DELIVERCHIP（HK）LIMITED — 25 November: This Week’s News

Highlights of the Week

1. ST partners with Huahong Semiconductor to produce 40nm MCU chips in China

2. Reports suggest Foxconn has secured a US$1.1 billion loan from 17 banks

3. SK Hynix begins mass production of the world’s tallest 321-layer NAND flash memory

4. Jensen Huang: Strong demand for AI, but ‘laws of physics’ limit growth of NVIDIA chips

ST partners with Huahong Semiconductor to produce 40nm MCU chips in China

The CEO of European computer chip manufacturer STMicroelectronics (ST) has announced a new partnership with Chinese foundry Huahong Semiconductor, stating that having local manufacturing facilities in China is crucial to the company’s competitive position.

STMicroelectronics CEO Jean-Marc Chery made these remarks at a time when Europe, the US and China are all calling for more local chip manufacturing, with many chip companies expanding in Singapore and Malaysia to serve the Asian market.

However, STMicroelectronics is the largest manufacturer of energy-efficient silicon carbide (SiC) chips for electric vehicles, with customers including Tesla and Geely. Jean-Marc Chery stated that the Chinese market itself is indispensable, as it is the largest and most innovative market for electric vehicles, and it is impossible to compete effectively from outside.

“If we cede our market share in China to another company operating in the industrial or automotive sectors, Chinese firms will dominate their own market,” he said. “Moreover, their domestic market is so vast that it will serve as an excellent platform for them to compete in other countries.”

Reports suggest Foxconn has secured a US$1.1 billion loan from 17 banks

According to media reports, sources familiar with the matter have revealed that Hon Hai has secured US$1.1 billion through a three-year loan, at a time when the company is seeking to capitalise on the surge in demand for AI servers.

The sources stated that 17 banks, including those in Taiwan and international institutions, provided the loan. Hon Hai’s Singapore-based subsidiaries – Foxconn Singapore, Falcon Precision Trading and ECMMS Precision Singapore – are the borrowers, whilst Hon Hai acts as the guarantor.

Previously, Foxconn Chairman Liu Yang-wei predicted that demand for artificial intelligence servers would surge and continue into next year. Cloud products are set to become a pillar of Foxconn’s growth by 2025, on a par with mobile phone sales.

It is reported that Foxconn’s third-quarter revenue stood at NT$1.85 trillion, representing a 20 per cent increase quarter-on-quarter and a 20 per cent increase year-on-year; net profit stood at NT$49.325 billion, a record high for the period, up 41 per cent quarter-on-quarter and 14 per cent year-on-year; third-quarter earnings per share (EPS) after tax were NT$3.55, compared with NT$2.53 in the second quarter and NT$3.11 in the same period last year. In terms of revenue breakdown, consumer electronics accounted for 45 per cent, cloud and networking for 32 per cent, computer hardware for 17 per cent, and components and other products for 6 per cent.

SK Hynix begins mass production of the world’s tallest 321-layer NAND flash memory

Seoul, South Korea, 21 November 2024 – SK Hynix announced on 21 November that it has commenced mass production of the world’s tallest 321-layer 1Tb (terabit) TLC (Triple Level Cell)* 4D NAND flash memory.

* NAND flash memory chips are categorised into different specifications—such as SLC (Single Level Cell, 1 bit), MLC (Multi Level Cell, 2 bits), TLC (Triple Level Cell, 3 bits), QLC (Quadruple Level Cell, 4 bits) and PLC (Penta Level Cell, 5 bits)—based on the amount of information (bits) that each cell can store. The greater the information storage capacity per cell, the more data that can be stored per unit area.

SK Hynix stated: “The company began mass production of the previous-generation 238-layer NAND flash memory—the highest-layer product at the time—in June 2023 and has been supplying it to the market. Now, we have taken the lead in launching NAND flash memory exceeding 300 layers, pushing the boundaries of technology. We plan to supply the 321-layer product to customers from the first half of next year to meet market demand.”

During the product development process, the company utilised the highly efficient ‘3-Plug*’ process technology to overcome stacking limitations. This technology involves a through-hole process carried out in three stages, followed by optimised post-processes to electrically connect the three through-holes. As part of this process, low-deformation* materials were developed and automatic alignment correction technology for through-holes was introduced. The company’s technical team also applied the development platform from the previous-generation 238-layer NAND flash to the 321-layer version, thereby minimising process changes and achieving a 59 per cent increase in production efficiency compared to the previous generation.

Jensen Huang: Strong Demand for AI, but ‘Laws of Physics’ Limit NVIDIA Chip Growth

NVIDIA’s revenue forecast on Wednesday (20 November) disappointed Wall Street, raising questions about whether the artificial intelligence (AI) boom is waning, but NVIDIA executives, analysts and investors have dismissed these concerns.

NVIDIA’s new flagship chip, Blackwell, is in fact composed of multiple chips that must be bonded together through a complex advanced packaging process. Although TSMC is working to expand capacity, packaging remains a bottleneck for NVIDIA and other chipmakers.

“Blackwell incorporates more advanced packaging from TSMC than previous chips, which adds to the challenge,” said Ben Bajarin, CEO and chief analyst at research firm Creative Strategies. He expects demand for Nvidia’s products to exceed its supply capacity throughout 2025.

Nvidia’s missteps have exacerbated these issues.

Design flaws in Blackwell forced Nvidia to carry out what are known as ‘mask changes’. CEO Jensen Huang stated that this flaw – which has now been rectified – reduced the yield rate of Blackwell chips.

“We are in the early stages of ramping up production, which always comes with opportunities for yield improvement,” Huang said on Wednesday. “We are scaling Blackwell production from zero to very high levels. By definition, the laws of physics dictate that the rate of yield improvement is limited.”

In the short term, the ramp-up is expected to put pressure on gross margins.

All news in this article is sourced from the internet.