Entering August, several chip factories have welcomed the latest developments. Tata has invested $3.22 billion in the construction of an IC backend factory in India and held the foundation-laying ceremony on August 3rd; TSMC confirmed that the German factory will start construction on August 20th, aiming to meet the EU's demand for localizing automotive and industrial chip production; Intel's investment in two wafer fabs in Ohio has increased to $28 billion, in order to continue advancing Intel's IDM 2.0 strategy, it has announced a series of significant cost-reducing measures; Infineon announced that the so-called "world's largest 8-inch silicon carbide power wafer factory" in Kirchheim will welcome the factory completion ceremony in August.
Tata Invests $3.22 Billion in the Construction of an IC Backend Factory in India
Recently, Tata Electronics has begun the construction of its first integrated circuit (IC) backend factory in Assam, eastern India, marking a milestone in India's journey to establish a local chip manufacturing ecosystem.
It is reported that Tata has started the construction of a semiconductor manufacturing department in Assam and held the foundation-laying ceremony on August 3rd. The factory involves an investment of 270 billion Indian rupees ($3.22 billion) and is expected to create 15,000 direct jobs and 11,000 to 13,000 indirect jobs.
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The factory is expected to be operational by 2025 and will meet the needs of industries such as automotive and mobile devices. The factory will also focus on advanced semiconductor packaging technologies, including wire bonding, flip-chip, and integrated system-in-package (I-SIP) technologies developed in India.According to reports, Tata Group Chairman N Chandrasekaran stated: "Considering our desire to act swiftly, we are working hard to expedite the construction of this factory. We hope that by some time in 2025, we will be able to complete part of the facility construction and quickly start operations."
TSMC confirms the ground-breaking ceremony for the German factory on August 20th
On July 30th, TSMC confirmed that it will hold the ground-breaking ceremony for its new factory in Germany on August 20th, and will then proceed with land leveling work, with the aim of starting construction by the end of this year, targeting the start of production by the end of 2027. It is known that TSMC Chairman and President Wei Zhejia will lead a company delegation to Germany to attend this event, personally preside over the ceremony, and meet with upstream suppliers, downstream customers, and German government officials.
Previously public information showed that the new factory in Germany will be called the European Semiconductor Manufacturing Company (ESMC), with TSMC holding 70% of the new factory's shares, and the partners Bosch of Germany, Infineon, and the Dutch chip manufacturer NXP each holding 10%. The first president of ESMC will be former Bosch Dresden wafer factory director Christian Koitzsch. The wafer factory will focus on automotive and industrial chips, aiming to meet the EU's demand for local automotive and industrial chips. The specific processes are mature processes such as 28/22nm planar CMOS, 16/12nm FinFET, etc., and are expected to achieve mass production in 2027, with a monthly production capacity of up to 40,000 12-inch wafers.
According to relevant sources, the invitation to the foundation ceremony mentioned that the first wafer factory of ESMC will represent "a new dimension of sustainable semiconductor production in Europe." It is reported that the smooth progress of TSMC's German factory has given some boost to European semiconductors. At present, due to the delay in subsidies under the "EU Chip Act", coupled with the impact of weak demand for electric vehicles and other factors, several companies have postponed their plans to build factories in Germany.Previously, Intel announced that its plan to invest 17 billion euros in building a cutting-edge factory in Magdeburg, Germany, has been postponed, and another American chip manufacturer, Wolfspeed, has also announced that the start of the construction of the Ensdorf factory in Saarland, Germany, has been postponed to 2025, and is now focusing on expansion in New York.
The EU Chip Act was officially published in 2022, with the goal of increasing the EU's share of global chip production from the current 10% to 20% by 2030. However, as of now, according to the Act, the European Commission has only approved the issuance of two subsidies, and there are very few factories under construction. The former CEO of lithography machine giant ASML, Wennink, said in an interview with the media at the beginning of this year that the EU does not have the ability to build production quickly enough, and it is "completely unrealistic" to achieve the goal of increasing its share of the global computer chip market to 20% by 2030.
Intel's investment in two wafer fabs in Ohio increases to 28 billion US dollars!
On July 29, Intel announced plans to invest more than 28 billion US dollars to build two new cutting-edge process wafer fabs in Licking County, Ohio, USA. This is an increase of 8 billion US dollars compared to Intel's initial plan of 20 billion US dollars.
Public information shows that the construction of the above-mentioned factory officially started in September 2022, and the construction progress of Intel's first wafer fab in Ohio is steadily advancing, with mass production expected in 2026. It is reported that the scale of Intel's Ohio base is as high as 1,000 acres (about 404 hectares), which is enough to support up to 8 wafer fabs. This also provides convenient conditions for Intel's subsequent further expansion.Intel's official news indicates that as the largest single private sector investment in Ohio's history, the initial phase of the project is expected to create 3,000 Intel jobs, generate 7,000 construction jobs during the construction process, and support tens of thousands of additional local long-term jobs in a broad ecosystem of suppliers and partners. To support the development of the new base, Intel has committed an additional $100 million to cooperate with educational institutions, establish talent channels, and support research projects in the region.
Recently, Intel announced its financial report for the second quarter of this year, with the company achieving revenue of $12.8 billion, a year-on-year decrease of 1%. The operating profit for the quarter fell by 85% to $83 million. The net loss was $1.6 billion, compared to a profit of $1.5 billion in the same period last year. As a highlight of this quarter's financial report, Intel's PC business revenue increased by 9% to $7.4 billion, offsetting the adverse factors of the decline in data center business.
Intel expects the current quarter's revenue to be about 10% lower than market analysts' expectations, and the gross margin is about 25% lower than market expectations, which means that the recent performance prospects of this chip giant are lower than the market expected. Intel CEO Gelsinger explained that the disappointing profit in the second quarter was mainly due to the company's continuous advancement of the product roadmap. CFO Zinsner specifically explained that this was because the company is accelerating the promotion of AI PC products, coupled with higher than expected non-core business expenses and related costs of capacity constraints. Intel also mentioned that due to changes in U.S. trade policy, chip sales have declined, and the impact will continue, and the third quarter will also be negatively affected.
Intel's IDM 2.0 strategy is grand and destined to have a huge capital expenditure. Its financial data in the past two years that did not meet expectations has made the market full of doubts about its wafer foundry plan. According to the current plan, Intel's capital expenditure this year is as high as $25 billion to $27 billion, and it will continue to invest more than $20 billion next year.
In order to continue to advance the IDM 2.0 strategy, Intel recently announced a series of major cost-saving measures, including simplifying the product portfolio and reducing capital costs.Image source: Screenshot from Intel's official website
Regarding the current situation, Kissinger explained at the analyst meeting that he still needs more time to turn around Intel. "It is clear that there is still a lot of work to be done in the future. Rebuilding the iconic Intel is a huge project, and we are entering a new phase, transforming the transformation work into a sustainable economic model."
According to a report from Standard & Poor's, Intel's cost-cutting plan may alleviate short-term cash flow issues, but whether Intel can maintain its business competitiveness and healthy growth remains unknown.
Infineon's Kulim factory is about to hold a completion ceremony
Recently, Infineon officially announced on the "YouTube" platform through a video that its No. 3 factory in Kulim, Malaysia, will hold a wafer factory completion ceremony in August. The official said this marks the official countdown to the production of the world's largest 200mm (8-inch) silicon carbide (SiC) power wafer factory.Public information shows that Infineon's new wafer factory in Kulim, Malaysia, initially received 2 billion euros in internal funding support. In mid-2023, the factory received another 5 billion euros in investment for the construction of the third factory and equipment in Kulim. The factory is committed to building the world's largest 200mm (8-inch) silicon carbide power semiconductor wafer factory. It is reported that the expansion plan for the third plant has obtained about 5 billion euros (approximately 39.1 billion yuan) in design-win contracts and about 1 billion euros (approximately 7.8 billion yuan) in prepayments from long-term customers such as SAIC, Ford, and Chery.
At present, both Infineon and Wolfspeed are competing for the title of the world's largest 8-inch SiC wafer factory, but neither has disclosed specific production capacity. In early February last year, Wolfspeed announced plans to build the world's largest and most advanced 8-inch SiC device manufacturing factory in Saarland, Germany. This European factory will join the Mohawk Valley device factory (which opened in April 2022) and the John Palmour SiC manufacturing center (i.e., the SiC material factory in North Carolina, USA) to form an important part of Wolfspeed's 6.5 billion US dollar capacity expansion plan. The latest industry news recently shows that Wolfspeed has postponed the plan for the German factory.
In addition to Infineon and Wolfspeed, onsemi announced at the end of May this year to invest 5 billion euros in the construction of the world's first fully vertically integrated SiC factory in Catania, Italy. It is reported that the Italian government will provide 2 billion euros in subsidies to STMicroelectronics under the framework of the EU's "Chip Act". The factory will start production in 2026 and achieve the mass production of the first 8-inch SiC wafers, with the goal of reaching full production by 2033. At full production, it can produce up to 15,000 wafers per week, with an annual production capacity of 480,000 wafers.
At present, the transition from 6-inch to 8-inch silicon carbide wafer manufacturing worldwide has become highly intense. TrendForce believes that overall, SiC is in a rapidly growing and highly competitive market, where economies of scale are more important than any other factor. Leading IDM manufacturers have changed their previous conservative and steady strategic posture and have actively invested in SiC expansion plans, hoping to establish a leading position. So far, more than 10 manufacturers worldwide are investing in the construction of 8-inch SiC wafer factories. It can be foreseen that in the future, as the market scale continues to expand, competition in the SiC field will also become more intense.
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