Canon will challenge ASML - the company will establish production of machines for chip production with advanced lithography, but without EUV

Japanese Canon is developing a new generation of lithographic equipment for semiconductor production, able to compete with the products of Dutch ASML, which is almost a monopolist in the market of such solutions.
The new plant in Japan will also be a response to competitors' investments in the related area in the United States, South Korea and Taiwan.Image source: CaponThe investment is expected to total $345 million, including construction costs and installation of production equipment.
The plant will start production in the spring of 2025.
As a result, the company will double its production capacity in this niche.
Not only does the company intend to expand production, but it is also betting on new technology that will make it possible to produce next-generation semiconductors at low prices.
Today it makes lithographic equipment in two factories in Japan which is used to produce chips for car control systems, for example.The new plant will be built on a 70,000 m2 plot of land on the site of an existing facility.
This will be Canon's first new lithographic production facility built in 21 years, with construction starting in 2023.
In 2022, lithographic equipment sales are expected to grow 29 percent year-over-year to 180 machines - a fourfold increase from ten years ago.
The new plant will help meet growing demand.According to World Semiconductor Trade Statistics, last year the global semiconductor market exceeded $500 billion for the first time in history.The industry expects it to exceed $1 trillion in 2030.Today, Canon controls 30% of the global lithographic equipment market by volume, second only to ASML, which accounts for 60%.
Intel and Taiwan Semiconductor Manufacturing Co.
(TSMC) announced plans to build their own new plants in the U.S.
and other countries.
The company has also developed next-generation technology called nanoimprint lithography.
It makes it possible to produce cutting-edge microchips at a lower cost than existing lithographic equipment.
The process is simplified thanks to a technique that allows you to literally \"stamp\" the patterns of integrated circuits, which can significantly reduce production costs - the development of technology involved Japanese Kioxia and Dai Nippon Printing.Today, the most indispensable technology using EUV lithography to form circuits at the nanometer level.
The only source of such technology today is the Dutch ASML.
Nevertheless, such equipment is expensive, costing about $138 million per machine and consuming a lot of energy.
If nanoprinting lithography reaches the stage of practical commercial use, Canon expects to reduce the cost of lithography by up to 40% and energy consumption by up to 90% compared to EUV.
This will shake the dominance of ASML in the market.

AMD admits it's on its way to completely eliminating wafer shortages

AMD in the midst of a pandemic already had to invest in its partners' capacity to produce the wafers used in making microprocessor components.
This week, senior vice president Forrest Norrod explained that AMD is done with the shortage of wafers in the consumer segment, and the work done to optimize the TSMC process for the needs of the company is also very pleased.Image source: AMDSensitive statements Forrest Norrod made at the Goldman Sachs conference, which ended this week.
AMD's component shortages, he admitted, have in recent months been determined not by the ability of TSMC or GlobalFoundries to supply its customer with processor chips, but by the limited supply of the substrates that are needed to make those processors.
By the end of this year, according to Norrod, the shortage of substrates will be over in the consumer sector, and next year the problem will be eliminated in the server segment, where it is more acute.
Forrest Norrod also spoke about the relations with the contractors in the context of the schedule of transition to new lithographic standards.
Each new process step, he said, is carefully optimized by TSMC for AMD's needs.
Moreover, the latter company puts forward different requirements to the technological process than, say, the developers of mobile processors for smartphones.
In the case of 7nm technology, AMD was at the forefront of the market.
As the senior vice president of AMD admits, during the transition to 5-nm technology, the process was a bit delayed, but it was due to market, not technical conditions.
If we talk about the server segment, AMD expects to update the process every 18 or 21 months.The first results of the migration to 5-nm technology in AMD are very pleased.
It should ensure the absolute leadership of the company both in terms of transistor performance and energy efficiency.
The process itself does not determine the pace of progress of AMD products, as Norrod explained, the company proceeds from the market needs at a particular time.AMD senior vice president for investor relations Ruth Cotter (Ruth Cotter) added that the transition to each new stage of lithography is more expensive, so in determining the schedule of migration should also consider the payback factor, combined with the ability of new products to meet customer needs.
AMD's heterogeneous chip layout helps tremendously in this regard.
The process technology is only one factor driving AMD's product development, and at the core is the architecture, which is developed based on customer needs.

Samsung's own 3nm processors won't make their way into Samsung smartphones until 2024

According to some reports, in the generation of Galaxy S23 smartphones that will debut in early 2023, Samsung Electronics will completely abandon the use of internally developed Exynos processors in favor of Qualcomm 4nm components, which will be produced by TSMC.
Only a year later, 3nm Samsung processors will have a chance to fit in smartphones of this brand.Image source: Samsung ElectricSuch as mentioned earlier, the \"first wave\" of 3nm chips produced by Samsung Electronics will be intended for Chinese developers of specialized gas pedals used in the mining of cryptocurrencies.
It was their production in small quantities was established at the pilot line in the Korean Hwasong by the end of last quarter.
For its own needs, as explained by Business Korea, Samsung Electronics will use a second-generation 3-nm process, which will be mastered only next year.
The company will begin producing its own mobile processors using this processor by early 2024, at which point they will be able to fit into Samsung smartphones.
It is possible that production of Samsung's 3-nm processors will be set up at facilities in Pyeongtaek because the production capacity at Hwaseong is limited in terms of scaling capacity.
Rival TSMC will set up mass production of 3-nm chips only by the end of this year, but it is not certain that in its case the start will be as protracted, so it is premature to talk about a clear advantage of Samsung Electronics in terms of timing.

The decline in demand for chips in the second half of the year will hit mature processors the hardest

There are almost no market players left who can dispute the fact that demand for components for PCs and low-cost smartphones is declining.
TrendForce experts expect this trend to be strongest in the mature lithography sector in the second half of the year, but even those using advanced manufacturing processes will be affected by the demand correction.Image source: TSMSAnalytics TrendForce operates equipment utilization rates - an indicator that shows the actual utilization of production lines relative to their design capacity.
During the periods of peak demand for some types of components this value exceeded 100%, but now the market is going to normalize and even to work in the loading mode, which can not be considered optimal from the economic point of view.
In the 200mm wafer and 110nm to 350nm process sectors at least, the second half of the year will see equipment utilization dip to 90-95%, with power electronics, image sensors and display drivers all affected.
90-99% utilization will be typical of product lines producing a broader range of components in the 28nm to 90nm process, including those using 300mm silicon wafers.
The general rule is as follows: the more products are tied to consumer electronics demand, the greater the risk of lower utilization rates in the second half of the year.Source image: TrendForce Chipmakers using 4nm to 19nm lithographic standards will fare relatively well, as their utilization rates will be in the optimal range of 95% to 100%.
The longer production cycle, which smoothes out short-term fluctuations in demand, will also partly contribute to this.
Migration to more advanced lithography will also help keep equipment utilization at a high level, if demand for 7nm products, for example, declines somewhat in the second half of the year, then 5nm and 4nm products will enjoy higher demand at least due to their novelty for consumers.It is important for every manufacturer to maintain optimal equipment utilization, as it helps reduce the unit cost of the products produced.
Fixed costs, which are in any production, it is possible to extend to the maximum number of products.
When the equipment is not utilized fully, the unit cost increases.

NVIDIA has booked TSMC's 3nm capacity by the end of 2024

DigiTimes' Chinese language version of the story, which is not only available to subscription holders, reveals much more details about the specifics of TSMC's cooperation with its customers in the coming years.
It becomes known, for example, that both NVIDIA and Intel are interested in using not only the TSMC's 3nm process, but also the more advanced 2nm process.Advertisement Image source: TSMCNVIDIA will return to using only TSMC services for Hopper and Ada Lovelace graphics solutions, with the latter to be produced not only on 5nm technology, but also on 4nm.
The latter will also be used in Hopper's computing gas pedals, which will not be used in the consumer sector.
According to Taiwanese sources, NVIDIA has already reserved for its needs part of TSMC's production capacity for the production of 3-nm products until the end of 2024.
Intel's interest in using 2-nm technology TSMC looks interesting, especially if you consider that the first of the companies intends to master the 18A technology by 2025, thereby restoring its nominal technological leadership.
However, the processor giant may cooperate with TSMC simply out of a desire to insure itself, or with an eye to possible timing of the implementation of the 2-nm technology by a competitor.

GlobalFoundries generated nearly $2 billion in revenue last quarter

In the case of TSMC, it is easy enough to write headlines about the company's record revenue, because it is a market leader and has a long enough \"watchdog history\" to compare publicly available financial performance.
GlobalFoundries entered the public stock market only recently, in October of last year, and therefore publishes its statistics only for the second time in a row.
According to Bloomberg, last quarter the company was able to raise revenue by 37% to $1.94 billion.advertisementSource image: GlobalFoundriesThis is above analyst expectations, but the company's own forecast for the current quarter was more optimistic than the consensus of experts - from $1.96 to $1.99 billion with expectations of $1.93 billion.
The company, like many market participants, trying to expand production capacity, attracting advance payments from customers to do so.
Not only automotive component suppliers, but also clients from defense equipment developers are interested in GlobalFoundries' production capabilities, because the company's American facilities have the necessary certifications.

TSMC's April revenues are up by half year-over-year

DigiTimes has taken it upon itself to report Taiwan's contract semiconductor manufacturers in the year-ago April revenue numbers.
The world-leading TSMC for the first month of the current quarter has earned $5.81 billion, which is 0.3% more than in March and 55% more than in April of the previous year.
In just the first four months of the year, TSMC increased revenues by 40.1% over the same period last year.Advertisement Image source: TSMSThe second quarter TSMC expects to end with revenues of $17.6 to $18.2 billion.
Rival company UMC in April revenue did not exceed $769 million, but even for it was significant progress - 2.9% more than in March.
In the first four months of the year, UMC increased revenue by 35.8% compared with the same period last year.
In the second quarter, the company hopes to increase the number of silicon wafers shipped to customers by 4-5% over the first quarter, as well as raise its average selling price by 3-4%.

TSMC will delight customers with another price hike of several percent

While Taiwanese media in the midst of the pandemic mentioned TSMC's intentions to raise prices for its services several times a quarter, Japanese publication Nikkei Asian Review claims that a major price increase took place last August and was measured at 20%.
The next noticeable jump in the cost of the company's services is scheduled for early next year, it will be measured at 5-8%.TSMCSpecifically, the price of TSMC services for the production of components using a wide range of lithographic technologies - from mature to the most modern.
If in the latter case customers will easily enough swallow such an increase, then for the recipients of TSMC products manufactured using mature technologies, the new price increase may be critical.
It should be taken into account that demand for smartphones and PCs this year is at risk of decreasing, and some of TSMC customers simply will not be able to painlessly bear the increased costs on the wallets of end buyers.