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SEMI, the international association representing the semiconductor equipment and materials industry and other parts of the electronics manufacturing and design chain, recently held two annual regional exhibitions and conferences: SEMICON China in Shanghai and SEMICON West in San Francisco.
Judging from the large number of exhibitors and wide range of technologies presented at the events, it is obvious that the global semiconductor industry is endeavoring to maintain cohesion despite the interference and interventions of tech war-agitating politicians.
SEMICON China 2023 was held at the Shanghai New International Expo Center from June 29 to July 1, attracting a record 1,100 exhibitors from China, Japan, Korea, Europe and the US.
Related forums discussed integrated circuit (IC) manufacturing technology and supply chain issues, automotive IC design, power and compound semiconductors, carbon neutrality and sustainability, and workforce development.
It was the largest of the regional SEMI exhibitions, which in the words of its sponsor was “a key enabler of collaboration and innovation across the entire electronics supply chain including chip design, manufacturing, assembly and test, equipment and materials.”
The exhibition was preceded by the China Semiconductor Technology International Conference (CSTIC), organized by SEMI and the Institute of Electrical and Electronics Engineers (IEEE) together with the Institute of Microelectronics, Chinese Academy of Sciences.
It was held on June 26 and 27 in Shanghai and virtually from June 29 to July 26 at SEMI Cloud.
The conference featured symposiums covering manufacturing processes, systems integration, materials, equipment, device and circuit design, and emerging semiconductor technologies.
Topics such as artificial intelligence, 6G, neuromorphic computing, advanced memory, 3D integration and Micro Electro Mechanical Systems (MEMS) were also addressed.
Sponsors included Advanced Micro-Fabrication Equipment (AMEC), Naura and Anji from China; Tokyo Electron and Fujifilm from Japan; ASM, Edwards and Zeiss from Europe; Applied Materials, Lam Research and KLA from the US; and ACM Research, which was founded in California but now conducts most of its product development, manufacturing and service activities through its subsidiary in Shanghai.
ACM Research owns an extensive patent portfolio in deposition and photoresist processing, single wafer and batch wet cleaning, electroplating, stress-free polishing, wafer manufacturing and packaging. It remains active in North America and also has operations in Europe, South Korea and elsewhere in Asia.
ACM Research’s example shows how difficult actual decoupling might be and how much semiconductor-related technology is already available in China.
AMEC makes etch and deposition equipment. It has gained traction both in China and overseas, notably with Taiwan’s TSMC, the world’s largest chip producer. AMEC recently won a legal battle in a Shanghai court against Lam Research, which had accused it of infringing on its etch-related patents.
The diversified Naura Technology Group makes etch, deposition, oxidation/diffusion, cleaning, annealing and other types of semiconductor production equipment.
Preliminary figures from AMEC and Naura indicate that their profits more than doubled year-on-year in the six months to June on sales growth of nearly 30% for AMEC and more than 60% for Naura.
This performance is attributed to US sanctions, which have led Chinese semiconductor makers to turn to domestic equipment makers.
Anji Microelectronics manufactures chemical mechanical polishing (CMP) slurries, post-CMP and post-etch cleaning solutions, photoresist strippers and other wet chemicals and additives used in the semiconductor manufacturing process.
SEMICON West 2023, North America’s most prominent microelectronics exhibition and conference, was held from July 11 to 13 at the Moscone Center in San Francisco.
Its overarching themes were supply chain disruptions, climate change and sustainability, and talent shortages – issues key to the long-term growth of the semiconductor industry.
Government investment in chip manufacturing, smart manufacturing with data and AI, heterogeneous design and integration using advanced packaging technology, smart mobility, smart medtech and other topics were also addressed.
Advanced packaging received particular attention from Interuniversity Microelectronics Centre (imec), Applied Materials and others.
Cerebras Systems of Sunnyvale, California, won the 2023 SEMI Award for North America for process and technology integration for developing the world’s largest integrated circuit chip for complex artificial intelligence (AI) computation applications training with very large AI databases.
As reported in the daily SEMICON digest on July 12, Cerebras, “implemented wafer-scale integration with advanced packaging and system design for AI and other deep-learning applications as standalone units and in clusters for large-scale data centers.”
The Design Automation Conference (DAC) 2023, which ran from July 9 to 13, was held across the street from SEMICON West. DAC exhibitors and participants covered electronic design automation, artificial intelligence and machine learning, embedded systems and software, automotive applications, RISC-V, and intellectual property and data security issues. Both events were crowded, with attendance reaching pre-Covid levels.
SEMI also released its mid-year semiconductor equipment forecast at SEMICON West, predicting an 18.6% decline in total sales of wafer fab, assembly & packaging, and test equipment to US$87.4 billion in calendar 2023, followed by a 14.4% rebound to an even $100 billion in 2024.
Forecasting a big round number would seem to indicate a fair amount of uncertainty, but SEMI is not alone in this regard.
SEMI did not publish a forecast for 2025, but its president and CEO, Ajit Manocha, said “Projections for robust long-term growth driven by high-performance computing and ubiquitous connectivity remain intact.”
Manocha, formerly CEO at GlobalFoundries, added that “Despite current headwinds, the semiconductor equipment market is set to see a strong rebound in 2024 after an adjustment in 2023 following a historic multi-year run.”
Sales of wafer fab equipment – including wafer processing, clean room and other facilities and mask/reticle equipment – are forecast to drop 18.8% to $76.4 billion in 2023 and then rebound by 14.8% in 2024, accounting for a fairly steady 87-88% of the total.
Sales of assembly & packaging equipment are expected to be more volatile and sales of test equipment less so, but they have a relatively small impact on the overall trend in capital spending.
The cycle is being driven by memory chips. Equipment sales to makers of NAND flash memory are forecast to drop by 51% to $84 billion this year and then rebound by 59% to $13.3 billion in 2024.
DRAM equipment sales, meanwhile, are forecast to drop by 28% to $8.8 billion this year and rebound by 31% to $11.6 billion in 2024.
Logic IC and foundry related demand is much more stable. It is forecast to decline by 6% to $50.1 billion this year and then rise by 3% to $51.6 billion in 2024.
China, Taiwan and South Korea remain the three largest markets for semiconductor equipment. SEMI expects Taiwan to take the lead this year and China to regain it in 2024.
The Semiconductor Equipment Association of Japan (SEAJ) has cut its sales forecast for fiscal 2023 (ends March 2024) from -5% to -23%.
The downturn has turned out to be more severe than the SEAJ had originally anticipated and reality has set in as fantasies about the metaverse and a quick rebound in PC and smartphone sales have faded.
Tokyo Electron, Japan’s leading semiconductor production equipment maker, had been touting a concept called MAGIC (metaverse, autonomous vehicles, green energy, IoT & information, and communications).
Now, CEO Toshiki Kawai, who is also chairman of the SEAJ, says the recovery of memory demand has been slower than initially expected.
Meanwhile, Samsung’s DRAM production is at a two-year low and, according to reports from South Korea, is likely to remain subdued for the rest of this year, with capacity expansion pushed out until there are clear signs of recovery in demand.
The SEAJ now expects semiconductor capital spending to come roaring back stronger than ever in fiscal 2024 and 2025, with rises in sales of Japanese equipment of 30% next year and 10% the year after catapulting the industry to new record highs.
It its view, the metaverse has been replaced by ChatGPT, electric vehicle and renewable energy demand remains strong, and a smart phone replacement cycle appears to have begun.
A forecast must be made, but that doesn’t mean it will turn out to be correct. A year ago, the SEAJ forecast 3.7% sales growth for fiscal 2023.
And it remains to be seen how sanctions on China and China’s retaliatory restrictions on exports of the niche chip-making metals gallium and germanium might drag down sales over the coming year.
Follow this writer on Twitter: @ScottFo83517667
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Europe’s ST Microelectronics has launched new high-performance gallium nitride (GaN) power devices while Japan’s Rohm plans to buy an old factory in Kyushu and convert it into its largest silicon carbide (SiC) power device production base. Rohm has also started mass production of GaN devices.
China’s recently announced controls on exports of chip-making niche metal gallium should not be a problem for either STMicro or Rohm. But they may become an issue if strident European and Japanese politicians sustain their anti-China rhetoric.
On July 13, STMicro announced that it has begun volume production of GaN high-electron-mobility transistors (HEMT) for use in wall adapters, chargers, lighting systems, industrial power supplies, renewable energy and automotive electrification applications.
The new products deliver better energy efficiency and enable more compact system designs. GaN is touted as third-generation power device material, following first-generation silicon and second-generation SiC.
In addition to producing GaN devices at its factory in Tours, STMicro has them made by TSMC in Taiwan. It began working on the industrialization of GaN in 2018, in cooperation with French research institute CEA-Leti.
SiC is now fast replacing silicon in a massive industry-wide ramp-up of production. Compared with silicon, silicon carbide offers greater energy efficiency and reliability, including resistance to higher voltages, longer device lifetimes and tolerance of a wider range of temperatures and vibration levels.
GaN improves on these advantages but so far lacks economies of scale and may be subject to supply constraints. Starting August 1, Chinese companies wishing to export gallium products will need prior government approval. According to a study by the EU issued earlier this year, China supplies 94% of the world’s gallium.
But the Chinese government has reason to look favorably upon STMicro. In June, the European company and China’s Sanan Optoelectronics announced a joint venture to produce SiC power devices in Chongqing using wafers made by Sanan Optoelectronics. The devices will be supplied to STMicro to meet growing demand from customers in China.
On July 12, Rohm announced that it had agreed to acquire Solar Frontier’s Kunitomi factory in Miyazaki:
Solar Frontier is a Japanese maker of solar panels owned by Idemitsu, a major Japanese oil company. The acquisition is scheduled to be completed in October. Rohm aims to start production of SiC power devices there at the end of 2024.
The 230,000 square meter factory equipped with clean rooms is large enough to cover Rohm’s anticipated production volume through 2030. It will be Rohm’s fourth SiC factory on the island of Kyushu. One of the others is also situated in Miyazaki and two others are in Fukuoka.
Rohm began production of SiC power devices in 2010 but did not launch its drive to become an industry leader until more than a decade later. The company is now targeting a 6.5-times increase in production capacity from 2021 to 2025.
With full use of the Kunitomi factory, it is aiming for a 35-times increase by the end of the decade. Production is also being shifted from 6-inch (150mm) to 8-inch (200mm) wafers.
In Japan, Rohm has developed SiC power semiconductors, sensors and other devices for use in Hitachi Astemo’s inverters and in e-Axle modules developed in a joint venture with Mazda Motor and Imasen Electric Industrial. Applications include engine control, powertrain, ADAS and navigation.
In China, Rohm has formed partnerships with BASiC Semiconductor of Shenzhen to supply power modules and Nanjing SemiDrive Technology to develop and produce devices for vehicle cockpit applications.
Rohm’s sales to China have overtaken its sales to North America and are forecast to account for nearly 15% of total sales this fiscal year. Given the trends in the auto industry, the importance of the China market for Rohm will almost certainly continue to grow.
In Germany, Rohm’s SiC devices have been qualified for use in Semikron’s power modules and will be supplied to Vitesco Technologies, a maker of electrified vehicle drive systems, under a recently signed long-term agreement.
Rohm began working on GaN power devices in cooperation with GaN Systems of Canada in 2018. In May 2023, it announced the start of mass production of HEMT devices similar to those made by STMicro.
These products were developed together with Ancora of Taiwan, an affiliate of power management specialist Delta Electronics. Ancora was established in 2022 to focus on the development of GaN devices.
Rohm appears likely to become a minority shareholder of Toshiba in the buyout by Japan Industrial Partners that was accepted by Toshiba management in March and recommended to shareholders in June.
This should give Rohm access to Toshiba’s power semiconductor technology, particularly as it relates to electric power generation equipment and other heavy electric machinery.
Toshiba’s heavy electrical competitors Mitsubishi Electric and Fuji Electric are also expanding production of SiC power devices.
In March, Mitsubishi Electric announced plans for a five-times increase in capacity by 2026 enabled by the conversion of an obsolete liquid crystal display factory in Kyushu, the expansion of another factory and the construction of a new assembly and packaging facility, also in Kyushu.
Processing of 200mm SiC wafers will be introduced while 150mm wafer production continues to increase. Fuji Electric also plans to build a 200mm SiC wafer line.
Mitsubishi Electric is also increasing output of power semiconductors on standard silicon wafers, with plans to begin mass production using 300mm (12-inch) wafers at its new factory in Hiroshima in 2024.
Explosive growth in output of power semiconductors continues as memory and logic ICs for computing slog through a long and severe cyclical downturn.
Follow this writer on Twitter: @ScottFo83517667
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In 2023, the EU Parliament debated the Artificial Intelligence (AI) Act, China publicly commented on draft generative AI rules and US industry leaders — including OpenAI CEO Sam Altman — called for robust AI regulation.
The European Union, China and the United States may set the benchmarks for AI governance but Asia’s middle powers could shape a regulatory framework that benefits them. Asia’s middle powers should coordinate their efforts through an AI governance center of excellence.
Given the speed of technological change in AI and the strategic significance of the digital economy to intra-regional trade in Asia, the exchange of regulatory best practices and challenges among countries in the region is critical to formulating beneficial AI regulations.
Multilateral agreements — including the Regional Comprehensive Economic Partnership and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership — include provisions on e-commerce, data transfer and cybersecurity issues.
But the gap in AI governance underscores the need for an AI governance forum within a framework of Asian digital governance.
There is little practical alignment on AI governance throughout Asia. According to Oxford Insights’ 2022 Government AI Readiness Index, Asia has both leaders and laggards in AI regulatory governance.
Singapore ranks at the top for AI governance based on benchmarks such as a national AI strategy, ethics principles and data privacy and cybersecurity laws. South Korea, Japan and Australia also score highly. But China, Taiwan, Malaysia, Thailand and Indonesia score lower, with the Philippines, New Zealand and Vietnam at even lower tiers.
Examining the state of play on AI governance for some Asian countries provides insight into the potential value of AI governance collaboration among Asia’s diverse economies.
Singapore has adopted an industry-friendly approach and is not yet pursuing comprehensive legislation. Singapore provides a practical AI ethics toolkit for industry.
In June 2023, Singapore’s privacy regulatory body, the Personal Data Protection Commission and the Infocomm Media Development Authority led efforts to incubate and launch AI Verify. AI Verify is an independent non-profit offering industry-driven evaluation and testing of explainable, transparent, fair and human-centric AI systems.
Australia’s Department of Industry, Science and Resources issued a discussion paper in June 2023 on safe and responsible AI, focusing on governance mechanisms to ensure AI is developed and used safely and responsibly.
The report highlights the constellation of regulations relevant to AI in Australia, including data protection and privacy, consumer protection, competition, copyright, online safety and discrimination laws.
Vietnam, though, provides a snapshot of where many Asian countries currently stand on AI regulation. Vietnam’s national AI strategy sets explicit numerical goals, including the number of AI centers and businesses to be established within a certain year. The strategy mandates the creation of AI laws and regulations by 2027. Yet no draft regulations are available publicly.
The AI governance efforts in Thailand and New Zealand highlight the questions that many Asian governments need to confront.
Thailand’s draft Royal Decree regulating AI raises concerns about the extraterritorial application of their domestic AI regulations. The Thai decree would require a global AI service provider to register or appoint a local representative in Thailand when providing services to Thai users.
New Zealand offers another perspective on AI regulation, with explicit mention of indigenous rights. Its Algorithm charter acknowledges questions on indigenous rights in AI, including Maori data sovereignty.
Asian regulatory trends are not entirely moving in a straight line, with some governments moving in different directions from previous policies.
In 2018, Japan amended its copyright laws to be friendlier to AI development, allowing a fair-use exception to copyright infringement for AI training data. But Japan’s Prime Minister Fumio Kishida recently suggested a review of such copyright issues at a meeting of Japan’s Strategic Council on Intellectual Property. A more restrictive regulatory stance may be coming.
Indian regulators have shown a change in attitude too. In April 2023, the Ministry of Electronics and Information Technology stated it did not intend to issue legislation. But in May 2023, India’s Minister of Electronics and Information Technology Ashwini Vaishnaw indicated that regulations will be coming.
Regional policymakers should initiate the process of coordination and sharing best practices sooner rather than later.
Initiatives in issue areas of privacy and data transfer offer a template, including the Asia-Pacific Economic Cooperation’s Cross-Border Privacy Rules or the World Economic Forum’s concept of Data Free Flow with Trust.
The OECD has staked out the AI regulatory issue and provides valuable resources for it globally — but by its design, discussions there may reinforce the digital divide. ASEAN has also indicated that it will develop an AI guide for its 10 member states.
A center of excellence bringing all aspects of AI governance discussion across Asia together in one forum would provide an opportunity to comprehensively examine and develop regulations in concert with, and complementary to, the domestic regulatory settings of each country.
AI regulation will form part of broader digital governance issues going beyond privacy, data protection, cybersecurity or intellectual property.
Building awareness, sharing best practices and forming consensus points for AI governance advocacy are essential to ensure the views of stakeholders outside the European Union, United States and China are represented in Asia and globally.
Seth Hays is a lawyer and Managing Director of APAC GATES, Taipei.
This article was originally published by East Asia Forum and is republished under a Creative Commons license.