.

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Besides the new plant it is already building in the US, construction is also underway in multiple Taiwanese cities, and this will include the 3-nanometer chip facility – the world’s most advanced chip production technology – in the southern Taiwanese city of Tainan.

“The increased capacity will improve supply certainty and help protect complex global supply chains that rely on semiconductors,” said the letter from CEO Wei. “We ask for your patience as we expedite the building of new fabs and capacity.”

TSMC’s rival and customer Intel recently said it would re-enter the contract chipmaking business, willing to to spend US$20 billion between now and 2024 to build two new chip plants, to be located in Arizona – the same US state where TSMC is building their American facility.

The post How Taiwan’s TSMC will counter the global chip shortage appeared first on Tech Wire Asia.

One company in Taiwan – Taiwan Semiconductor Manufacturing Co. – accounts for more than half of the world’s semiconductor foundry market in 2020 and now, the world is scrambling for that company to resolve the shortage of semiconductor chips in the global auto sector.

The company is also the go-to producer for Apple, Huawei, AMD, and many more. Now, Taiwan is being courted for its capacity to make leading-edge computer chips. In terms of market share, in the fourth quarter of 2020 alone, TSMC recorded a market share of 55.6% in the global semiconductor foundry market, while Samsung occupied 16.4% of the market. 

TSMC’s role in the global supply chain has been under the radar until it came to recent prominence as the auto industry suffered shortfalls in chips used for everything from parking sensors to reducing emissions. 

The severity impacts carmakers including Germany’s Volkswagen AG, Ford Motor Co. of the US, and Japan’s Toyota Motor Corp. forced to halt production and idle plants and now Taiwan’s importance has become too big to ignore.

Taiwan’s economy minister acknowledged the matter recently and reckons that major Taiwanese chipmakers were willing to prioritize supplies for automakers. In a separate statement, TSMC said it was addressing the chip supply “challenges” as their top priority.

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“The automotive supply chain is long and complex and we have worked with our automotive customers and identified their critical needs. TSMC is currently expediting these critical automotive products through our wafer fabs. While our capacity is fully utilized with demand from every sector, TSMC is reallocating our wafer capacity to support the worldwide automotive industry,” it said.

Can the world make do without TSMC?

Currently, Taiwan, South Korea, and the US are home to the world’s leading semiconductor manufacturing facilities, known as foundries or fabrication facility. Companies from Japan and the US supplies the vast majority of the specialized equipment that goes into those manufacturing facilities. For its part, TSMC is the world’s largest and most advanced contract manufacturer. TSMC’s high volume production is largely sustained by supplying custom chips designed by the two of the largest smartphone makers, Apple and Huawei.

The increase in demand from carmakers for chips in late 2020 had been difficult to meet, given that TSMC’s supply had already been squeezed by strong appetite earlier in the year from other manufacturers. Even the US, European and Japanese automakers are even lobbying their governments for help, with Taiwan and TSMC being asked to step in.

The importance of TSMC and Taiwan as a chip manufacturing location is obvious and even if the company builds fabs outside of its country, they will be trailing-edge: TSMC’s 5 nm fab in Arizona will only be operational in 2024, by which time the company will already be mass-producing next-generation 3 nm chips in Taiwan. 

The business ecosystem within Taiwan that has facilitated TSMC’s rise is also unlikely to be replicated overseas quickly under market conditions, even with the cooperation of friendly governments such as in the US.

Since technologies have become more specialized, custom chips will be needed to meet the computationally intense needs of machine learning. That said, TSMC’s ability to design and manufacture the most advanced chips capable of hosting artificially intelligent applications puts it in a very strong position in a market that is estimated to reach $16 billion in the next three years.

The post TSMC dominance as the world’s largest chipmaker explained appeared first on Tech Wire Asia.

Ahead of Apple’s upcoming iPhone launch, A-series chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), reported a 22% surge in quarterly sales.

According to Bloomberg’s calculations from TSMC’s monthly sales data, the latter saw revenue for the three months to September climb to a record NT$356.4 billion (US$12.4 billion), up from NT$293 billion a year earlier.

Apple is one of the chipmaker’s biggest customers and business will often increase in the months before Apple unveils new iPhones and the holiday season, amid solid and growing demand for chips for 5G, Internet of Things (IoT) and high-performance computing applications.

For the first nine months of the year, TSMC reported record accumulated sales of NT$977.722 billion, up 29.9% from a year earlier.

Reports suggest that TSMC is likely to receive a boost during the quarter as its second-largest customer Huawei Technologies raced to stockpile supplies before a US ban on shipments to the Chinese telecom giant came into effect last month. 

Meanwhile, rival chipmaker Samsung Electronics reported recent earnings that beat analyst estimates after it’s mobile and chip businesses benefited from the curbs on Huawei.

Concurrently, Taiwanese chipmakers United Microelectronics Corp. and MediaTek also reported strong sales, suggesting a broad recovery in the industry.

The computer chips made by TSMC aren’t just the brains inside smartphones, laptops, and video game consoles — they’re also core components of almost every kind of electronic equipment in the world, from that used in data centers to F-35 fighter jets. Along with nearly 500 others, Apple, Huawei, Sony, Qualcomm, Broadcom, and HiSilicon are all TSMC’s clients.

Leading companies like Huawei and Apple design but don’t actually manufacture their own chips unlike integrated device manufacturers, such as Intel and Samsung, which design and then make the chips used in their own products.

TSMC’s model is that of a dedicated “pure-play” foundry: it only operates on a contract basis and doesn’t sell devices of its own design. 

Over the last three decades, TSMC has invested in 18 state-of-the-art chipmaking facilities — called “fabs,” for “fabrication facility” — in Taiwan and today the firm accounts for more than half of the US$42 billion foundry segment of the semiconductor industry. In July this year, it raised its 2020 outlook, highlighting that revenue this year will grow by more than 20% in dollar terms. 

TSMC executives also affirmed plans to build a plant in Arizona, saying that the US administration and the state of Arizona closed the cost gap for building the fab. 

The company had previously said the $12 billion facilities will begin construction in 2021, with production targeted to begin in 2024. 

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