Taiwan semiconductor digest: week 35
TSMC dominated the Taiwan semiconductor news last week with its groundbreaking ceremony for the company’s new European fab, while AMD announced the acquisition of ZT Systems to boost its AI system development capabilities. The latest research from SEMI and Counterpoint points to signs of growth for the semiconductor fabrication industry during Q2 of this year driven by growing demand for AI and HBM chips.
TSMC held the groundbreaking ceremony for its new European foundry, the European Semiconductor Manufacturing Company (ESMC), in Dresden, Germany. The event was attended by TSMC’s CEO C.C. Wei, European Commission President Ursula von der Leyen, and German Chancellor Olaf Scholz. Also present were the heads of TSMC’s joint venture partners: Infineon Technologies AG, NXP Semiconductors NV, and Robert Bosch GmbH, each holding a 10% stake in the venture, while TSMC retains a 70% stake.
The ESMC fab represents an $11 billion investment and is expected to produce 40,000 12-inch wafers monthly, utilizing TSMC’s 28nm and 22nm planar CMOS, as well as 16nm and 12nm process technologies. The facility is projected to begin production by the end of 2027.
AMD is reported to be investing NT$8.64 billion ($270 million) in the establishment of two new R&D centers in the southern cities of Tainan and Kaohsiung and receive NT$3.31 billion ($103.24 million) in support from the Ministry of Economic Affairs’ Global Innovation Partnership Initiative. The new R&D centers will employ around 400 people, and will focus on as AI, silicon photonics, and bolstering collaboration with the Taiwan IT industry ecosystem.
AMD also announced its acquisition of ZT Systems, a New Jersey-based provider of hyperscale and enterprise server solutions. The $4.9 billion cash and stock deal is part of AMD’s long-term AI strategy. AMD Chair and CEO Lisa Su emphasized that this acquisition will enhance the company’s data center AI systems and customer enablement capabilities.
According to SEMI, the global semiconductor manufacturing industry showed encouraging signs of growth in Q2 2024, driven by increased demand for AI chips and high bandwidth memory (HBM). Capital expenditure has stabilized, and installed fab capacity has risen to 40.5 million wafers per quarter (300mm equivalent), with a projected increase of 1.9% in Q3 2024 as more capacity is installed for advanced nodes.
Research firm Counterpoint reported a 9% quarter-over-quarter and 23% year-over-year increase in global foundry industry revenue for Q2 2024. The growth is primarily attributed to strong AI demand, while recovery in non-AI segments like automotive and industrial remains slow. Chinese foundries, including SMIC and HuaHong, have recovered more quickly compared to global peers, with utilization rates surpassing 80%. TSMC continues to lead the market with a 62% share, followed by Samsung at 13%.
Chinese imports of semiconductor equipment reached a record high for the first seven months of 2024, totaling nearly $26 billion. Dutch company ASML saw a 21% surge in sales of older lithography systems to China in Q2, accounting for nearly half of its total revenue. This reflects China’s ongoing efforts to bolster its semiconductor manufacturing capabilities amidst global supply chain challenges.
