1. TSMC to set up two CoWoS advanced packaging plants, plans to start construction in May

TSMC is set to establish two advanced CoWoS packaging plants within the Chiayi Science Park. The first of these plants will cover an area of approximately 12 hectares and is expected to break ground in May this year, with completion targeted for the end of 2026 and mass production slated for 2028, creating 3,000 jobs.

CoWoS, which stands for Chip on Wafer on Substrate, represents a unique packaging technology that diverges from traditional 2.5D and 3D formats in terms of chip arrangement. It essentially involves stacking chips together (CoW) and then packaging them on a substrate (WoS). This advanced packaging technique is known for its ability to reduce chip space, lower power consumption, and cut manufacturing costs. It is extensively used in top-tier AI chips, including NVIDIA's GH100 and GH100 AI.

Driven by the rapid development of AI, there is a significant demand for advanced packaging that currently exceeds supply, leading to a pronounced gap in CoWoS packaging capacity. In response, TSMC is actively expanding its capacity. According to their announced plans, TSMC's capacity for CoWoS packaging is expected to reach 32,000 units per month by the end of 2024, with an increase to 44,000 units by the end of 2025.

2. Dissolution! GaN Component Supplier Odyssey to Sell for $9.52 Million

Odyssey Semiconductor Technologies Inc., a renowned designer and contractor specializing in high-voltage power switch components and systems using proprietary gallium nitride (GaN) processing technology, has recently announced the sale of most of its assets to an unnamed major semiconductor company for $9.52 million, with plans to dissolve the company thereafter.

Odyssey, which owns a 10,000 square foot semiconductor wafer manufacturing plant equipped with advanced semiconductor development and production tools, focuses on the development of 650V and 1200V vertical gallium nitride field-effect transistors. While the identity of the buyer will remain confidential during a 20-day period to seek potential additional buyers, the asset sale has been approved by Odyssey's board of directors. The transaction is expected to be finalized in early Q3 2024, subject to customary closing conditions, including approval from Odyssey's shareholders. After repaying loans and transaction expenses, approximately $1.3 million is expected to be available for distribution to shareholders. The transaction is anticipated to be completed by July 1, 2024, at the latest by July 10, with the company planning its dissolution by the end of 2024 at the earliest.

3. Shifting Focus: SK Hynix Reorganizes Its Business in China

SK Hynix, one of South Korea's largest semiconductor companies, is reorganizing its business operations in China in response to the escalating geopolitical tensions and the growing concerns over political security among global tech enterprises. The tech giant is shutting down its company established in Shanghai in 2006 and plans to move its business focus and China operations center to its semiconductor manufacturing plant located in Wuxi, Jiangsu. This move is driven by concerns over geopolitical issues, prompting the company to establish a special internal task force last year to address these challenges.

Through this reorganization, SK Hynix aims to mitigate risks by prioritizing the restructuring of sales companies of lower importance, especially considering the declining sales of the Shanghai company and its geographical proximity to Wuxi. The Wuxi production and sales company has now become the new center of SK Hynix's business in China, which also includes a NAND flash factory in Dalian and a packaging factory in Chongqing.

Furthermore, SK Hynix plans to increase investment in the Wuxi factory to expand capacity and enhance technological levels. Reports from January indicate that SK Hynix intends to upgrade some of its DRAM production equipment at the Wuxi plant to the fourth-generation 10nm process this year. This upgrade aims to boost its competitiveness in the global semiconductor market and address potential risks in the supply chain.

4. Samsung Electronics Eyes Partial Acquisition of Continental's Automotive Electronics

Samsung Electronics is contemplating its first major acquisition since buying Harman in 2017, targeting the automotive electronics segment of Germany's Continental AG, with a focus on Advanced Driver Assistance Systems (ADAS) and vehicle displays. Continental has previously sold several automotive divisions, including ADAS and display units. Harman, a Samsung subsidiary, views this potential acquisition positively, foreseeing a boost in ADAS competitive edge.

The potential purchase is under review by Harman's Chairman, Young Sohn. Samsung's leadership is discussing strategies for sourcing necessary components. Continental, one of the world's leading automotive component manufacturers, is addressing challenges of unmet future demand for car parts. As of the end of 2023, Continental employs around 200,000 globally, with a 2023 fiscal year revenue of 41.4 billion euros, marking a 5.1% increase. Continental forecasts its 2024 sales to be between 41 and 44 billion euros, with an adjusted EBIT margin of about 6% to 7%.

5. Semiconductor Companies in Taiwan to Face Over 15% Electricity Price Hike Starting April

Starting April, Taiwan's semiconductor powerhouses such as TSMC and Micron are set to confront a steep increase in electricity prices, significantly impacting their production expenses. This was revealed during a confidential meeting at the Hsinchu Science Park, where the possibility of constructing their own nuclear power facilities was discussed as a strategic response to mitigate rising energy costs. The imminent price adjustment spans across all sectors, with an average surge expected to be around 10% or more. Specifically, the semiconductor sector, known for its high energy consumption, could see increases surpassing 15%. For exceptionally high electricity consumers like TSMC and Micron, the hike might range between 20% to 30%, potentially diminishing profit margins due to the inherently energy-intensive nature of advanced chip manufacturing processes. TSMC, which reported an electricity usage of 210.8 billion kWh in 2022, anticipates further growth in demand, projecting an escalation in energy costs that could reach significant figures by 2024.

Resources:

1. https://www.esmchina.com/news/11608.html

2. https://www.esmchina.com/news/11610.html

3. https://www.esmchina.com/news/11600.html

4. https://www.esmchina.com/news/11612.html

5. https://www.esmchina.com/news/11613.html

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