Japan

Japan kick starts a $67 Billion program for Semiconductors.

The US – China chip wars and uncertainty with Taiwan have Japan taking measures to revive its semiconductor market. Its supplies have fallen to no more than 10% of the world’s chips. Japan wants to triple chip production by three times by 2030.

To enable this, Japan is offering up to 50% subsidies to big international players and setting up a government-funded Rapidus project in Hokkaido aimed at a player at the forefront of silicon-chip wizardry.

Rapidus Corp. shall mass produce state-of-the-art 2-nanometer logic chips by 2027. Expertise at Japan’s National Technology Institute has long been stalled at 45 nm, so for Rapidus to reach a significant output of 2nm chips using IBM technology is aggressive.

Chipmaker Taiwan Semiconductor Manufacturing Co. has a $7 billion factory coming up in southern Japan, with another one to come ( 6nm to 7nm chips ), and plans for a third. Japan wishes to reinvigorate the local chip-related ecosystem.

Micron Technology Inc., ASML Holding NV, and Samsung Electronics Co. also invest in production or research facilities in Japan.
Japan’s chip sector hemorrhaged around 30% of its jobs in the two decades through 2019 as its share of the global chipmaking market fell from over 50% to less than 10%. That leaves a shortage of at least 40,000 workers over the next decade as the population declines, according to METI.

Canon introduces disruptive Nanoimprint technology, a low-cost stamp machine to make chips instead of present technology of etching with UV light.

Canon claims it can make 2- 5 Nanometer chips. Canon challenges industry leader ASML, whose machines cost over US $150mn each.

Japan Investment Corporation (JIC), a government-backed fund, acquired JSR – Critical Japanese Semiconductor Materials Supplier manufacturing specialist chemicals for chip making, for US$ 6.4 Billion and participated in a consortium buyout of Fujitsu’s chip-packaging arm Shinko Electric Industries for around $4.7bn.

JIC made these acquisitions to strengthen the companies financially to fight increasing international competition in the Semiconductor industry. JSR’s investors and customers were not too happy with what is seen as an indirect nationalization.

Samsung, TSMC, and JSR’s other big customers sought an explanation. Japan’s aspiration to compete against them via Rapidus, backed by the government, has also increased their sensitivity.

SOUTH KOREA

Samsung and LG joined hands against the Chinese for dominance in the Display Market.

Chinese manufacturers have a virtual monopoly on the LCD market. They are now an existential threat to South Korean makers of premium OLED technology. Japan has been out of the LCD and OLED market it created due to price competition.

China- state-owned BOE Technology is building a $9bn plant to produce OLED panels.

LG and Samsung are concentrating on OLED displays for high-end TVs, smartphones, and tablets, as well as next-generation micro OLED displays for virtual and augmented reality devices such as Apple’s Vision Pro headset.

However, BOE’s new plant will produce OLED substrates using the latest technology — going into battle to supply OLED panels to the likes of Apple for next-generation iPads and MacBooks.

Samsung Electronics Co. unveils its first wearable intelligent AI-enabled Galaxy Ring as part of its health lineup at the Mobile World Congress in Barcelona with the Galaxy S24 smartphone.

Health tracking is already a key selling point of smartphones and watches, with Samsung, Apple Inc., and Alphabet Inc.’s Google using such features to attract and retain customers—more woe’s to Apple in this segment.

CHINA

The world’s biggest solar panel company, Longi, cautions West not to cut out Chinese suppliers. Cites costs would double, and green targets would be missed.

China’s Longi accounts for 20% of the global market. China dominates solar manufacturing, accounting for over 80 percent of global production.

There is a rising Western concern that Beijing’s subsidies for its clean tech industries — including wind, batteries, and electric vehicles — have boosted Chinese manufacturing capacity far beyond the levels needed to meet domestic demand, leading to unfair trade practices.

Longi makes most of its products in China but also has factories in Vietnam and Malaysia. It is planning a new factory in India. Longi is also in talks to enter Saudi Arabia through a local partner.

China will continue to lead solar technology and dominate more than three-quarters of the world’s solar polysilicon, wafer, cell, and module manufacturing capacity for the next few years at least.

Solar production costs in China fell by over 40 percent to around 15 cents per watt, compared to 30 cents in Europe and 40 cents in the US. The fall was driven in part by lower material costs and oversupply.

Saudi Arabia negotiates stringent terms for IPR and localisation in tech deals with China

China, the largest customer of Saudi oil, purchased 86mn tonnes of the fuel last year; a large part of the payment is settled in the renminbi. One way is to spend it on Chinese goods and services. This is driving substantial joint ventures between Saudi and Chinese technology companies.

Alibaba and SenseTime are among the top Chinese groups to have secured deals worth hundreds of millions of dollars with Saudi Arabia in exchange for setting up joint ventures in the country that will share IPR and technical expertise.

Artificial intelligence group SenseTime won a contract for the futuristic megacity Neom. SenseTime raised $207mn from Saudis to develop Artificial Intelligence solutions in the Middle East.

Chinese autonomous driving group Pony.ai raised US $100mn from the Neom Investment Fund to establish regional research and development and manufacturing headquarters in the country. 

Alibaba Cloud has a joint venture with the Saudi Telecom Group, which also  partnered with Huawei on 5G projects.

King Abdullah University of Science and Technology released AceGPT, a large Arabic-focused language model built in collaboration with the Chinese.

SMIC (Semiconductor Manufacturing International Corporation of China) expands chip production lines to produce Huawei-designed smartphone processors in the 5-7 Nanometer range

SMIC is using its existing US and Dutch equipment stock to produce more miniaturized 5-7nanometre chips for new versions of premium smartphones.

Last year, Huawei surprised the industry and analysts with its advances when its Mate 60 Pro premium smartphone launched in 2023, featured a 7nm processor.

In the future, Huawei’s most powerful artificial intelligence processor, the Ascend 920, will also be produced at 5nm by SMIC, narrowing the gap between China’s alternative AI chips and Nvidia’s GPU.

Western nations need a plan for when China floods the chip market

Chief executive of Semiconductor Manufacturing International Corporation, China’s leading chipmaker, predicted a “global supply glut” in the types of semiconductors his company produces. Simultaneously, he announced a $7.5bn increase in capital expenditure.

The country’s chip production capacity will double over the next five years. Much of this production will be of foundational processor chips widely used in cars, household goods, and consumer devices.

The Chinese chips could threaten the likes of NXP, ST Micro, TI etc. Intelligence agencies already worry about malicious insertions and compromised chips.

VIETNAM

Vietnam dangles semiconductor incentives to draw foreign companies

Universities in Vietnam are unveiling semiconductor classes with employers such as Samsung. Vietnam aims to train 50,000 engineers for the industry by 2030.

Vietnam has pledged tax breaks and other perks to semiconductor companies. Hanoi’s national plan includes industry grants through a science fund and joint state research with private tech companies such as FPT.

Companies like Nvidia, Marvell, and Samsung want to expand their chip businesses in Vietnam. They are expected to receive millions of dollars from the US Chips and Science Act and already host Intel’s biggest global test and assembly factory.

Top American chip design software maker Synopsys is establishing a 600-person R&D team there.

Nikkei reported that Apple, for the first time, was shifting engineering resources to Vietnam for product development of the iPad.

Infineon aims to significantly expand the workforce at its new Vietnam office to “multiple hundreds” of engineers as per it’s CEO.