In recent years, Intel has embarked on a bold and transformative journey to reclaim its position as a leader in semiconductor technology. This ambition is embodied in the creation and expansion of its Foundry business division, a strategic pivot aimed at not only recapturing lost ground against rivals like Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung Electronics but also establishing Intel as a pivotal player in the global chip manufacturing landscape.

Despite facing significant financial challenges, Intel’s leadership under CEO Patrick Gelsinger has laid out a comprehensive roadmap for resurgence and growth.

Intel’s strategic pivot in the semiconductor space

The operational challenges facing Intel’s Foundry business have been stark. In 2023, the division reported operating losses of US$7 billion, a notable increase from US$5.2 billion the year prior, alongside a 31% drop in revenue. These figures, reflective of the intense competition and rapid technological evolution in the semiconductor industry, have prompted a strategic reassessment at Intel, as noted by Reuters.

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Amid these financial headwinds, Intel has undertaken significant structural and strategic shifts. One of the most critical moves has been the separation of manufacturing costs from the broader product development expenses on the income statement, creating a distinct category for Intel Foundry. This accounting realignment aims to provide a clearer picture of the foundry’s performance and the impact of production costs on Intel’s overall financial health.

At the heart of Intel’s strategy is a deep commitment to technological innovation and excellence. The company has announced ambitious plans to introduce five semiconductor process nodes over four years, a rapid pace of development aimed at leapfrogging competitors. A key focus is the advanced 18A technology, positioned as Intel’s counter to TSMC’s 3-nanometer node. With strong demand and several customer commitments already in place, the 18A technology represents a significant bet on Intel’s future in chip manufacturing.

Intel’s pivot to extreme ultraviolet (EUV) chip manufacturing technologies marks another critical aspect of its strategy. After initial hesitations that contributed to operational losses and competitive disadvantages, the adoption of EUV technology is expected to dramatically improve cost efficiency and product performance. This shift addresses past missteps and positions Intel favorably in the “post-EUV era,” as CEO Gelsinger highlighted.

Despite the current challenges, Intel’s outlook is optimistic. The company has outlined a path to break even by 2027, driven by efficiencies from EUV technology, reduced reliance on external contract manufacturers, and a growing portfolio of customer commitments. Intel’s ambitious investment of US$100 billion in expanding U.S. chip manufacturing facilities underscores its commitment to recovery and long-term dominance in the foundry space.

Intel’s US$7 billion loss spurs semiconductor industry reinvention (Source – X)

Expanding manufacturing footprint with federal support

Regarding this investment strategy, Reuters reported that Intel is embarking on an expansive effort to construct and enhance factories across four states in the U.S., buoyed by US$19.5 billion in federal grants and loans. Furthermore, the company is pursuing US$25 billion in tax incentives.

The focal point of this five-year initiative is to transform sprawling fields near Columbus, Ohio, into the world’s most significant AI chip production facility by as early as 2027, as explained by CEO Pat Gelsinger.

This influx of federal support comes courtesy of the CHIPS Act, underscoring the U.S. government’s commitment to revitalizing domestic semiconductor manufacturing.

Intel’s expansive blueprint includes upgrades to New Mexico and Oregon facilities and broadening its footprint in Arizona. This move comes as TSMC is also escalating its presence in Arizona, encouraged by President Joe Biden’s efforts to reinvigorate advanced semiconductor production in the U.S.

The financial aid from the Biden administration’s strategy to foster a semiconductor manufacturing renaissance is crucial for Intel’s recovery. Once a leader in producing the most advanced and compact semiconductors, the company saw its dominance wane in the 2010s as it fell behind TSMC, resulting in reduced profit margins from lowered prices to maintain market share with fewer products.

In 2021, Gelsinger unveiled a strategy to reinstate Intel’s position at the forefront of semiconductor manufacturing, acknowledging the need for governmental support to ensure profitability.

With this governmental backing secured, Intel is set to channel about 30% of its US$100 billion investment into construction, covering labor, piping, and concrete expenses. The remainder will finance the acquisition of chip-making equipment from companies like ASML, Tokyo Electron, Applied Materials, and KLA.

This equipment is pivotal for activating the Ohio site between 2027 and 2028, although Gelsinger cautioned that this timeline might extend if the semiconductor market faces downturns. Despite relying on grants and loans, Intel aims to fund most equipment purchases through its existing cash reserves.

Gelsinger has voiced that additional U.S. financial support for chip factories is essential for reasserting the country’s semiconductor manufacturing leadership, a sentiment he reiterated recently.

Despite federal support, Intel faces pressure to promptly demonstrate its competitiveness against Taiwanese and Korean rivals, according to Ben Bajarin, CEO of Creative Strategies.

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Vision 2030: Intel’s Foundry ambition

The strategic realignment towards its Foundry business and aggressive technological advancements reflect Intel’s broader vision. By 2030, Intel aims to become the world’s second-largest foundry, boasting operating margins driven by innovation, cost-efficiency, and a robust client base. This vision is buoyed by the current lifetime value of contracts for the Foundry business, which stands at US$15 billion, and the anticipated benefits of transitioning to EUV manufacturing technologies.

Intel’s journey through financial turbulence and strategic shifts in its Foundry business division is a testament to its resilience and determination to regain its leadership in the semiconductor industry. Through technological innovation, strategic restructuring, and financial investment, Intel is not just aiming to navigate its current challenges but positioning itself for a future where it leads the next wave of semiconductor manufacturing.

As the industry continues to evolve rapidly, Intel’s efforts to redefine its operational and strategic paradigms will be closely watched by competitors and partners alike, marking a new chapter in the global semiconductor landscape.

The post Intel reinvents in semiconductor industry amid US$7 billion loss appeared first on Tech Wire Asia.

The ongoing tension between China and the United States has escalated, with China implementing guidelines to phase out U.S. microprocessors in government computers and servers, including those from Intel and AMD. This initiative is part of Beijing’s broader strategy to replace foreign technology with domestic alternatives.

The Financial Times reports that this directive goes beyond hardware, targeting the replacement of Microsoft’s Windows operating system and foreign database software with local versions. This move is a reflection of China’s nationwide drive towards technological self-reliance, known as “xinchuang,” or IT application innovation.

China’s domestic focus and U.S. countermeasures

Amid increasing tensions, China’s latest procurement rules represent a substantial effort to cultivate domestic technological alternatives. These developments mirror actions in the U.S., where sanctions on Chinese companies for security reasons, legislation to enhance domestic tech production, and restrictions on advanced chip exports to China have intensified.

The rules, discreetly announced last December and effective this year, require government agencies and party organizations to prioritize “safe and reliable” technology for their IT purchases, focusing on domestically produced processors and operating systems.

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On the day the guidelines were introduced, China’s Information Technology Security Evaluation Center listed approved “safe and reliable” technologies, exclusively from Chinese sources, including processors from companies like Huawei and Phytium, which Washington blacklists. These processors utilize a mix of chip architectures, and the operating systems are derived from open-source Linux.

The shift towards domestic technology extends beyond the government sector. State-owned enterprises have been instructed to transition to local providers by 2027, which poses significant financial implications for U.S. tech giants like Intel, AMD, and Microsoft, all of which have substantial sales in China. The approval of their products in the future will require the sharing of detailed R&D documentation and evidence of significant local development.

China has started to block Intel and AMD chips in government computers (Source – X)

Local and provincial finance ministries are ensuring widespread compliance with the new guidelines, although some leeway remains for acquiring foreign technology. Nonetheless, the clear trend towards domestic technology is evident, with officials noting the necessity of additional justification for the purchase of foreign processors.

This inclination towards homegrown technology is anticipated to accelerate, particularly for server processors, due to the simpler transition of the software ecosystem, emphasizing China’s commitment to technological independence and the potential for a significant shift in global tech supply and demand dynamics.

What’s next for Intel and AMD?

The recent challenges faced by Intel and AMD, especially China’s initiative to eliminate U.S. microprocessors in favor of domestic options, emerge at a crucial time for both companies. For Intel, this unfolds as it embarks on an ambitious expansion in the United States, planning to create “the largest AI chip manufacturing site in the world” with a US$100 billion investment over five years.

Quartz has reported that Intel’s CEO, Pat Gelsinger, aims to establish a significant manufacturing site near Columbus, Ohio. This effort is part of a larger investment across four states, with potential construction starting as early as 2027. Supported by nearly $20 billion in federal funding and loans from the Biden administration’s CHIPS and Science Act, this initiative is designed to reinforce American semiconductor leadership.

The CHIPS and Science Act has allocated up to US$8.5 billion in direct funding for Intel, with eligibility for an additional US$11 billion in loans, to boost its semiconductor manufacturing presence in Arizona, New Mexico, Ohio, and Oregon.

During a recent event featuring President Joe Biden at Intel’s Arizona campus, Gelsinger underscored these investments’ national economic and security benefits. He highlighted the critical role of semiconductors in the digital transformation of society and argued that chip production is fundamental to the future of humanity.

Gelsinger also addressed the competitive dimension of these initiatives, emphasizing the importance of maintaining leadership in the semiconductor field, particularly in light of the U.S.-China chip rivalry and the rapid advancements in AI technology.

Despite the U.S.’s former dominance in semiconductor development, it now produces less than 10% of the world’s chips and is not involved in manufacturing the most advanced semiconductors.

Intel’s strategic investments are expected to generate approximately 80,000 jobs, including direct positions within the company, construction jobs, and indirect roles in supplier and related industries. Furthermore, Intel intends to take advantage of a tax credit from the U.S. Treasury Department, worth up to 25% on over US$100 billion in qualified investments.

This contrast between Intel’s aggressive U.S. expansion and the challenges posed by China’s new procurement policies outlines a complex scenario. For Intel, and by extension AMD, China’s move towards domestic technology could signify a considerable market loss.

However, Intel’s substantial investment in U.S. manufacturing and government support represents a strategic shift towards bolstering domestic semiconductor production. This is not merely an economic strategy but a measure of national security and technological sovereignty amidst global competition.

AMD’s innovative response in China

So, that’s what’s going on with Intel. However, AMD was also in the spotlight, as it was recently in China. AMD’s recent appearance in China, marked by the Ryzen AI PC Innovation Summit in Beijing, showcased the launch of the Ryzen 8040 series and 8000G desktop solutions tailored for the Chinese market.

The practice of AMD and Intel marking processors without onboard graphics with an “F” suffix, likely due to iGPU performance issues during manufacturing, presents a unique strategy. Instead of discarding these units, they are repurposed and sold at a lower price, appealing to PC enthusiasts who prioritize discrete graphics cards over integrated GPUs.

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Tom’s Hardware highlights that the Ryzen 7 8700F and Ryzen 5 8400F underscore AMD’s competitive strategy across various price points. This strategy ensures a comprehensive range of products, extending from the affordable Athlon 3000G to the Ryzen 5000 series, and now includes the Ryzen 8000 desktop APUs (without graphics), further expanding the options available to AM5 motherboard owners.

Although specifics for the Ryzen 7 8700F and Ryzen 5 8400F remain unknown (for now), it’s reasonable to infer they share similarities with the AMD Ryzen 8000G Series 65W Phoenix APUs, albeit without the iGPU. For instance, the Ryzen 7 8700G, with its 8-core/16-thread configuration based on the Zen 4 architecture, boasts boost speeds up to 5.1 GHz and a 65W TDP, alongside a powerful Radeon 780M GPU. The CPU specs for the F series are likely identical, with the notable absence of onboard graphics.

The lack of a Ryzen 5 8400G makes speculating about the Ryzen 5 8400F’s specifications challenging. However, it’s plausible that this new Ryzen 5 variant will feature a 6-core/12-thread (or possibly 6-core/6-thread) CPU configuration, adhering to the Zen 4 architecture but without integrated graphics.

It’s important to note that the Ryzen 7 8700F and Ryzen 5 8400F may be exclusive to the Chinese market, thereby circumventing speculation regarding their pricing relative to the G-suffixed counterparts. Although speculation from HXL suggests these products are intended solely for China, AMD’s region-specific offerings have historically found their way to international markets, as evidenced by the Radeon ‘Golden Rabbit Edition’ GPUs now available in Western retail settings.

This strategic maneuver by AMD, amidst Intel’s substantial investment in expanding U.S. semiconductor manufacturing, reflects the broader dynamics of global technology competition and adaptation. As both companies navigate the complexities of international markets and political tensions, their initiatives in China and the United States underline the intricate balance between local adaptation and global strategic positioning.

As China forges ahead with its plans for tech independence, the ripple effects are felt deeply by semiconductor heavyweights such as Intel and AMD. The unfolding scenario underscores a pivotal moment in the semiconductor sector, spotlighting the intricate dance between national ambitions and the interconnectedness of global technology ecosystems.

The post China’s new tech policies challenge Intel and AMD in a shifting landscape appeared first on Tech Wire Asia.

Malaysia’s semiconductor industry is considered one of the fastest-growing sectors in the world. The country is already a hub for the semiconductor supply chain, supplying key components to the industry over the past few years.

Malaysia has also witnessed continued investments in the semiconductor industry. Some of the major players manufacturing chips and other semiconductor components in the country include Intel, AMD, Broadcom, Infineon, Bosch, GlobalFoundries and many more.

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The country currently controls 13% of the global market for packaging, assembly and testing services for semiconductors. It is also the sixth largest source of semiconductor exports in the world. This makes the country an ideal supplier in the semiconductor supply chain, with the US being a major trade partner in the industry too.

According to a report by Nikkei Asia, chip companies Jabil, Micron, Bosch, Western Digital and Lam Research are all expanding their manufacturing footprints in the area around Penang in Malaysia, stretching from Kulim in the north to the Batu Kawan Industrial Park in the south. DHL Express is constructing several logistics centers in the area, after launching direct cargo flights five days a week between Penang and Hong Kong, a chip-trading hub close to mainland China, in mid-2021.

Are the sanctions actually making a difference to China?

Semiconductor industry in Malaysia

Given the development of the chip industry in Malaysia, China may now see opportunities to rely on the country not only to solve its supply chain problems but also as a solution to the sanctions that have been imposed on it.

Last year, the US government enforced chip sanctions on China, intending to slow down the country’s capabilities in developing AI. However, there were some loopholes in the sanctions that allowed Chinese firms to keep buying and building the chips used to train some of the world’s most advanced AI algorithms.

The US only realized the loopholes when companies like Huawei were able to develop a 5G phone despite sanctions. Companies like Nvidia were also still doing business with China but with a different version of chips, which were developed based on the limits of the sanctions. For example, the A800 and H800 chips were heavily sourced by Tencent and Alibaba in China.

Jensen Huang, CEO of Nvidia, who was in Malaysia recently, reaffirmed that China remains an important market for the company. Huang explained the situation, saying, ‘The US has determined to regulate our technology, the highest end of our technology, and limit its access to China. So, the regulations specify the maximum performance we can ship to China, and we will follow the regulations precisely – and very explicitly do so.” He added that Nvidia is currently developing new chips specifically for the Chinese market.

Huang also confirmed that Malaysia is a key player not just in the semiconductor supply chain but also in the data center industry in the region.

In Malaysia particularly, the data center infrastructure, “a layer of computing which is one of the most important parts of AI and cloud, is very successful,” Huang said. “And so I think that we’re going to see Southeast Asia participate across the entire technology stack, and Malaysia play a role in cloud infrastructure,” he added.

China could make use of Malaysian tech proficiency, while US firms like Nvidia also recognize the country’s potential. (image by Shutterstock).

Another loophole?

According to a report by Reuters, several Chinese semiconductor design companies are tapping Malaysian firms for chip assembly. The report said that the Chinese companies are asking Malaysian chip packaging firms to assemble graphics processing units (GPUs).

Assembling chips does not contravene any US restrictions. The sources also said that the assembling is not the same as the fabrication of the chip wafers. While the sources of the Reuters report declined to name the companies involved in the assembling, a few contracts have already been agreed.

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The US recently updated its sanctions on chips towards China, which focused on covering some of the loopholes that were present in the previous sanctions announced in 2022. The focus of the sanctions remains mainly on the sale of sophisticated chipmaking equipment.

Malaysia, a major hub in the semiconductor supply chain, is seen as well placed to grab further business as Chinese chip firms diversify outside of China for their chip assembling needs.

The Reuters report quoted Unisem chairman John Chia as saying “Many Chinese chip design houses have come to Malaysia to establish additional sources of supply outside of China to support their business in and out of China.”

Unisem provides semiconductor assembly and test services in Malaysia. Its packaging and testing facilities are located in Ipoh, Perak, Malaysia, Chengdu, China, and Batam, Indonesia. It also has wafer bumping facilities in Ipoh, Perak, Malaysia and Chengdu, China. China’s Huatian Technology is a majority shareholder.

Apart from chip design, China is Malaysia’s largest trade partner. Malaysia is also part of China’s “One Belt One Road” policy. Chinese investments remain high in the country, across a variety of industries.

Asked whether accepting orders to assemble GPUs from Chinese firms could potentially provoke US ire, Chia said Unisem’s business dealings were “fully legitimate and compliant,” and that the company did not have the time to worry over “too many possibilities.”

Unisem’s customers in Malaysia included those from the United States as well. The US Department of Commerce did not respond to requests for comment.

The post Could Malaysia’s semiconductor industry help China?  appeared first on Tech Wire Asia.

When the US imposed curbs on chip exports to China, Nvidia was still able to continue with the process initially. This was because some Nvidia chips had been designed specifically for the Chinese market.

However, Nvidia’s operations in China may now be over, given the new restrictions announced by the US government. Specifically, the US is imposing tighter controls on the chip supply to China, which targets Nvidia’s A800 and H800 chips. As expected, the main purpose of the restrictions is to prevent China from accessing cutting-edge technology with military uses.

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The announcement not only affected Nvidia’s performance in the market but also hit other semiconductor companies. According to US Commerce Secretary Gina Raimondo, the updated rules will increase the effectiveness of the US controls and further shut off pathways to evade restrictions.

Specifically, the Bureau of Industry and Security for the US Department of Commerce’s rules update can be summarized as follows:

• Imposes controls on additional types of semiconductor manufacturing equipment.
• Refines and better focuses the US persons restrictions to ensure US companies cannot provide support to advance China’s semiconductor manufacturing and codifying previously existing agency guidance.
• Expands license requirements for semiconductor manufacturing equipment to apply to additional countries beyond China and Macau, to 21 other countries with which the US maintains arms embargoes.

The new restrictions target Nvidia chips to China.

The new rules tighten measures taken last year that banned the open sale to China of microchips that are crucial to the manufacturing of powerful AI systems such as ChatGPT. Raimondo insisted that the beefed-up curbs were intended to close loopholes and prevent China’s military use of AI.

“It’s true that AI has the potential for huge societal benefit. But it also can do tremendous and profound harm if it’s in the wrong hands and the wrong militaries,” Raimondo told US media, as reported by AFP.

The rules, which come into effect in 30 days, restrict a broader swathe of advanced chips and chipmaking tools to a greater number of countries, including Iran and Russia They also blacklist Chinese chip designers Moore Threads and Biren, Reuters reported.

US Commerce Secretary Gina Raimondo insisted that the beefed-up curbs were intended to close loopholes and designed to prevent China’s military use of AI. (Photo by Mandel NGAN / AFP)

Semiconductor companies and industry concerns

The Semiconductor Industry Association (SIA) released the following statement in response to the new export controls announced today by the US Commerce Department. SIA represents 99% of the U.S. semiconductor industry by revenue and nearly two-thirds of non-US chip firms.

“We are evaluating the impact of the updated export controls on the US semiconductor industry. We recognize the need to protect national security and believe maintaining a healthy US semiconductor industry is an essential component to achieving that goal.

Overly broad, unilateral controls risk harming the US semiconductor ecosystem without advancing national security as they encourage overseas customers to look elsewhere. Accordingly, we urge the administration to strengthen coordination with allies to ensure a level playing field for all companies.”

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Meanwhile, Dutch chipmaker ASML said that given the length and complexity of the regulations, it would need to carefully assess any potential implications. However, as to its business, from the information received, it understood that the new regulations would be applicable to a limited number of fabs in China related to advanced semiconductor manufacturing.

“These export control measures will likely have an impact on the regional split of our systems sales in the medium to long term. However, we do not expect these measures to have a material impact on our financial outlook for 2023 and for our longer-term scenarios for 2025 and 2030, as communicated during our Investor Day in November 2022.

ASML will seek further clarification from the US authorities on the scope of these new regulations. ASML is fully committed to complying with all applicable laws and regulations, including export control legislation in the countries in which we operate,” stated the Dutch company.

Also commenting on the updated restrictions was Arm Holdings Plc boss Rene Haas. In a report by Bloomberg, Haas said the ruling will be difficult to carry out.

“This is a hard problem to solve by just coming up with a list of components that are deemed critical and then applying some kind of guidance against it,” he said Tuesday at the WSJ Tech Live conference in Laguna Beach, California.

What’s going to happen to Nvidia H100 chips? (image by Shutterstock)

What’s going to happen to Nvidia chips?

As the focus on the updated restrictions on China is mostly on the Nvidia H100 chips, it remains to be seen what the company can do. The chip is crucial for the creation of generative AI as we know it.

A spokesperson for the Chinese embassy told Reuters that it “firmly opposes” the new restrictions, adding that “arbitrarily placing curbs or forcibly seeking to decouple to serve (a) political agenda violates the principles of market economy and fair competition (and) undermines the international economic and trading order.”

For China, the new restrictions are yet another blow to its chip supply and plans. However, China may have already foreseen such restrictions. China has already been researching and developing its own chips, despite the lack of equipment.

Recently, Huawei was able to produce a 5G phone, which caused more concerns to the US, especially since the Chinese were not supposed to have access to the materials needed to develop the technology.

The latest update will not affect chips used in consumer goods such as laptops, smartphones and gaming consoles, though some will be subject to export licensing requirements, a statement said.

On a bridge-building visit to China in August, Raimondo said the US was seeking a more normalized relationship with the world’s second-biggest economy, but the new curbs will likely draw an angry reaction from Beijing.

The United States dominates the global chip industry, with Nvidia as the world’s leader in AI chips, Qualcomm as the top vendor of smartphone processors, and Intel as the strongest developer of PC chips. China is investing heavily in an effort to narrow the gap.

In a report by The Washington Post, analysts say Huawei makes the best Chinese alternative to Nvidia’s AI-training chips, though its production scale has been limited. So far.

The post US chips restriction creates a ripple for Nvidia appeared first on Tech Wire Asia.

While there are many companies in the semiconductor manufacturing market, some components are the speciality of only a handful of companies. In fact, the semiconductor manufacturing process can be divided into two main stages – design and manufacturing.

Companies that focus only on design are referred to as fabless firms. These include companies like Qualcomm, Nvidia and AMD. Companies that focus on manufacturing are called foundries. Examples of foundries include GlobalFoundries, TSMC, Micron Technologies and SMIC. There are also semiconductor companies that do both. They are called integrated device manufacturers (IDMs). These companies include Intel, Samsung and Texas Instruments.

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And then there is the semiconductor manufacturing process supply chain, which involves components from all over the world to make a chip. The semiconductor supply chain remains the most crucial element in the entire process.

The Covid-19 pandemic witnessed unprecedented disruptions to the semiconductor supply chain. Since then, companies have been working to solve their supply chain issues by finding alternatives to speed up the manufacturing process. Some companies have even started to develop their own chips to deal with the issue.

But apart from the pandemic, the trade conflict between the US and China has also affected the production of chips. China is one of the largest manufacturers of semiconductor components for American companies. At the same time, a lot of American brands also have plants operating in China to build their products.

Canon’s new innovation.

Sanctions by the US government on the export of semiconductor materials to China continue to be a concern for most companies. One company caught in this crossfire is ASML. The Dutch company is known for its immersion deep ultraviolet lithography machines, which are a key component of the semiconductor manufacturing process.

Under the restrictions by the US, Dutch export control rules will forbid also ASML from maintaining, repairing and providing spare parts for controlled equipment without specific government approval.

According to a report by The Diplomat, ASML is the world’s largest producer of photolithography machines, which use a light source to etch electronic pathways onto silicon wafers. This process is an essential step in creating the semiconductors that are sold by the likes of TSMC, Intel and Nvidia, which all purchase ASML machines for their chipmaking.

The report also stated that ASML is currently the only company in the world that can manufacture extreme ultraviolet (EUV) machines. Its EUVs are sold for up to US$200 million per machine. The newest model in production, the High NA EUV machine, is valued at over US$300 million and is roughly the size of a truck.

An FPA-1200NZ2C in operation. (image by Canon)

Canon looks to boost semiconductor manufacturing process

Now, Canon seems to have made a breakthrough with lithography machines. On October 13^th, Canon launched the FPA-1200NZ2C nanoimprint semiconductor manufacturing equipment. The machine is capable of executing circuit pattern transfer, the most important semiconductor manufacturing process.

Canon has already been involved in the semiconductor manufacturing process with its existing photolithography systems. By introducing nanoimprint lithography (NIL) technology, Canon will be able to reproduce intricate circuit patterns on the wafer without going through an optical mechanism. It allows for the creation of complex two- or three-dimensional circuit patterns in a single imprint, potentially reducing the cost of ownership.

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Canon’s NIL technology achieves a minimum linewidth of 14 nm, meeting the requirements for producing advanced 5-nm-node logic semiconductors. With advancements in mask technology, it is anticipated that this technology could enable circuit patterning with a minimum linewidth of 10 nm, equivalent to a 2 nm node. The new product incorporates state-of-the-art environment control technology, minimizing contamination by fine particles within the equipment.

Put simply, this technology enables the precise alignment crucial for manufacturing semiconductors with several layers, reducing defects caused by fine particles. It facilitates the creation of intricate circuits, contributing to the production of cutting-edge semiconductor devices. Unlike current photolithography equipment, this new product doesn’t require a special wavelength light source for fine circuits, significantly reducing power consumption and contributing to CO2 reduction.

Additionally, Canon says that the FPA-1200NZ2C can be applied to various uses, including metalenses for XRs, featuring microstructures at the nanometer scale, in addition to logic and other semiconductor devices.

Is there hope for China’e semiconductor manufacturing process? (Image by Shutterstock)

Hope for China’s semiconductor industry?

Since the sanctions imposed by the US, China has already been working round the clock on developing its own equipment. The world’s most populous country has set itself a target of reaching 40% self-sufficiency in chips by 2020 and 70% by 2025. However, it has not even passed the 20% mark yet.

Despite research and developments in local Chinese universities, the country is still struggling to be self-sufficient and continues to import around US$400 billion worth of semiconductors annually.

But according to a report by Bloomberg, Canon’s new machine may open up a new front in the US-China trade war. Currently, the import of EUV machines into China is prohibited by trade sanctions. And until now, importing EUV machines has been the only reliable way to domestically fabricate 5nm chips and smaller.

The Japanese firm’s technique skips photolithography altogether and instead impresses the desired circuit pattern onto the silicon wafer. Because of its novelty, Bloomberg believes that it’s unlikely to be expressly forbidden by existing trade curbs.

That could drive a tree trunk through the US’ sanction plans – or at least force it to steer another set of openly Sinophobic restrictions into place.

Things could be about to get interesting in the world of semiconductor manufacturing again.

The post Canon gives China hope in semiconductor manufacturing process appeared first on Tech Wire Asia.

As we navigate through an era of unprecedented technological advancement, Apple is aiming to once again push the envelope with the delivery of the A17 Pro chip.

The tech behemoth has long been synonymous with innovation, but its recent foray into proprietary silicon has ushered in a transformative new chapter. With the unveiling the  A17 Pro chip, Apple isn’t just enhancing its own devices, but setting new industry benchmarks. But enough glowing hyperbole – let’s take an in-depth look at how the A17 Pro chip promises to redefine the boundaries of performance and efficiency. And how it looks likely to deliver on those promises.

Apple’s in-house silicon technology has been a cornerstone of its strategy for years, epitomizing the company’s belief in a symbiotic relationship between hardware and software. The transition away from Intel was more than just a political shift; it was a commitment to innovation that has culminated in the company’s latest offerings.

What is the A17 Pro that Apple announced?

The recent Apple annual product launch did not disappoint. While the iPhone 15 ships with the familiar A16 Bionic chip—already seen in the iPhone 14 Pro and Pro Max—the real star of the show was the brand-new A17 Pro chip, which will be the heartbeat of the iPhone 15 Pro and Pro Max.

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The A17 Pro signals a new frontier for Apple’s engineering teams. It’s the company’s inaugural chip designed using a 3-nanometer manufacturing process.

This is a major technological advance from the 5-nanometer process used for the A16 Bionic. What does this mean in layman’s terms? A smaller manufacturing process allows for a higher density of transistors, effectively packing more computing power into a tinier, more efficient package.

To put the minuteness of this technology into perspective, Apple has revealed that some of the components inside the A17 Pro’s transistors measure a mere 12 silicon atoms in width. This feat of nanotechnology is nothing short of astounding. Moreover, the A17 Pro comes jam-packed with a staggering 19 billion transistors, showing a six-billion-transistor leap from the A16 Bionic, further pushing the boundaries of what’s possible in such a small form factor.

Architecturally speaking, the A17 Pro carries forward the well-balanced blueprint of its forerunner, having two high-performance cores alongside four energy-efficient ones. Although the clock speeds of these cores have yet to be released, Apple assured users that they can expect a 10% speed bump, coupled with improved branch prediction mechanisms and higher execution bandwidths.

Apple is never a company to make modest claims, so it’s unsurprising that it has dubbed the A17 Pro “the world’s fastest single-threaded mobile CPU.” Given that competitors are still struggling to keep pace with the A16 Bionic though, Apple’s assertion doesn’t seem too far-fetched.

Apple introduces the A17 Pro. (Source – X)

Additionally, the efficiency cores in the A17 Pro are hailed by Apple as the “most power-efficient mobile CPU cores,” claiming a performance-per-watt ratio that is a solid three times more efficient than those of rival processors.

The chip’s machine learning capabilities are also quite remarkable. Though the neural engine retains the 16-core structure found in the A16 Bionic, it comes supercharged with a 2x performance increase. This enhancement equates to an almost unimaginable 35 trillion operations per second, elevating features such as voice recognition and advanced photo sorting to new heights.

Graphics and gaming: Apple’s A17 Pro as a game-changer

Regarding graphics, Apple is bringing a revolutionary, pro-class GPU to the table. It’s an elevated six-core design, specifically engineered for optimized performance and energy efficiency. The GPU also incorporates novel rendering techniques and boasts a 20% acceleration over its predecessor.

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This is a significant moment for game developers and those immersed in augmented reality. The A17 Pro’s GPU offers hardware-accelerated ray tracing, a feature that ensures photorealistic lighting and shadows in rendered environments. This hardware-level support allows for a fourfold increase in ray tracing speed compared to software-based solutions, offering higher frame rates and a more immersive user experience.

Apple is also announcing the inclusion of heavyweight gaming titles like Resident Evil 4, Resident Evil Village, and The Division Resurgence. These high-caliber games will be available on the iPhone, a feat made possible largely because of the new chip’s computational prowess.

A head-to-head comparison: A17 Pro vs. Snapdragon 8 Gen 2

But how does the A17 Pro fare against its main competitor, Qualcomm’s Snapdragon 8 Gen 2? On the CPU front, the Snapdragon is manufactured using a 4nm process and features an octa-core design. But its maximum core speed is just 3.2GHz, falling short when compared to the A17 Pro’s blazing 3.7GHz speed.

As for graphics, Qualcomm had an edge last year with its Adreno 740 GPU. But Apple aims to reclaim its crown with a 20% year-over-year performance improvement and hardware-accelerated ray tracing, giving it a significant leg up in the competition.

Can the Snapdragon compete with the Apple A17 Pro chip? (Source – X)

Apple’s new A17 Pro chip sets the bar exceedingly high in the mobile computing space. As we anticipate head-to-head comparisons with Qualcomm’s next-gen offerings, it’s clear that Apple, at least for now, has regained its leading edge in the world of high-performance, high-efficiency mobile technology.

You can find more about this comparison from Beebom.

The post Let’s break down the A17 Pro chip from Apple – and why it matters appeared first on Tech Wire Asia.

Despite the intense global battle for high-end chip investments, Singapore seems to be catching up fast on its goals to shore up its semiconductor industry. This week, US-based contract chip maker GlobalFoundries unveiled a new US$4 billion (S$5.5 billion) microchip fabrication plant in the city island as part of the company’s global expansion plan.

The fabrication plant is significant because it is the most advanced semiconductor facility in the city island to date, one that, if run at its maximum capacity, makes up 45% of revenue for GlobalFoundries. The company’s press release noted that the fabrication plant spans 23,000 square meters (248,000 square feet) and will be able to produce 450,000 300mm wafers per year at total capacity by 2025 to 2026.

“The new facility spans a cleanroom space of over 23,000 sqm. The first tool was moved into the facility in June 2022, just within a year of the groundbreaking ceremony. The building’s design is engineered to prioritize sustainability, earning both the Administration and Manufacturing buildings Green Mark Gold status from Singapore’s Building and Construction Authority. It is outfitted with the latest technologies and solutions to manage resources and waste, recycle and reuse water and increase overall energy efficiency,” the statement reads.

GF employees in the Fab cleanroom. Source: GlobalFoundries

“It will increase the company’s global manufacturing footprint and boost its ability to serve customers across its manufacturing sites in three continents,” the press release said. After all, the contract chipmaker expects “growth in demand for essential semiconductor chips.” GlobalFoundries’ Singapore general manager, Tan Yew Kong, told reporters. He also noted that the 23,000sqm fab will create 1,000 high-value jobs in Singapore, 95% of which will include equipment technicians, process technicians and engineers.

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“If we run (the Singapore campus’) capacity to the fullest, that will probably be (around) 45% of revenue for GlobalFoundries,” he said. Tan expects weak global demand for chips to pick up by the second half of 2024. The company’s Singapore operations, which serve 200 clients worldwide, also include two other fabs that produce 720,000 300mm wafers and 692,000 200mm wafers a year, respectively. 

As the world’s third-largest foundry by revenue behind TSMC and Samsung, GlobalFoundries makes semiconductors designed by Qualcomm, MediaTek, and NXP Semiconductors. Its chips are found in smartphones, laptops, automobiles, virtual reality systems, video game consoles, and smart speakers and are also used in AI and 5G. Overall, the company serves approximately 200 customers globally.

Singapore’s chip market

Singapore has been witnessing big Western chip makers and related suppliers moving to increase production in the city island, allowing the local semiconductor industry to grow in leaps and bounds in recent years. This year alone, French substrate manufacturer Soitec will invest 400 million euros to double the capacity of its wafer plant in Singapore. At the same time, US semiconductor manufacturing equipment maker Applied Materials has broken ground on a new US$450 million plant in the city-state.

Speaking at the opening ceremony of the GlobalFoundries’ US$4 billion microchip fabrication plant, Singapore’s Deputy Prime Minister Lawrence Wong said the country “cannot afford to engage in a subsidy arms race” and outbid the US, China, Japan, and European Union, which have rolled out massive subsidies to attract chipmakers.

Admitting that Singapore is not the cheapest location globally, Wong noted that “we have many things going for us – our excellent connectivity; our reliability and stable business conditions; and also a critical mass of leading companies based here which cover the value chain, from design to wafer fabrication to assembly and testing.”

He also said that over the years, Singapore has carved out a niche in the production of specialty chips, which are present in almost every device used daily and will continue to be in solid demand given the trends in 5G, automotive, and the Internet of Things. Today, the city island’s semiconductor output makes up 11% of the global market.

The post GlobalFoundries unveils Singapore’s most advanced chip facility to date appeared first on Tech Wire Asia.

Since the Vietnam War, trade and diplomatic relations between the U.S. and Vietnam have not been at their best. For the U.S., doing business with a communist country was historically considered problematic, to say the least. However, things have changed over the last decade, especially with the U.S.–Vietnam Comprehensive Partnership, which was signed a decade ago.

Today, Vietnam is one of the fastest growing economies in Southeast Asia. However, the country is also aware of China’s influence on its trade. Although communist ideology is no longer considered a threat, the U.S. continues to worry about China’s expansion. This concern includes not only China’s territorial claims in the South China Sea, but also its expanding global influence over the world of technology.

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Despite U.S. sanctions on its supply chain, China remains a powerhouse in industries ranging from quantum computing and 5G to semiconductors. At the same time, China’s low-cost technology has become a key factor for American businesses. Currently, most large American businesses, such as Tesla and Apple, manufacture their products in China.

However, with increasing pressure from the U.S. on how these companies can continue to operate in China, many are exploring other countries as alternative locations for their manufacturing plants. Both India and Southeast Asia have emerged as likely destinations for American businesses looking to continue their manufacturing operations without significantly impacting their budgets.

The state of US-Vietnam relations draws interested eyes in China.

Improving US-Vietnam relations

While India has proven to be a worthy competitor to China, its geographic location could result in slightly higher supply chain costs. As a result, more American businesses are considering Vietnam as the ideal location for their production facilities and supply chain management.

According to a report by The Financial Times, the U.S. and Vietnam have agreed to strengthen their ties in response to China’s growing influence. American companies signed deals and partnerships worth billions of dollars during U.S. President Joe Biden’s recent visit to the country.

The President visited Vietnam after the G20 Summit in India. The deals and partnerships signed included  agreements with Boeing, Microsoft and NVIDIA. NVIDIA will be partnering with FPT, Viettel and Vingroup to deploy AI solutions across the cloud, automotive and healthcare industries. Meta and Microsoft have also partnered with Vietnamese companies to roll out AI software across Vietnam to promote digital transformation.

“We’re deepening our cooperation on critical and emerging technologies, particularly around building a more resilient semiconductor supply chain,” said Biden in a joint press conference late on Sunday with Nguyen Phu Trong, General Secretary of the ruling Communist Party of Vietnam.

“We’re expanding our economic partnership, spurring even greater trade and investment between our nations.”

US President Joe Biden holds a press conference in Hanoi on September 10, 2023, on the first day of a visit in Vietnam. Biden travels to Vietnam to deepen cooperation between the two nations, in the face of China’s growing ambitions in the region. (Photo by SAUL LOEB / AFP)

U.S. and Vietnam semiconductor partnership

The White House affirmed the U.S.’s commitment to increasing support for Vietnam in the training and development of a high-tech workforce. Acknowledging Vietnam’s tremendous potential as a major player in the semiconductor industry, both President Biden and General Secretary Phu Trong expressed their energetic support for the rapid development of Vietnam’s semiconductor ecosystem to improve its position in the global semiconductor supply chain.

“Toward this end, the United States and Vietnam announced the launch of semiconductor workforce development initiatives – supported by initial seed funding of US$2 million from the U.S. government, in conjunction with future Vietnamese government and private sector support,” the White House statement said.

Meanwhile, the U.S. State Department announced its partnership with the Vietnamese Government to explore opportunities for growing and diversifying the global semiconductor ecosystem under the International Technology Security and Innovation (ITSI) Fund, established by the CHIPS Act of 2022.

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“Vietnam shows promise as a partner in ensuring the semiconductor supply chain is diverse and resilient. Products ranging from vehicles to medical devices increasingly rely on semiconductors as the building blocks of today’s economy. By building on Vietnam’s existing strengths in assembly, testing, and packaging. This collaboration strives to identify new opportunities that attract industry investments and expand the technical workforces in both countries.

The partnership is beginning with a review of Vietnam’s current semiconductor ecosystem, regulatory framework, and workforce and infrastructure needs. The outcome of this review will inform potential future collaboration on developing this critical sector,” said the State Department.

Several U.S. companies also announced plans to build manufacturing plants in the country. Marvell Technology had already announced plans to build a world-class design center in Ho Chi Minh City, Vietnam in May. The site will be home to advanced semiconductor engineering and will be a top technology workplace for employees to enhance their skills and achieve outstanding career opportunities.

Apart from Marvell, Amkor unveiled a new US$1.6 billion factory in the Bac Ninh Province. The plant will assemble, package and test chips, with operations beginning at the end of 2023. Synopsys will also be starting a design and incubation center in conjunction with Saigon Hi-Tech Park.

U.S.-Vietnam relations – a new chapter?

The post Vietnam could be the answer to U.S. chip supply chain appeared first on Tech Wire Asia.

As the semiconductor industry in China continues to grow and become self-sufficient, there is mounting concern in the US. Specifically, the Department of Commerce and Defense in the US is worried about how China’s semiconductor industry growth could impact national security.

Both departments have signed a memorandum to extend collaboration to strengthen the US semiconductor defense industrial bases. To be precise, both departments will increase information sharing to facilitate the coordination of the CHIPS for America’s incentives program. This is also to ensure that respective investments position the US to produce semiconductor chips that are essential for national security and defense programs.

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According to a press statement, Dr. Laura Taylor-Kale, Assistant Secretary of Defense for Industrial Base Policy said the agreement is an important step forward in increasing the capacity and resiliency of the domestic semiconductor industry base.

“It is essential for the Department of Defense (DoD) and Department of Commerce (DoC) to consult one another to ensure we are making complementary investments that support a robust semiconductor industrial base. Both Departments are working together to expand domestic semiconductor production capacity in a coordinated fashion,” said Dr Taylor-Kale.

For CHIPS Program Office Director Michael Schmidt, the agreement will enable teams to coordinate the national security review of applications, produce semiconductor chips in America that the military relies on, and bolster domestic supply chain resiliency.

Chips for America is part of President Biden’s economic plan to grow investment in the semiconductor industry in the US. A total of US$ 52 billion has been allocated to the plans, which also include stimulating private sector investment, the creation of good-paying jobs, and the revitalization of marginalized communities.

Fab equipment spending continues to increase. (Image – Shutterstock)

The state of the global semiconductor industry

The global semiconductor industry faces heavy competition as the US continues to control China’s semiconductor supply chain. China, which is one of the world’s largest semiconductor producers has already had several sanctions on chip imports. However, the semiconductor industry in the country has been working on alternatives within the country to ensure that production continues and that a global supply chain shortage of semiconductors is avoided.

In fact, according to a report by SCMP, sales of semiconductor equipment to China dropped 23% year on year in the first quarter of 2023 amid US export curbs, according to SEMI data. Interestingly, the US and the rest of North America bought 50% more semiconductor equipment during that period.

SEMI, which monitors global semiconductor manufacturing also highlights in its March report that while China is forecast to place third in equipment spending worldwide in 2024, U.S. export controls are expected to limit the region’s spending to US$16 billion, comparable to the region’s investments in 2023.

In 2024, the US is expected to remain the fourth largest region in spending with a record US$11 billion in investments. Meanwhile, Europe and the Middle East are also forecast to log record investments next year, increasing spending by 36% to US$8.2 billion. In Japan and Southeast Asia, fab equipment is expected to increase to US$7.0 billion and US$3.0 billion, respectively, in 2024.

According to a report by Reuters, US Commerce Secretary Gina Raimondo said the Biden administration is seeking to carefully target U.S. controls on exports to China, but rules will cost firms some revenue. The report quoted Raimondo saying “that you deny American companies revenue and China can get the product elsewhere, or China can get the product from other countries.” Raimondo added that rules “will deny some revenue to American companies, but we think it’s worth it.”

US Commerce Secretary Gina Raimondo said the Biden administration is seeking to carefully target U.S. controls on exports to China.

China’s semiconductor industry turning to legacy chips

Meanwhile, the semiconductor industry in China is working round the clock to find solutions to the bans being imposed on them. A report by Bloomberg interestingly highlighted that US and European officials are now growing increasingly concerned about China’s accelerated push into the production of older-generation semiconductors. The concerns have led to officials debating new strategies to contain the country’s expansion.

The report also stated that officials are worried that Chinese semiconductor companies would dump these legacy chips on the global markets in the future. They feel that Western companies may then have no choice but to be dependent on China for semiconductors.

For the Chinese semiconductor industry, apart from the global supply chain disruptions due to the COVID-19 pandemic, no matter how many bans are implemented, they continue to find a way to avoid disruption and continue with their chip production. What makes it more interesting is many countries are still doing business with them, which is why the US feels that they need to be more prepared to deal with any potential national security issues.

As such, it only makes more sense why the DoD and DoC are working together in chip development in the semiconductor industry in the US. The end game is to ensure that the chips are not only made in the US but also go through a national security review and are used by the defense industry.

The post As China’s semiconductor industry grows, concerns mount in the US appeared first on Tech Wire Asia.

As China’s export restrictions loom, the prices of vital chipmaking materials are on an upward trend. In July, the Chinese Ministry of Commerce announced forthcoming controls on the export of gallium, germanium, and some of their compounds. This move requires sellers intending to export these key materials from China to apply and obtain official approval beforehand.

Beijing justifies these impending measures as a ‘safeguard to national security and interests,’ set to take effect on August 1. However, many perceive these actions as a countermeasure to the technology export restrictions that the US and other countries have imposed on China.

According to Nikkei Asia, gallium prices have seen an 18% increase since the end of June, reaching US$332.50 per kilogram in the US and European markets. Meanwhile, the cost of germanium has risen modestly by 4% this month, hitting about US$1,390 per kilogram.

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Remember, germanium is crucial in high-speed computer chips, specific plastics, and military technologies such as night-vision devices and satellite imagery sensors. Gallium’s applications include the construction of radars, radio communication devices, satellites, and LEDs. This makes these elements critical to the development and performance of many high-tech devices and systems, from consumer electronics to military hardware.

Concerns have arisen that a diminished supply of either material could inflate the manufacturing costs of certain electronic products, or potentially impede the advancement of newer, sophisticated chips. This could have a ripple effect across the technology sector, slowing innovation, increasing consumer costs, and potentially changing the competitive landscape among tech companies.

China: A dominant force in the global supply of key materials

While estimates differ, China is believed to be the world’s principal source of both metals. It’s estimated to account for approximately 60% of the global germanium supply, with the rest primarily sourced from Canada, Finland, Russia, and the United States. Gallium’s global supply, meanwhile, is believed to be at least 80% Chinese, with some estimates as high as 98%.

Germanium is crucial in high-speed computer chips. (Source – Shutterstock)

Reports from July indicated that companies had begun stockpiling these materials or intermediate products that rely on them.

Freiberger Compound Materials, a German company that uses gallium sourced from China to produce its gallium-arsenide semiconductor wafers, informed Reuters of orders for inventory increases as customers rush to stockpile. CEO Michael Harz noted that the industry was quite tense over the situation.

However, as The Register reported following the announcement of the export restrictions, some experts argue there’s no immediate cause for alarm. Neither gallium nor germanium is currently in short supply, and any attempts to restrict their supply could trigger production increases elsewhere.

This viewpoint is reinforced by The Stimson Center, a US-based think tank, asserting that these new controls will push countries to implement policies reducing their reliance on China for vital materials, a process that could take years.

Echoes of the past: Recalling China’s rare earth export restrictions

They reminded that China attempted similar strategies with the so-called rare earth elements in 2010, leading importing countries to diversify their supply sources away from China and sparking an increase in smuggling, causing minimal impact on rare earth shipments from Chinese sources.

Concerns have surfaced over potential restrictions on rare earth exports from China, recalling its shipment curbs from 12 years ago during a dispute with Japan. China is the largest global producer of these metals, integral to EVs and military equipment.

However, China has already issued a foreboding warning that the upcoming export controls could mark the start of their countermeasures in the chip wars, and they could broaden these measures to other crucial materials if external restrictions on China keep escalating.

Following a series of previous curbs, Washington is weighing up additional restrictions on high-tech microchip shipments to China.

The United States and the Netherlands are further anticipated to limit chipmaking equipment sales to China, to prevent China’s military from exploiting their technology.

The day after the announcement of these curbs, Chinese President Xi Jinping reemphasized his call for “stable and smooth functioning of regional industrial and supply chains” during a virtual address to the leaders at the Shanghai Cooperation Organization summit, as reported by state media.

As China flexes its export muscle on critical chipmaking materials, a ripple effect is set to shake the world’s semiconductor industry. China’s strategy is a stern reminder of the importance of diverse sourcing for maintaining resilient supply chains. The immediate surge in gallium and germanium prices is just a prelude to the potential long-term ramifications of such a geopolitical chess move.

However, this is not just an issue for the present, but a harbinger of what the future of global tech dominance could entail. It signals a new front in the technology war, where resource control might become a common weapon. Such scenarios could fundamentally reshape the global tech industry, determining which countries and companies can lead in developing next-generation technologies.

Nations reconsidering supply chain strategies

Nations that previously relied heavily on China’s resources must rethink their supply chain strategies and develop contingencies for such situations. This could lead to a global tech landscape reshaped by the urgency to find alternative resources, potentially opening doors for other countries to enter these roles.

Moreover, while immediate panic may be overstated, the prospect of escalating ‘chip wars’ and broader export controls from China should not be taken lightly. This could set a precedent for similar tactics involving other critical resources, potentially leading to a cascading effect on several technology sectors.

Ultimately, this situation underscores the intricacies and vulnerabilities of global tech supply chains. It’s a wakeup call for industries and governments alike to foster cooperative solutions and diversification strategies to ensure stability in the face of geopolitical turbulence.

The post Chips at stake: China’s export controls and a semiconductor supply chain shakeup appeared first on Tech Wire Asia.