When the US started implementing bans on certain tech products from China, most Chinese companies took a big hit. In fact, Huawei remains one of the biggest casualties from the actions taken by the US. Not only did Huawei experience a dip in profits, but it also needed to source and develop its own technology to cope.

Then, the US started imposing restrictions on the chip supply to and from China. This included allyships with Taiwan, Japan and Korea to control the chip supply trade and block China’s access to cutting-edge semiconductors. The Chip4Alliance goal however remains a pipeline dream as chip companies from these three countries are still operating in China.

The next target was TikTok, which the US government claimed was being used by China to spy on users. The episode with TikTok led to several states in the US banning the app from government services with one state insisting a full ban starting next year.US allies soon began implementing similar bans on TikTok, Huawei and other Chinese products.

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The ban on certain Chinese brands meant the country eventually imposed a ban on Micron Technology chips in its critical infrastructure projects. China’s cybersecurity watchdog said Micron had failed a national security review, telling operators of “critical information infrastructure” to stop buying its products.  This marked the first time China had imposed a ban on the American chipmaker.

Here’s where it gets interesting though. Since China made the announcement over a month ago, several tech leaders from US companies have visited China and promised to continue their relationships with the country. This included Tesla’s Elon Musk, Apple’s Tim Cook and Microsoft’s Bill Gates. All three companies have significant investments in China, especially in manufacturing.

The biggest visit to China however is the US Secretary of State Antony Binken. Binken arrived in China over the weekend and according to a report by AFP, he will meet China’s top envoy and potentially President Xi Jinping. The trip aims to improve straining ties between both countries.

US Secretary of State Antony Blinken (L) and China’s Foreign Minister Qin Gang shake hands ahead of a meeting at the Diaoyutai State Guesthouse in Beijing on June 18, 2023. (Photo by LEAH MILLIS / POOL / AFP)

Micron Technology invest in China despite ban

Now, US chipmaker Micron said it would invest more than US$600 million in a packing and testing factory in northern China, less than a month after Beijing banned its chips from critical infrastructure projects.

In a WeChat statement, the firm said it would invest more than 4.3 billion yuan (US$605 million) over the next few years in its plant in the city of Xi’an to acquire equipment and add a new factory at the facility.

“This investment project underscores Micron’s unwavering commitment to our China business and our China team members,” CEO Sanjay Mehrotra said in a statement.

Micron said it would buy chip-packaging equipment from the Xi’an-based Licheng Semiconductor, which had already been operating some equipment in the US company’s facility under a previous agreement.

“The investment is in line with Micron’s global packaging and testing concept and would give the company the flexibility to manufacture a wide portfolio of products in Xi’an,” the firm said in its WeChat statement.

Micron will also build a new facility with production lines for mobile DRAM, NAND and SSD chips, it added.

A peaceful chip war?

About 10% of Micron’s US$30.8 billion annual revenue last year came from China, according to company data. But a large portion of Micron products sold in the country were bought by foreign manufacturers, analysts noted, and it was not clear if last month’s decision by China’s cybersecurity watchdog affected sales to foreign buyers.

Washington has said it has “very serious concerns” about China’s restrictions on Micron.

China began an investigation into Micron in late March, five months after the United States unveiled sweeping curbs aimed at cutting off the country’s access to high-end chips, chipmaking equipment and software used to design semiconductors.

In May, China imposed a ban on American chip producer Micron. Now, the US is hoping to counterattack with sanctions on Chinese chip manufacturer CXMT — more evidence that sanctions are a TIT-FOR-TAT LOSERS’ GAME.https://t.co/RMk729HZGo

— Steve Hanke (@steve_hanke) June 18, 2023

Reuters reported that Micron warned of a bigger hit to revenue from a Chinese ban on the sale of its chips to key domestic industries, sending the memory chipmaker’s shares down about 2%. The company said it now expects an impact on about half of its revenue from China-headquartered firms, which equates to a low-double-digit percentage of its total revenue. It had earlier flagged a hit in the low-single to high-single digit percentage.

The United States cited national security concerns for the restrictions unveiled last year, expressing concerns that China will use US technology to develop advanced military equipment.

The White House has also urged South Korean chipmakers not to export to China to fill any gap left by a ban on US semiconductor imports. The Netherlands and Japan-US allies that are both leading manufacturers of specialized semiconductor technology — have also announced restrictions on exports, without explicitly naming China.

With additional reporting from AFP.

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Earlier this month, Applied Materials, an American maker of semiconductor fabrication equipment, unveiled plans to plow US$4 billion into a collaborative research and development (R&D) facility in Silicon Valley over the next seven years. The 180,000-square-foot facility, known as the Equipment and Process Innovation and Commercialization (EPIC) Center, is expected to create 2,000 engineering jobs.

The EPIC Center will mainly provide chipmakers and university researchers with a space to develop prototype designs for next-generation process tech and pre-release equipment. When the facility come online in 2026, it will be an opportunity to work on, play with, and validate designs at an earlier stage. 

For Applied Materials it presents a chance to develop tools and equipment better suited to emerging semiconductor tech, so much so that the semiconductor equipment maker expects the facility to speed the development of new semiconductor tech by as much as 30% compared to today.

“The industry needs a new model that breaks down traditional silos, builds denser networks of collaboration, and delivers tighter feedback loops that can increase the speed and lower the cost of innovation,” the company said in a statement on May 22. Applied Materials have so far claimed support from more than a dozen chipmakers, foundry operators, and universities, including Intel, AMD, TSMC, MIT, and UC Berkeley, to name a few.

US Vice President Kamala Harris (2R), holding a silicone wafer, speaks with Applied Materials CEO Gary E. Dickerson (R) and employees, Yann Lapnet (L) and Satomi Angelika Murayama (2L) while touring a site where the company plans to build a $4 billion research facility on May 22, 2023, in Sunnyvale, California. (Photo by Jim WILSON / POOL / AFP)

“For the first time, chipmakers can have their own dedicated space within an equipment supplier facility, extending their in-house pilot lines and providing early access to next-generation technologies and tools – months or even years before equivalent capabilities can be installed at their facilities,” the statement reads.

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Applied Materials has long advocated ongoing R&D in the semiconductor industry. Since the pandemic, the company has focused on bolstering its R&D capabilities to accelerate the commercialization of new technologies and services that improve chip power, performance, area, cost, and time-to-market (PPACt).

In light of all the recent happenings in the company and the industry, Tech Wire Asia caught up with Brian Tan, Vice President of Applied Global Services and Regional President for Applied Materials Southeast Asia, during SEMICON SEA 2023.

TWA: How critical is R&D in the semiconductor industry?

Tan: Semiconductors have become crucial to the global economy, and because of that, the requirement for R&D and innovations has never been more vital. If you look at where Applied Materials is, especially with our materials engineering leadership position, we drive innovation specifically around these few areas that we call PPACt.

If you break down this entire requirement for innovation, these are a few foundational blocks. For Applied Materials, the critical element of innovation is time. We have a leadership position and hold ourselves accountable for supporting our customers to untangle the most challenging technical problems. 

So we are solving the industry’s toughest challenges.

TWA: How will the EPIC Center in California fit into Applied Materials’ R&D plans? 

Brian Tan, Vice President, Applied Global Services and Regional President, at Applied Materials Southeast Asia.

Tan: You may have heard that we spent US$2.8 billion last year on R&D – every given year, no less than 10% [of turnover]. As for this, EPIC Center is Applied Materials putting money where its mouth is, investing US$4 billion on just the infrastructure and the capitalization of the center in the next seven years. So that’s a significant commitment. Applied Materials has to maintain our materials engineering leadership. 

And why I use the words innovation and collaboration because, on the innovation front, this center is all about accelerating the speed of innovation. We do that by collaborating and bringing our customers, our industry partners, the best academics, the brightest minds, and the most promising talent together. We are one of, if not the only, companies that can bring these companies into collaboration. 

This physical space is a concept, a platform, to accelerate innovation, and we do that by bringing people in to collaborate in totally different ways than before. So that’s a fundamental shift.

TWA: Let’s briefly get into the semiconductor shortage and supply constraints. Where does the industry stands today?

Tan: I believe there is absolutely no doubt where semiconductors are headed. If you look at what happened in the last super cycle, the three brightest years for the semiconductor industry happened in the darkest years of COVID-19, even amid lockdowns and global disruptions.

Until the end of last year, we saw a minor correction, especially in the memory market. So that has some impact. The pandemic has also exposed the vulnerability of the supply chain situation because this industry went through years of globalization. 

So a lot has changed, and we have understood that the supply chain system is entangled and intertwined. Supply chain efficiency was at a world-class just-in-time method, whereas now everyone is talking of a just-in-case approach. That is why we’re still sorting that out. So in that sense, the last three years have brought some corrections. 

TWA: Has chip nationalism impacted Applied Materials in any way?

Tan: Semiconductors are going to be everywhere. Applied Materials supports all customers globally, and we are very clear on where we believe the industry will go. We are doubling down on critical and principal locations that have worked very well for us, especially in the US and Singapore. 

That’s actually from a client material standpoint, where we will continue to invest. So that strategy for us has been evident.

TWA: What are some of the latest SEA R&D plans?

Tan: The Singapore 2030 plan covers the entire aspiration of what Applied Materials will be doing in the next seven years towards the end of this decade. It is focused on this expansion of our manufacturing capacity. I’ve told you why semiconductors are so important and how we need the physical ability to manufacture them, and it has to be in the correct location. So we decided Singapore is the right place. 

Therefore, we are deepening our R&D here, so Singapore is one critical hub. We also want to deepen partnerships with ecosystems, including academia and suppliers. The last one is so foundational, which is our commitment to upskill, reskill, and bring in top talent. Those four pillars are critical as part of the Singapore 2030 plan. 

Singapore is Applied Materials’ sole Center of Excellence for advanced packaging. So every work we do for advanced packaging is done out of Singapore. And I think you know very well that heterogeneous integration and advanced packaging is one of the most significant technologies since there are talks on the shrinking of devices, and that is why I firmly believe it will be the next major thing in the industry.

The post Here’s how Applied Materials manages supply chain and semiconductor research appeared first on Tech Wire Asia.

The Taiwan Semiconductor Manufacturing Company operates the world’s largest silicon wafer factories and produces high-performance chips used in everything from smartphones and cars to missiles. It is also Apple’s primary chip supplier.

Its 3nm-process chips are expected to have more processing capability while using less power, boosting battery performance.

“Our 3nm technology will be used massively in future state-of-the-art technological products, including supercomputers, cloud servers, high-speed internet, and many many mobile devices,” chairman Mark Liu said at a ceremony announcing mass production at a plant in the southwestern city of Tainan.

He added that the company plans to build even smaller 2nm plants in the Taiwanese cities of Hsinchu and Taichung.

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TSMC’s South Korean rival Samsung began mass production of its 3nm chips in June.

Taiwan plays an outsized role in the global chip industry.

TSMC alone accounts for nearly 50% of the world’s production of chips below 10nm.

The concentration of such a crucial industry in one place has begun to cause geopolitical jitters, especially as China increasingly threatens Taiwan, a self-ruled democracy that the Chinese Communist Party claims and has vowed to one day seize.

The global chip shortage during the coronavirus pandemic deepened those concerns.

TSMC has been lobbied by western powers to build more foundries overseas which it has agreed to do.

The company is constructing a huge $40 billion plant in Arizona which will eventually produce its own 4nm and 3nm chips, part of US efforts to ensure a stable supply of semiconductors on its soil.

President Joe Biden attended a ceremony earlier this month to announce a mammoth expansion of the Arizona plant, which is one of the largest foreign investments in the United States.

TSMC has also agreed to build foundries in Japan and is exploring Germany as a possible location.

At the same time, Taiwan’s tech companies and its government are keen to ensure the majority of state-of-the-art production remains at home, in part because the industry affords the island some protection.

Any invasion or blockade of Taiwan by China would have catastrophic consequences for the global economy because so many crucial semiconductors are made there — a buffer that analysts call Taiwan’s “Silicon Shield”.

President Tsai Ing-wen has played down concerns that Taiwan risks losing that shield — and jobs — by building foundries overseas and instead has portrayed the investments as a sign of the island’s technological prowess.

“TSMC founder Morris Chang has repeatedly said Taiwan remains the best place for TSMC to invest in as Taiwan has a comprehensive ecosystem and a superior workforce,” Tsai said earlier this week.

“He meant that we do not have to worry about Taiwan’s chip industry.”

© Agence France-Presse

The post TSMC begins mass production of 3nm chips appeared first on Tech Wire Asia.

When Samsung Electronics Co announced that it kickstarted the 3-nanometer (nm) chip production in June this year, the company turned out to be the first chip player in the world to do so. Even Taiwan Semiconductor Manufacturing Co (TSMC) did not begin volume production of 3nm silicon until last month. Now to further intensify the chip race between both the two rivals, Samsung this week unveiled its targets when it comes to making the most advanced chips.

It was the first time the South Korean giant had detailed how its production road map would compare with that of TSMC. Basically, the plan entails Samsung’s contract chipmaking unit — Foundry — to start manufacturing chips on the 2-nm production process in 2025, followed by the 1.4-nanometer production process in 2027. The roadmap basically advances Samsung from its current 3-nm chip production that started around four months ago.

To put things into context, global chipmakers like Samsung, TSMC and Intel are battling to develop advanced chips to meet client demand. Smaller, more advanced chips are harder to make because they squeeze more transistors onto the same space. That said, the ability to mass produce them is essentially an indication of a manufacturer’s technological prowess.

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The announcement by Samsung came just as its share declined in the global foundry market. The company’s share dropped to 13% in the second quarter from 15% in the first three months of the year, while TSMC expanded its share to 56% from 54% during the same period, according to Counterpoint Research. Frankly, TSMC and Samsung are the only two companies now with the finances and technological prowess to manufacture the world’s most sophisticated chips.

“The technology development goal [of bringing circuit widths] down to 1.4 nm and foundry platforms specialized for each application, together with stable supply through consistent investment, are all part of Samsung’s strategies to secure customers’ trust and support their success,” Samsung Foundry’’s head Choi Si-young said. The timeline by Samsung is actually similar to TSMC, which had said it would start mass production of 3-nm chips later this year and subsequently introduce other variations. 

By 2025, TSMC will also move into the 2-nm process but beyond that time, no plans have been ironed out yet. Overall, Samsung is aggressively investing with hopes of shrinking the gap with TSMC. The South Korean company is even building a US$17 billion chips making plant for its foundry business in Taylor, Texas, and has floated the prospect of investing nearly US$200 billion in 11 new chipmaking plants in Texas over the next two decades. 

TSMC on the other hand last year pledged to spend US$100 billion by 2024 on factory expansions. The chip race between Samsung and Intel too have been locked in a fierce battle  for many years — although the former still ranks as the world’s largest chip maker by revenue. A part of its aggressive five-year plan, Samsung also plans to further lure US chip buyers in the coming years with its advanced technology.

But it is fair to note that Samsung has actually had difficulties in meeting clients’ expectations for foundry yields in recent years. Analysts believe the company had pushed advanced technology too quickly to compete with TSMC, but had suffered from having less experience with the long-term client cooperation needed in contract manufacturing. Samsung even lost out to TSMC on an Nvidia Corp order to produce the RTX 40 series of graphics cards, which moved to a 4-nanometre process.

But it came out strong, and now aims to triple its capacity of leading-edge manufacturing by 2027. Samsung Foundry is also looking to triple its revenue by that year from the 2021 level, senior vice-president Moonsoo Kang said at a briefing on Monday. In order to get there, the business will need to make several technological leaps and further inroads in the US market for outsourced chips, including manufacturing in the US.

The post Samsung unveils advanced-chipmaking roadmap, intensifying rivalry with TSMC appeared first on Tech Wire Asia.

Just days after South Korean conglomerate the Samsung Group pledged to spend 450 trillion won (US$356 billion) — 30% more than its previous five-year allocation — to shore up businesses in semiconductors, biopharmaceutical and other next-generation technologies, its rival SK Group also announced a massive expenditure, focusing on similar key growth areas.

The group, also South Korea’s second-largest conglomerate after Samsung, has allocated 247 trillion won (US$195 billion) for the next five years, targeting key growth sectors such as semiconductors, batteries and biotechnology. SK Group, which owns the world’s second-largest memory chipmaker SK Hynix Inc., said 142.2 trillion won, or nearly 60% of the total spending, through 2026, is earmarked for establishing a local semiconductor ecosystem.

The ecosystem includes the launch of a chip cluster, expansion of chip fabrication facilities and increased purchase of chipmaking equipment. In a statement, the conglomerate highlighted that the chip cluster would be in Yongin, south of Seoul, to accommodate over 50 local manufacturers and suppliers of semiconductor materials, components and equipment.

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“At the center of the Fourth Industrial Revolution such as digital transformation and artificial intelligence lie semiconductors. Chips are our future.” From the rest of the allocation, 67.4 trillion won will go into its green energy business, including electric vehicle (EV) batteries, while 24.9 trillion won will be spent on advancing digital technologies such as 5G networks. 

SK Group also aims to reduce carbon emissions by 200 million tons, or about 1% of the worldwide initiative to cut emissions by 2.1 billion tons as of 2030. The target aligns with the initiative — renewable energy 100 (RE100) initiative — SK Group is a part of since November 2020.

SK Group said the remaining 12.7 trillion won will be used for expanding its pharmaceutical business. Basically, SK Group aims to enhance its presence in the business of drug-making for other companies under contract development and manufacturing organization (CDMO) programs.

Of the total investment, domestic investment alone amounts to 179 trillion won, or 73%. “This investment will contribute to revitalizing the national economy,” SK Group said, adding that the company also decided to hire 50,000 people in South Korea over the next five years. 

Samsung also had indicated that the bulk of their expenditure would go to enhancing the chipmaker’s system memory and foundry capacity. To put it simply, the tech giant will spend 360 trillion won at home to create 80,000 jobs, a sharp increase from last year’s pledge of 240 trillion won for the following three years of which 180 was devoted to shore up 40,000 jobs in South Korea.

The post South Korean companies allocating billions to boost semiconductor, biotech appeared first on Tech Wire Asia.

As Broadcom plans to acquire VMware, this could be one of the biggest tech deals for the chipmaking company. The chipmaking giant already has made several large acquisitions in its history. But, let’s not forget that Broadcom did also try to acquire Qualcomm in 2018 for US$ 117 billion only for former US President Donald Trump to block the attempt, citing national security concerns.

While there are still regulatory and other aspects of the deal that needs to be sorted out, reports and talk in the industry show it’s just a question of when the deal will eventually be sealed.

For Broadcom, it is another big opportunity for them to make a mark in the industry. However, there are also some concerns about how the acquisition will impact the employees of VMware. Broadcom’s last major acquisition was CA Technologies for US$18.9 billion in 2018. It then laid off about 300 CA Technologies upon the completion of the buyout.

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In 2019, Broadcom also acquired enterprise security business, Symantec Corporation for US$10.7 billion in cash. The addition of Symantec’s enterprise security portfolio was expected to significantly expand Broadcom’s infrastructure software footprint. However, Symantec was already laying off employees even before the acquisition was completed.

Last year, Broadcom was also in talks to acquire big data analytics company SAS for around US$20 billion. The deal didn’t go through after a change of mind from SAS co-founders.

For employees of VMware, similar thoughts would also be going through their minds. This is also probably one of the reasons why Pat Gelsinger, former VMware CEO said he has mixed feelings about it in an interview with Bloomberg TV.

“If it helps VMware be a more compelling, innovative growth story, then it’s good – if it does not, then it’s not good,” he said when asked about the acquisition.

Looking at VMware, the company has had an interesting history since its inception. After seemingly settling down with Dell Technologies, VMware eventually completed the spin-off from the tech giant. The spin-off meant VMware had increased freedom to execute its multi-cloud strategy, have a simplified capital structure and governance model, as well as additional operational and financial flexibility.

This was just around six months ago. And even with the spin-off, Michael Dell, CEO of Dell Technologies still has a US$16.2 billion stake in VMware. Bloomberg reports that should Broadcom’s potential takeover materialize, the final say could go down to him.

VMware has also made several major acquisitions in recent years to boost its place in the industry. The company has huge plans for the multi-cloud, 5G as well as a big focus on Kubernetes through the acquisition of Pivotal Software and cybersecurity through various other acquisitions.

A new dawn for both VMware and Broadcom?

(Source – Shutterstock)

With that said, what does the take-over mean for VMware in Asia? Should employees be worried about layoffs? When Elon Musk announced his intent to purchase Twitter, employees in the Singapore office were already concerned about the outcome.

However, the reality is, VMware is different. The company has already been voted one of the best employers numerous times over the last few years and has one of the best employee benefits in the industry.

For staff in Singapore and the Asia Pacific region as a whole, the tech industry remains one of the most successful industries to work in since the pandemic started. With remote and hybrid working practices still ongoing for them, it will also be interesting to see how the acquisition would affect this. Broadcom has already made most of its employees return to work in the office its headquarters and regional offices around the world.

Apart from that, the acquisition could see Broadcom becoming a major tech player in Asia. Playing a major role in the industry for WiFi 6 chips, the acquisition could see Broadcom and VMware integrating their technologies to become a tech superpower in the chip and cloud industry in the world.

Chips and cloud technologies are shaping the world today and having a strong presence in both of them can not only influence the supply chain but also navigate the future of the industry.

For now, all eyes will be on Broadcom CEO Hock E.Tan. The Malaysian-born CEO has already hinted that a company is financially stable to make major acquisitions, and it seems likely that the deal will go through.

For VMware and Broadcom employees in Asia and the rest of the world, this could be the beginning of a new chapter for them.

The post As Broadcom acquires VMware, what will the impact be in Asia? appeared first on Tech Wire Asia.

Chipmakers around the world, since last year, have been scrambling to expand their manufacturing capacity with some players even planning on global expansion. The world’s fourth largest contract chipmaker, Taiwan’s United Microelectronics Corp., is also planning on widening its operations in the region, with another chip factory next to its existing 300mm fab in Singapore.

In a press statement, UMC, its board of directors, has approved a plan to build a new advanced chip factory with a planned investment of US$5 billion. The first phase of the greenfield fab will have a monthly capacity of 30,000 wafers with production expected to commence in late 2024.

“The new fab (Fab12i P3) will be one of the most advanced semiconductor foundries in Singapore, providing UMC’s 22/28nm processes.,” it said. To recall, UMC has operated as a pure-play foundry supplier in Singapore for more than 20 years. The location is also the company’s designated R&D center for advanced specialty technologies. 

To account for the Fab12i expansion, the company’s 2022 capex budget will be revised upward to US$3.6 billion. UMC also said that the new chip factory is backed by customers who have signed multi-year supply agreements in order to secure capacity from 2024 and beyond. That directly means there is a robust demand outlook for UMC’s 22/28nm technologies for years to come, driven by 5G, IoT, and automotive mega-trends. 

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“Specialty technologies to be manufactured in the new facility, such as embedded high voltage, embedded non-volatile memory, RF-SOI, and mixed signal CMOS, are critical for a broad range of applications, including smartphones, smart home devices, and emerging electric vehicle applications,” UMC said.

Additionally, the company expects the new fab will play an important role in satisfying growing demand in these markets and help alleviate the structural shortage of foundry capacity, especially on 22/28nm processes.

UMC’s chairman Stan Hung said the company’s “Singapore fab is UMC’s flagship innovation hub and numerous new R&D projects in collaboration with customers will enter production when the new facility comes online. The semiconductor undersupply has crystallized the need for greater visibility and mutual risk mitigation within the industry.”

Hung also noted that the latest investment is the result of the shared vision and close collaborations with their key customers. “We are committed to doing our part to restore balance in the industry value chain and to the long-term success of our customers.” UMC clients include Samsung, MediaTek and Qualcomm.

Besides UMC, world’s top chipmaker, Taiwan Semiconductor Manufacturing Co. is also expanding its capacity of the 28nm chip production technology in Nanjing, China. It is also building its first-ever chip plant in Japan for 22 To 28nm technology. Within its home market, TSMC is also building an additional 28nm plant in the southern city of Kaohsiung.

Elsewhere, top Chinese chipmaker Semiconductor Manufacturing International Co. is also constructing plants in Shenzhen, Shanghai and Beijing that can support 28nm grade technology. For context, 28nm is seen as the most cost-effective production technology given its wide range of applications, from microcontrollers, WiFi and Bluetooth, to consumer electronics processors and driver ICs.

The post Singapore will soon home another chip factory by Taiwan’s UMC appeared first on Tech Wire Asia.

As semiconductor production continues to be boosted by the building of new factories and processing plants around the world, the reality is, the problem is still expected to continue for some time.

In fact, semiconductor production has been disrupted over the last two years for various reasons. The COVID-19 pandemic is probably the biggest disruptor to global semiconductor production. But apart from the pandemic, natural disasters, as well as geopolitical problems between the US and China, have also contributed to the disruption.

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Interestingly, most chip manufacturers are feeling optimistic about meeting the growing demand for chips and seeing the problem solved soon. However, semiconductor production operations are still not up to their full potential with teething issues in the supply chain still needing to be sorted.

One company that is not taking the semiconductor production likely is Bosch. Having already announced spending of more than 400 million Euros last year for expanding its semiconductor operations in Dresden and Reutlingen Germany as well as in Penang Malaysia, the chip manufacturer is now investing another quarter-billion euro in creating new production space and the necessary clean-room facilities in its Reutlingen plant between now and 2025.

The investment is expected to give Bosch the firepower to meet the continuously growing demand for chips used in mobility and IoT applications.

“This new investment will not only strengthen our competitive position but will also benefit our customers and help combat the crisis in the semiconductor supply chain,” commented Dr.Stefan Hartung, chairman of the board management of Robert Bosch GmbH.

The construction of a new extension in Reutlingen will create an additional 3,600 square meters of ultramodern clean-room space. As of 2025, this additional capacity will produce semiconductors based on technology already in place at the Reutlingen plant. Bosch is also extending an existing power supply facility and will construct an additional building for media supply systems serving both the new and existing production areas. The new production area is scheduled to go into operation in 2025.

The Reutlingen wafer fabs use 150- and 200-millimeter technology, while the Dresden plant makes chips on 300-millimeter wafers. Both employ cutting-edge manufacturing methods based on data-driven process control.

“AI methods combined with connectivity have helped us achieve continuous, data-driven improvement in manufacturing and thereby produce better and better chips,” explained Markus Heyn, member of the board of management of Robert Bosch GmbH and chairman of the Mobility Solutions business sector.

This includes the development of software to enable the automated classification of defects. Bosch is also using AI to enhance materials flows. With its high level of automation, this state-of-the-art production environment in Reutlingen will safeguard the plant’s future and the jobs of the people working there.

Bosch-manufactured semiconductor components include application-specific integrated circuits (ASICs), microelectromechanical systems (MEMS sensors), and power semiconductors. The further expansion of the Reutlingen site will primarily serve the growing demand for MEMS in the automotive and consumer sectors and silicon-carbide power semiconductors.

Measures to achieve this include the development and manufacture of chips made of silicon carbide, which Bosch has been producing since December 2021. Chips made of this innovative material are destined to play an increasingly important role in electromobility. Bosch is currently the only automotive supplier worldwide manufacturing power semiconductors made of silicon carbide.

The post Bosch expands semiconductor production appeared first on Tech Wire Asia.

The resurgence of the COVID-19 pandemic in China followed by heavy floods in Malaysia has already led to some delays in chip output towards the end of 2021. Factory closures for Lunar New Year celebrations in the last few weeks have also led to some companies having to rely on alternative routes for their chip supply chain.

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Now, operations at two Japanese factories producing flash memory chips have been disrupted by the contamination of industrial materials. The latest disruption comes as the tech industry grapples with a global semiconductor shortage that has hampered the manufacturing of numerous products from cars to gaming consoles.

Chipmaker Kioxia suspected “contamination of materials used in the manufacturing processes” at its plants leading to operations being partially suspended, without giving further details. The company, a spin-off of Japanese conglomerate Toshiba, said it was working to restore full output at the factories in central and northern Japan as soon as possible.

Kioxia’s US-based partner Western Digital also confirmed the disruption and estimated it would cause “a reduction of flash availability of at least 6.5 exabytes” at the plants, which are run by the two companies as a joint venture. A unit of digital data, there are one billion gigabytes in an exabyte.

According to Hideki Yasuda, an analyst at Ace Research Institute, the disruption was more bad news for the industry.

“Flash memory prices will rise for sure, further adding fuel to the recent component price hike trend stemming from supply shortages,” he told Bloomberg News.

A Kioxia spokesperson said that only part of 3D Nand production has been hurt. The company will continue to ship from inventory in the short term but shipments will be curtailed in the “near term.”

A pandemic-fuelled surge in demand for home electronics that use semiconductors has throttled chip supplies — a crisis deepened by a cold snap in the United States, a drought in Taiwan, and fire at Japanese manufacturer Renesas last year.

While it is unsure how long the disruption will last, many organizations have already taken their own steps to deal with the chip shortage problem. Several firms have recently announced plans for new semiconductor plants as the chip squeeze continues.

In November 2021, Samsung said it will build a microchip factory in Texas, a $17 billion investment. Taiwan’s TSMC has said it will build a plant in Japan in partnership with Sony, while China’s biggest chipmaker said in September that it would build a new factory in Shanghai.

With additional reporting from © Agence France-Presse

The post Chip output in Japan disrupted by industrial contamination appeared first on Tech Wire Asia.

The group said it plans to spin off its device segment, including its semiconductor business, in a bid to speed up decision-making and boost stock performance.

As the original spin-off faced stiff opposition from investors, shareholders will need to approve the proposal in a vote expected in March this year. The firm also said it will unload its stake in air-conditioning business Toshiba Carrier and seek to sell its elevator and lighting units.

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“The refined strategic reorganization plan creates two distinctive companies that are well-positioned to take advantage of their unique strengths and business cycles. We will be able to deliver these benefits while providing a clearer path to completion, reducing the associated costs, maintaining tax-free status and keeping to our stated timeframe of completing the spin-off in the second half of FY2023,” said president and CEO Satoshi Tsunakawa.

He said the sprawling business “struggled with the conglomerate discount and slowness in decision-making” in the past, and streamlining operations would allow investors to choose the portion of the business that interested them.

Last week, Toshiba had announced plans to set up a new wafer production facility to deal with the semiconductor shortage the industry is facing. The new fab was expected to boost its production upon completion.

The construction will take place in two phases, allowing the pace of investment to be optimized against market trends, with the production start of Phase 1 scheduled for within fiscal 2024. When Phase 1 reaches full capacity, Toshiba’s power semiconductor production capacity will be 2.5 times that of fiscal 2021.

Toshiba initially unveiled a plan to split into three last November, in what analysts called a test case for other Japanese giants. But it said that “since this is the first large-scale spin-off transaction in Japan… it turned out there were obstacles which were not initially expected”.

Among those were higher-than-expected costs, and an extensive process to list the two new entities. A two-way split instead “can significantly reduce separation costs, secure financial soundness for each company, and significantly reduce spin-off uncertainty”, the company said.

The spin-off is expected to cost 20 billion yen (US$ 173 million) over two years, with running costs also increasing by 13 billion yen a year. But Tsunakawa said that would be offset by plans to reduce operating costs by 30 billion yen annually.

Toshiba is not the only company announcing splits. General Electric and Johnson & Johnson have announced spin-offs in recent months, a move analysts say is in large part forced on them by financial markets.

Spin-offs can be a way for large corporations to create more value and rationalize operations, but they can also limit coordination between sectors, experts say.

Toshiba dates back to 1875 and was once a symbol of Japan’s advanced technological and economic power, but it has been mired in turmoil for several years.

Last year, shareholders voted to oust the board’s chairman after a series of scandals and losses, in a rare victory for activist investors in corporate Japan. As part of the overhaul, the company on Monday declared Toshiba Tec and its air-conditioning, elevator, and lighting units “non-core businesses”.

It has already agreed to the sale of Toshiba Carrier to the US-based Carrier Corporation in a deal reportedly worth some 100 billion yen.

The conglomerate currently owns 60% of the air-con company’s shares and will retain only five percent when the sale is completed later this year. It said it hoped to reach deals to offload the elevator and lighting units within the next two months.

With additional reporting from © Agence France-Presse

The post Toshiba now plans to split into two companies appeared first on Tech Wire Asia.