Earnings, Introducing Semi Reports, the Great Geopolitical Divide Continues, AI demand shines 🔥 brightly

Nvidia Earnings loom large.

Hello Everyone,

This is an issue for the week(s) of April 25th and May 2nd, 2024.

This is one of my “new” Newsletters, and over 10+ now covering various aspects of emerging tech. Thanks for the support, I hope to learn along with you about these topics.

Support me doing this for as low as $1 a week.

• Welcome to the 9th edition of Semiconductor Things™, where I seek to break down some of the news in the Semiconductor, AI chips and datacenter space globally to make it more accessible and easy to follow.

• With the rise of Generative AI, Nvidia and TSMC and the geopolitical importance of Taiwan, this is now a major topic of me in my watching of the emerging tech space that I do as an analyst, writer, curators and news watcher.

• The Technology category is an underdog relative to Substack’s baseline audience, this means I’m an outlier here. To survive, I’m building 10+ Newsletters in “emerging tech” coverage. A pilot never seen before on Substack for a one-person team. Full disclosure, I may not make it.

• Importe note: I am not native to the Semi space, and it might take a while to get up to speed. So we’ll be effectively learning about these things together.

Analyzing and Curating News 🔔

I’m a news fanatic always analyzing the latest in exponential and emerging tech like robotics, semiconductors & AI chips, quantum, synthetic biology and other fields - as well as BigTech in AI.

When to Expect this Newsletter ⏰

This Newsletter will typically go out on Thursday at 7am Eastern Time. Posts are partially paywalled and paid subscriptions are cheap.

What? It will attempt to summarize some of the most important news in the semiconductor industry of the last week.

🔥 An Exciting Announcement - Semi Reports🐭

To afford to dive more deeply into the semiconductor industry, I have also now launched a new Semiconductor Newsletter that will do more in-depth deep dives (at a higher price point) on particular topics, unlike this Newsletter which is more of a periodic rundown of real-world events in the AI chip, semiconductor space and datacenter future of the world.

It’s still the beginning and concept stages though, so I won’t promote it again until it’s a bit more impressive:

Introducing Semiconductor Reports

Learn More.

• For rundowns: Semiconductor Things

• For deep dives: Semiconductor Reports

If we’re really going to understand the semiconductor industry and the incredible companies involved, Earnings (from the Stock Market, mostly U.S.) are going to be pretty important. Sit back, we have a lot of news to cover.

Semiconductor Bits & Bites 📱

I call Dan the Chip whisperer, crazy what you can notice when you are based out of Taiwan.

• We may be hitting a Bottleneck in Physics: 🌸 TSMC to 2-nanometers and Beyond. ‘‘Have we run into the fundamental limits of physics or will innovation prevail again?” “In the past, indeed, it probably took 2-3 years to get things done, but right now because technology is more and more challenging, it takes more time, sometimes 5-years or even 7-years,” said Mii. TSMC works side-by-side with customers like AMD to make sure design rules for new manufacturing processes meet client needs. TSMC starts work on next-generation processes years before they are in use. The formal collaboration process is called ‘DTCO’ or Design Technology Co-Optimization. (Can we keep shrinking transistors on chips?)

• SK Hynix CEO: HBM memory chips for delivery in 2025 are nearly sold out, while 2024 is fully booked, Reuters reports, adding Hynix will in May begin sending customers samples of its latest chips, 12-layer HBM3E, which will be mass produced from the 3rd quarter.

• Qualcomm said China’s Android smartphone market has picked up, with buyers focused on higher-priced models able to run AI chatbots, Reuters reports, adding Qualcomm’s sales to China handset makers grew 40% in the first half of its fiscal year, a sign of recovery in the market.

🎲 BigTech Earning Suggests High-Demand for Nvidia AI chips and Datacenter business

Four of the biggest tech companies in the world all reported very strong demand for AI applications, and that's great news for Nvidia NVDA 0.00%↑ . The chipmaker designs the leading GPUs for training the large language models powering new generative AI applications. It could see a big increase in business based.

In particular Microsoft, Meta, Tesla, Google and Amazon are likely to be buyers. Nvidia earnings are expected after the Bell on May 22nd, 2024.

Semiconductor Bits & Bites 📱

• South Korea will spend ₩206.8 billion won (US$150 million) over 7-years on R&D for advanced semiconductor packaging, including for HBM memory chips, media report, a project that passed its feasibility review on the first go, a rarity. As part of the review, officials reduced the budget from ₩500 billion originally. It will be announced later this year and begin next year.

• South Korea’s exports in April rose 13.8% to US$56.2 billion on robust demand for semiconductors, media report, noting it was the 7th straight month of growth. Semiconductor exports soared 56.1% year-on-year to $9.96 billion, on strong shipments of premium memory chips for servers, officials said.

• Samsung’s Earnings ✨ Shine: Samsung Electronics’ operating profit in the 1st quarter soared 10-fold as memory chip sales nearly doubled over the same time last year, Reuters reports, adding the South Korean giant expects AI demand to remain strong in the 2nd half, further driving memory chip sales. Read more.

• South Korea’s military is considering a ban on iPhones in all buildings due to increasing concerns over leaks of sensitive information via voice recordings, media report, noting the Air Force shot first by announcing a ban from June 1 on any device capable of voice recordings which do not permit 3rd party apps to control inherent functions, with “iPhones” specifically cited.

• TSMC is expanding advanced semiconductor packaging capacity at 3 locations amid strong AI-related demand for CoWoS, SoIC and SoW, media report, adding AMD was the 1st client for SoIC with the MI300, while Apple is now using SoIC for an Arm-based CPU for AI servers to be unveiled in 2nd half 2024.

Terminology

CoWoS: Chip on Wafer on Substrate

SoIC: System-on-Integrated Chips

SoW: System-on-Wafer

• TSMC affiliate, Vanguard (VIS), reported its lowest earnings per share in 6 years for the 1st quarter, NT$0.77, media report, but the chip foundry said market demand is recovering and forecast 2nd quarter (Q2) shipments will rise 17%-19% versus Q1 and sees Q2 gross margin 25% - 27%, topping 24% in Q1.

• Powertech, Taiwan’s 2nd biggest semiconductor packaging firm, raised its capex forecast to NT$15 billion (US$460 million) from NT$10 billion, as it develops advanced packaging for AI memory chips, called HBM (high bandwidth memory), media report, noting the capex figure includes group companies, such as Greatek.

Major Funding Round for Nvidia Backed CoreWeave