01 Company Trend(Apr. 9)

Google launched Axion, a self-developed Arm-based data center processor, with performance improved significantly

In the recent Cloud Next held in Las Vegas, Google, a technology giant, officially unveiled its long rumored Arm-based data center processor - Axion. The launch of this processor indicates that Google started an important step along the road of self-development of chip, and is expected to provide more efficient and powerful computing performance for its cloud services.

It is learned that the Axion processor is designed based on British chip designer Arm’s Neoverse V2, and adopts the standard ARMv9 architecture and instruction set. Although Google did not disclose specific details about the number of cores, process technology, cache or memory configuration, the officially released renderings show that Axion processor adopts a monolithic design, indicating its high degree of integration and optimization of performance.

It is worth mentioning that although the architecture of Neoverse V2 can support the configuration of up to 256 cores, Google did not give more information about it. However, from the known data, Nvidia and AWS have designed 72 and 96 cores based on V2 respectively, which also triggered speculation about the number of cores of Axion processors.

Comments:

It is rumored that the Axion processors will have 30% higher performance than the fastest general instances of Arm processors available in the market today. Although Google did not explicitly indicate the processor it compared, the industry widely speculates that it refers to its Ampere VM or Amazon’s Graviton 3 based on Neoverse V1. Compared with Intel and AMDs “current generation processors of the same kind”, Google claims that Axion processors have 50% higher performance and 60% better energy efficiency. However, Google did not provide specific data to support these claims, but only vaguely quoted the "internal data of Google cloud", so the outsiders still have reservations about these performance improvements.

It is foreseeable that the Arm system will play an important role in the process that Google provides services for its cloud and advertising platform. With the increasing scale and complexity of data centers, there are increasingly urgent demand for efficient and powerful processors. The launch of Google’s Axion processor has undoubtedly injected new vitality into this field and is expected to drive the technological progress of the whole industry.

However, for Google, if the Axion processors are to be widely recognized and accepted in the market, more specific data and evidences will be needed to support its claim of performance improvement.

02 Industry policy(Apr. 9)

South Korean government explores semiconductor investment incentives to accelerate construction of giant clusters

On April 9th, at the semiconductor issue review meeting chaired by the President of South Korea, the trend of the global semiconductor supply chain and the progress of the South Korean semiconductor giant cluster plan were explored in depth. The representatives of major enterprises such as Samsung Electronics, SK hynix and Naver presented at the meeting to discuss and review the implementation progress of the giant semiconductor cluster construction plan.

It is learned that the South Korean government plans to invest as much as 622trn won to build a giant semiconductor cluster of 16 new wafer fabs. The plan aims to improve South Koreas competitiveness in the global semiconductor market and promote the development of related industrial chains via concentrated investment. During the meeting, as the feasibility study had been abandoned, the government decided to accelerate the infrastructure construction in the cluster, including key resources such as power and water, to ensure the smooth construction of public institutions.

It is particularly worth mentioning that, in view of Samsung Electronics plan to invest 360trn won to build Yongin system semiconductor cluster by 2047, The South Korean government decided to use the pre-consultation system of environmental impact assessment to greatly shorten the construction period, so that enterprises can invest their funds in actual production and R&D more rapidly. Considering the plan that SK hynix planned to invest 122trn won to build Yongin semiconductor cluster by 2045, the government also responded quickly and decided to increase the water supply (equivalent to the guaranteed 270,000 tons of water) to meet the production needs of enterprises.

Comments:

The USA, Japan and China have started to provide semiconductor subsidies, and the South Korean government must follow the global trend. On April 8th, local time, the US government announced that it would grant TSMC with a subsidy of US$ 6.6bn to build a semiconductor factory, much higher than the previously expected US$5bn. Similarly, the Japanese government decided to grant a subsidy of 590bn yen (US$ 3.89bn) to Rapidus, a joint venture of eight major Japanese companies, including Toyota, Kioxia, Sony, NTT, Softbank, NEC, Denso and Mitsubishi UFJ Bank. The South Korean government is forced to follow the global subsidy competition led by the USA to avoid wasting its efforts made over the years. However, it is worth noting that global semiconductor subsidy competition does not face no risks. Excessive subsidies may lead to market distortions and even trade disputes.

03 Company Trend(Apr. 8)

SK hynix announced to mass produce the 6th generation 10nm DRAM ahead of Samsung

Faced with the fierce competition of the global semiconductor market, SK hynix, a memory giant of South Korea, recently announced that it will start mass production of the 6th generation (1c)10nm DRAM in Q3 this year,  ahead of Samsung Electronics, another memory giant, which plans to start mass production before the end of the year.

According to insiders of the industry, SK hynix has developed a detailed internal roadmap to ensure that the products can pass customers’ certification and start mass production in Q3 as scheduled. This important progress marks another breakthrough of SK hynix in the field of DRAM technology, and also exhibits its competitive strength in the global semiconductor market.

It is worth noting that the industry-leading DRAM product Double Data Rate (DDR) 5 16Gb (Gigabit) is expected to be officially certified to the compatibility with Intel’s server platforms. Once SK hynixs DRAM products are successfully certified to use with Intel’s CPU, it is expected that they will quickly attract a large number of demands from large technology companies with operating data centers.

Comments:

Intel and AMD, as leading enterprises in the global server CPU market, hold 70-80% of the market share. Therefore, the compatibility of SK hynixs products with Intel platform is of great significance to its position in the global semiconductor market. Moreover, due to the wide application of DDR5 technology and enterprises’ advance layout, SK hynix will quickly start to sell its new generation DRAM products to global large technology companies such as Amazon and Microsoft after obtaining Intel’s certification.

Meanwhile, with their mass production plans, SK hynix and Samsung Electronics will push the global DRAM market into a new development stage. This will also urge other semiconductor companies to speed up technology R&D and market layout to seize market opportunities. In the future, the competition in the global semiconductor market will be more intense, and technological innovation and market expansion will play a key role for enterprises to win competitive advantages.

04 Market Trend(Apr. 10)

Western Digital raises prices of all its product lines!

Western Digital recently sent a letter to inform its partners that it is or will raise prices of its hard disk products since April 8. The main reasons for the inflation of prices lie in the strong demand from the AI market and the impact of Taiwan earthquake on the stability of the supply chain.

Scott Davis, senior vice president of Western Digital Channel and Regional OEM Sales, clearly stated in his letter to the partners of Western Digital that the demand for all HDDs and SSDs made by Western Digital went beyond expectations, and there was a short supply of related products in the market. Coupled with the tight supply chain of the whole industry, Western Digital had to continue to raise product prices to cope with market changes.

It is learned that the price increase involves all product lines of Western Digital including HDD and SSD and new prices have been adopted for some products immediately, which will be adjusted at any time according to the actual market situation.

In the notice, Western Digital also specially reminded its partners that it is difficult for the company to meet the unplanned demand and order changes. Therefore, if buyers have any changes in their demand, they should give feedbacks as soon as possible to ensure the accuracy of delivery time.

Comments:

Western Digital recently announced to raise prices of all its hard disks, which undoubtedly stirred in the memory market. Although the company did not directly disclose the specific price increase percentage, the increase percentage in the price of HDDs is expected to be at least 5%, even up to 10%, according to insiders. Although the amount of the price increase is not small, it is believed that it is still reasonable considering the current supply and demand situation in the market.

More notably, the price increase of SSDs is expected to be much higher than that of HDDs. According to the report of TrendForce, the global market price of NAND flash memories has increased significantly in Q1, and will continue to increase in Q2. This shows that the price increase of SSDs is not only the act of Western Digital, but also shows the trend of the whole industry.

The price increase of HDDs of Western Digital not only reflects the surge of memory demand in the current AI market, but also discloses the vulnerability of the global supply chain under the impact of force majeure factors such as natural disasters. With the rapid development of AI technology, there is a huge demand for capabilities of  storing and processing of big data, triggering the tension of the supply of memory devices. Moreover, natural disasters such as the earthquake in Taiwan have further aggravated the tension in the supply chain, making the price of memory prices rise.

05 Domestic Trend

Innolux to adjust its Nanjing factory production lines, with 2,400 employees to be laid off(Apr. 10)

Taiwan-based panel maker Innolux recently announced that it will adjust the production lines and products of its panel module factory located in Nanjing and optimize the manpower structure in order to strengthen the development of the group considering improving its distribution of productive sources and overall operating efficiency. This adjustment is expected to impact the jobs of about 2,400 employees.

At the end of last year, it was rumored in the market that Innolux planned to relocate its back-end module factories in Shanghai and Nanjing, and gradually transfer the equipment to Taiwan. The production for its orders will be concentrated in the Ningbo and Foshan plants. In addition, Innolux also assisted Vedanta Group to establish a complete production line in India, and considered selling its module equipment to India. In this regard, Innolux said that the companys business layout had been comprehensively and carefully evaluated and would transform itself according to market trends and new technology development plans to achieve positive benefits in its overall operation.

It is worth mentioning that, in order to cope with its losses in 2022, Innolux made a capital reduction of nearly NT$ 4.778bn in 2023, involving 478mn shares, and returned NT$ 0.5 per share in cash to shareholders. Considering the losses in 2023, the company will not rule out further measures to reduce capital.

Hubei Jiufengshan Laboratory Technology Center made technological breakthrough in photoresist with performance better than that of commercial products.(Apr. 7)

Recently, Jiufengshan Laboratory Technology Center officially announced that the center and the research team from Huazhong University of Science and Technology successfully made a technological breakthrough with the title of "Dual nonionic photoacids synergistically enhanced photosensitivity for chemical amplified resists". Through innovative chemical structure design, the research team created a new type of photoresist by using two photosensitive units. With the new photoresist, the UV photolithography results demonstrate distinct exposed patterns, low line edge roughness and extreme small standard deviation of normal distribution of space pattern width value (about 0.05), showing better performance than most commercial photoresist. At the same time, the photoresist completely meets the throughput and production efficiency requirements for mass semiconductor production in the time required for each development step, providing a strong guarantee for its application to actual production lines.

Relying on the process platform of Jiufengshan Laboratory Technology Center, this photoresist system with independent intellectual property rights was preliminarily verified on the production line, and the detection and optimization of various technical indicators were completed simultaneously. This indicates that the whole chain from technology development to transformation of technical result has been connected, laying a solid foundation for the further development of the photoresist industry.

Xiyuan Electronic Technology (Wuxi) started its high-end semiconductor packaging and testing project at Donggang Town, with total investment of RMB 1.2bn(Apr. 10)

On April 10th, Xiyuan Electronic Technology (Wuxi) Co., Ltd. started its high-end semiconductor packaging and testing project at Donggang Town.

It is reported that the high-end semiconductor packaging and testing project of Xiyuan Electronic Technology (Wuxi) Co., Ltd., with a total investment of RMB 1.2bn, covers a land area of 27.58 mu (about 18,386.6667 sq meters), a building area of 36,000 sq meters, composed of two newly buildings. The company will purchase about 400 sets of advanced packaging and testing equipment for grinding, film pasting, physical cutting, laser cutting, die bonding, wafer bonding, plasma cleaning, etc., to build itself a first-class packaging and testing factory in China. The products will mainly be supplied to the first-line IC design and chip manufacturers in China. After reaching its full production capacity, the project is estimated to package and test 288 million chips, achieving annual sales of RMB 630mn and tax payment of RMB 50mn.

According to the data, Baikejing Semiconductor Technology (Suzhou) Co., Ltd., as the main investor of this project, is a manufacturer engaged in thinning, cutting, core picking and testing of semiconductor wafers. At present, Baikejing has formed a certain industrial scale at the front-end industrial chain of semiconductor packaging and testing and enjoys a high regional visibility. At the same time, it ranks among the leading companies in terms of equipment and technology in the Yangtze River Delta region.