Once,Advanced manufacturing process is the king of chip manufacturing, and various manufacturers are scrambling to be the first, and the pace of Moore's Law seems to never stop. However, as technical barriers continue to rise, and the cost and risk of R&D for advanced processes increase exponentially, this path to the future has become more difficult.
At the same time,The mature process, which was once regarded as backward, has ushered in the return of the king. In the fields of smart phones, Internet of Things, automotive electronics, etc., a large number of chip needs can be met by mature processes, taking automobiles as an example, 95% of the chips used in the automotive industry are traditional chips. And the lower cost and higher cost performance have also made it a sweet spot in the market.
A vigorous mature process war is being staged around the world.
In recent years, the United States has begun to pay attention to local production, and has launched a chip bill totaling up to $52 billion, aiming to revive its own chip manufacturing industry. As the first foundry to receive the subsidy, GF will also show its strength in the field of mature processes.
India,This huge market of 1.4 billion people has also begun to focus on mature manufacturing processes. They hope that by developing the chip manufacturing industry, they will get rid of their dependence on the outside world and promote their own economic development.
China,As the world's largest chip market, it is stepping up the layout of mature processes. SEMI estimates that China may add 18 new wafer fabs in 2024, with a monthly production capacity of 8.6 million wafers, an annual increase of 13%. This will undoubtedly inject strong impetus into the development of China's chip industry.
The battle of mature processes is full of highlights. Who can win in this war without gunpowder:
Exactly,Can China seize the opportunity and overtake in corners?
Still,Can the United States return to the top with its money power?
Or, perhapsWill India become a spoiler and create a new miracle?
GF received a subsidy of 1.5 billion chips to build a factory and expand production
On February 19, local time, the United States** said that it would provide $1.5 billion in funding to Global Foundries (GF) to expand semiconductor production to strengthen the domestic ** chain in the United States. In addition to the real money**, the subsidy will be accompanied by $1.6 billion in available loans, which are expected to generate a total potential investment of $12.5 billion in both states.
GF is the first pure-play semiconductor foundry to receive a major award (more than $1.5 billion) from the CHIPS and Science Act. GF is also the only pure-play foundry headquartered in the U.S. with a global manufacturing footprint, with facilities in the U.S., Europe and Singapore. About GF's origins: GF began as a spin-off of AMD's in-house manufacturing operations in Dresden, Germany; Subsequently, GF acquired a chartered semiconductor foundry in Singapore; New foundry in Malta, New York; And in 2015, GF acquired IBM's former in-house technology development teams and chip manufacturing operations in New York and Vermont.
GF is the world's fourth-largest foundry.
And this is the highest subsidy in the US "CHIPS Act" so far. The first two smaller CHIPS Act grants went to British Aerospace Systems' U.S. subsidiary Baye Systems ($35 million) and Microchip Technology (1.).$6.2 billion).
However, although this is the highest amount of subsidies provided by the CHIPS Act so far, it is still small compared to $39 billion. The U.S. Congress passed the Chips and Science Act in 2022 to revive U.S. semiconductor production. The CHIPS Act proposes to allocate up to $39 billion in direct grant subsidies, as well as $75 billion worth of special loans and loan guarantees. The lion's share is most likely to be taken by Intel, and TSMC and Samsung Electronics are also expected to receive CHIPS Act funding for new factories in the United States.
One thing to say, what kind of fab expansion does GF mainly use this money for? Under an initial agreement with the U.S. Department of Commerce, GF will expand and build a new facility in Malta, New York, as well as expand existing local production with Burlington, Vermont.
GF intends to expand its Fab 8 facility in Malta, N.Y., to leverage the manufacturing technology already used at its German and Singapore facilities to manufacture chips for automotive applications, which essentially means introducing tail nodes to Fab 8. This upgrade is needed to meet the growing needs of the automotive industry as it transitions to electric and software-defined vehicles.
In addition, GF will build a new state-of-the-art fab on its Malta campus to meet the anticipated demand for U.S.-made essential chips from customers in a wide range of markets and applications, including automotive, aerospace, defense and artificial intelligence. The new facility, which has received some necessary permits, will leverage the plant's existing infrastructure and ecosystem to enable a fast and efficient path from construction to production. According to Tom'sHardware, the construction of the new facility, combined with the expansion of GF's existing site, is expected to triple the existing production capacity at the Malta campus over the next 10 years. Once all phases are completed, the two projects are expected to increase wafer production to 1 million wafers per year.
The expansion of GF's Burlington facility will be the first semiconductor fab in the U.S. capable of mass-producing a new generation of ga-on-silicon silicon (GaN) in large quantities. GaN semiconductors on silicon substrates can be used in electric vehicles, power grids, and smartphones.
As we all know, GF announced in 2018 that it would withdraw from the research and development of advanced processes of 10nm and below, and now has advanced processes of 12nm. After abandoning the pursuit of advanced processes, GF is focusing on the 22 28nm and 12 14nm mid-range and mature process markets. "GF's new fab will be uniquely positioned to capture the feature-rich, mature, critical chip space," GF said in a statementMature processes are expected to continue to account for more than 60% of the semiconductor market. "It is foreseeable that with the expansion of GF, the mature process war is intensifying.
The office of U.S. Senator Bernie Sanders praised the statement in a statement, noting that about 85 percent of mobile phones use chips made by GF. Regarding this subsidy, GF's customers AMD, Qualcomm, General Motors and others have applauded.
India is also targeting mature processes
In today's global electronics manufacturing landscape, India, which has been absent from the electronics field, is rising rapidly. A real case is: three years ago, India did not produce Apple mobile phones, India needed almost 100% imported mobile phones, and now, India 992% of mobile phones are locally manufactured, and they have gone from importers to exporters. India is already an important link in the global semiconductor chain.
In order to expand its role in the semiconductor value chain, India is seizing the opportunity of global geo-risk diversification and continues to make inroads into the upstream field of electronics - chip manufacturing.
Recently, according to Rajeev Chandrasekhar, India's Minister of Electronics and Information Technology, India will soon build two full-fledged semiconductor manufacturing plants, and the two projects include:1) $8 billion proposal submitted by Israel's Tower Semiconductors to enter 65nm and 40nm fabs in India; 2) Tata Group's project to build a fab in Dholera. "We are evaluating and 28nm fabs, as well as many other packaging options. Rajeev said.
India** has received four proposals for the establishment of semiconductor manufacturing plants and 13 proposals for the establishment of chip assembly, test, monitoring and packaging (ATMP) factories. India is evaluating the proposals and will cover 50% of the cost if approved under the country's $10 billion chip manufacturing plan.
Earlier, India announced a $10 billion subsidy plan for semiconductors. According to foreign media FinancialExpress, in order to attract chipmakers selected under the center's $10 billion chip subsidy program, the Indian state of Tamil Nadu** proposed in February that it would provide up to 50% of the capital subsidy - 50% of the capital expenditure assistance for semiconductor manufacturing companies set up in the state.
Rajeev Chandrasekhar said that before 2014, India** neglected electronics, and for 75 years, India has been a "classic case of missed opportunities" in the semiconductor sector. "In 2012, Intel wanted to build a factory here, but they didn't get support, so they left. When the Prime Minister launched this (semiconductor) initiative in January 2020, we knew we had to work very fast, smart, and we were essentially trying to make up for the lost opportunities of the last 75 years. "We've made significant progress in a wide range of areas, including semiconductor design, startups, research, talent, packaging, and manufacturing," Chandrasekhar said.
With the increasing foreign direct investment in India, India's e-ecosystem is taking shape at an accelerated pace:
AMD opened its largest global design center, the Technostar R&D campus, in Bangalore on November 28 last year as part of a $400 million investment in India over the next five years. The investment was previously announced at SemiCon India 2023. The 500,000-square-foot Technostar campus will house approximately 3,000 engineers with a focus on developing CPUs, GPUs, adaptive SoCs, and FPGAs for personal computers and data centers. The facility features a state-of-the-art R&D lab, a visitor presentation center, and collaboration spaces.
Micron Technology will build a 1.4 million-square-foot ATMP (assembly, test, and packaging) facility in Sanand, in two phases. The first phase of the plant is scheduled to begin production of packaged chips in December 2024. The second phase is planned to start production in the second half of the decade.
Simmtech is a major supplier of Micron, an American chipmaker specializing in substrate manufacturing, which has been granted permission to build a factory in Sanand, Gujarat, close to Micron's own manufacturing base.
India has the potential to expand its presence in semiconductor assembly, test and packaging (ATP) to up to five fabs over the next five years and attract fabs producing traditional semiconductors of 28nm or more, according to the ITIF's report "Assessing India's Readiness to Play a Greater Role in the Global Semiconductor Value Chain" released in February.
India's advantages in the field of semiconductors are mainly reflected in:1) A large and growing consumer and business market. According to a report by IESA and Counterpoint Research (shown in the chart below), semiconductor consumption in India is expected to reach $64 billion by 2026, tripling from $22 billion in 2019, with a projected compound annual growth rate (CAGR) of 16% over the same period. This amount is expected to nearly double again to $110 billion by 2030, when analysts expect India to account for about 10% of global direct semiconductor consumption. Analysts**, wireless communications ($26.5 billion), consumer goods ($26 billion) and automotive ($22 billion) will be the largest components of India's semiconductor market by 2030;
Source: ITIF
2) India has more than 125,000 employees, accounting for 20% of the global integrated circuit (IC) design workforce. India has been the birthplace of significant semiconductor design for decades, with nearly every of the world's top 25 semiconductor design companies – including Intel, Texas Instruments, Nvidia, and Qualcomm – having design and R&D centers in India.
In short, India's determination to become a chip manufacturing powerhouse has intensified, and in 2021, only 9% of India's semiconductor components were sourced locally. India plans to increase its local semiconductor sourcing to 17% by 2026. In any case, Tower Semiconductor is one of the few vendors willing to come to India to build a fab, and it is worth noting that as early as a decade ago, Tower expressed interest in establishing a manufacturing operation in India, but several attempts were unsuccessful for various reasons, including the lack of coherent policies and processes, an Indian partner suffering from financial problems and credibility issues, or both. Next, it's up to India to make this move.
Domestic OEM players, what do you think of mature processes?
As domestic wafer foundries with mature processes, SMIC and Huahong are senior players, how do they see the development of this market?
At an investor relations event on February 7, SMIC replied to the "global strengthening of localized production and overcapacity" from a big perspectiveThe capacity construction of the global foundry industry is very crowded in some markets, and there is an oversupply, which will appear. However, according to the law of competition in the industry, about 5-6 years to digest and merge the excess production capacity, the market and the first will achieve a balance.
As for the projects that SMIC has already built, these are based on prior consultation with customers and the industry chain, and there is indeed such a demand in the market. If such capacity is indeed needed for future development, it does not make much difference whether it is built in the context of a boom or the current economic downturn. SMIC's strategy is not simply to follow Moore's Law, but to take into account the long-term operation of the factory, which is usually more than 20 years. At the same time, SMIC is not a Moore's Law customer, and the products of special processes are very slow, and many products are required to produce volumes. It takes a long time to build up production capacity and ramp up to a very stable volume. Therefore, a more prudent way is to feel that there is a development direction in the future, and reach an agreement with the customer, and the annual construction amount is about the best.
In addition, there are opportunities in the market, SMIC's share of the global semiconductor foundry industry is relatively small, currently only 5% of the entire industry, and its share in the global market, including IDM for integrated circuit manufacturing, is about 1%. Considering SMIC's product and R&D diversity, even if its market share has increased, for example, from 1% to 15% or even 2% is unlikely to have a major impact on the industry as a whole.
In the absence of significant changes in the external environment, SMIC's guidance for 2024 is to increase sales revenue at a rate of no less than the average of comparable peers and a mid-single-digit year-over-year growth. In 2024, the company plans to continue with the 12-inch plant and capacity construction plans that have been announced in recent yearsCapital expenditures are expected to be broadly flat compared to the previous year.
Huahong will achieve sales revenue of 22 in 2023$86.1 billion, with a gross margin of 213%。The company believes that the full year 2024 will perform better than the full year 2023. In terms of production capacity, Huahong currently has three 8-inch wafer factories in Jinqiao and Zhangjiang, Shanghai, with a monthly production capacity of about 180,000 pieces. In addition, there is a monthly production capacity of 9 in Wuxi High-tech Industrial Development ZoneThe 450,000-piece 12-inch wafer fab ("Huahong Wuxi") is not only the world's leading 12-inch characteristic process production line, but also the world's first 12-inch power device foundry production line. Currently,The company is advancing the construction of Huahong Wuxi Phase II 12-inch chip production line ("Huahong manufacturing"). Hua Hong said at the 2023Q4 performance briefing that Hua Hong Semiconductor is a unique wafer foundry focusing on characteristic processes, and has spent more than 20 years developing 5 characteristic process platformsEven with the release of capacity at a large number of new foundries, we believe that the company will be able to maintain its leading edge in various technology areas, both domestically and internationally.
Conclusion
The battle for mature processes is not only a business competition, but also a technology game. In short, the war of mature process technology is showing a new trend in the semiconductor industry, that is, while pursuing technological innovation, more attention is paid to the balance between cost-effectiveness and market demand. Although this war is not as shining as the advanced process, its influence and importance are gradually deepening.
Looking ahead, mature process technologies will continue to play an important role in the semiconductor industry.
Scientific rambling