The Battle for AI Memory Chip Supremacy

In February, Samsung Electronics claimed in a press release it was first in the latest generation of high-end AI memory chips, called HBM (high bandwidth memory), specifically HBM3e 12H.

But reviewing the situation today, not only is Samsung not first, it’s last.

Thread: 1/18
$MU $SSNLF #Samsung #SKhynix #HBM #semiconductors #semiconductor 2/18 Samsung lags

Samsung appears to be around 6-months behind HBM market leader SK Hynix Inc., and at least 3-months behind Micron Technology, an unfamiliar position for the perennial memory chip leader.

Memory bandwidth is a key bottleneck in AI servers, and the answer is better HBM memory chips, which are technically difficult to make and therefore command higher prices. $MU $SSNLF #Samsung #SKhynix #HBM

Reuters: Israel's Mossad spy agency planted explosives inside 5,000 Taiwan-made pagers ordered by Lebanese group Hezbollah months before Tuesday's detonations, which killed 9 people and wounded nearly 3,000 others. The pagers were made by Taiwan's Gold Apollo and arrived in the spring. Gold Apollo said it did not make the pagers. reuters.com/world/middle-e… Gold Apollo’s founder said the pagers were made by a company in Europe that had the right to use the Taiwanese firm's brand, but did not name the firm. "We are a responsible company. This is very embarrassing," he said. reuters.com/world/middle-e…

Intel CEO announcement:
-Intel manufacturing operations to become independent subsidiary
-CEO clear that chip design and manufacturing stay together
-Intel will sell part of stake in Altera
-Intel taking steps to prioritize x86 CPU businesses
-Several divisions to be reorganized, including automotive and edge, photonics
Thread 1/3 $INTC $TSM $SSNLF #Samsung #semiconductors 2/3 Intel Cost Cutting:
-To cut costs $10 billion, slash 15,000 jobs by year end
-Delay Germany, Poland plants by 2-years
-Malaysia plant on hold until demand picks up
-No changes to US manufacturing expansion
-Intel to close 2/3s of global office locations

TSMC held its annual shareholders’ meeting on Tuesday, June 4.

Highlights from media reports. Thread: /9
$TSM $NVDA $AMD #semiconductors #semiconductor 1/9 New TSMC Chair and CEO C.C. Wei:

Q: Which company does TSMC like more and which is more important, Nvidia or AMD?

C.C. Wei: We have great relationships with both companies.

SK Hynix 1st Quarter (Q1) Takeaways
Revenue: ₩12.43 trillion won (US$9.35 billion) +144% year-on-year
Operating profit: ₩2.89 trillion versus loss ₩3.40 trillion last year
Net profit ₩1.92 trillion versus loss ₩2.59 trillion
Gross Margin 39% versus 20% in Q4
Thread 1/15 2/15 SK Hynix Q1
In the seasonally weak 1st quarter, revenue hit an all-time-high for the period, and 2nd highest operating profit.

Due mainly to a “clear rebound following a prolonged downturn” on increased sales of AI server products, including HBM (high bandwidth memory) chips

(SK Hynix is Nvidia’s main HBM chip supplier. HBM is the AI memory chip)

TSMC to 2-nanometers and Beyond

AMD CTO Mark Papermaster sat down with TSMC Co-COO Y.J. Mii to ask:

‘‘Have we run into the fundamental limits of physics or will innovation prevail again?”

(Can we keep shrinking transistors on chips?)

Thread 1/10 $TSM $AMD #semiconductors 2/10 TSMC’s Mii: Developing manufacturing processes in the 2nm and beyond age takes longer.

“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’s net profit rose 8.9% year-on-year to NT$225.5 billion (US$7.17 billion) in the 1st quarter

Beat consensus' NT$217.2 billion (US$6.71 billion)

Revenue fell 3.8% to US$18.87 billion, but beat guidance.

Thread 1/x $TSM #semiconductors #semiconductor
investor.tsmc.com/english/quarte… 2/x TSMC 1st quarter (Q1) earnings

TSMC’s revenue fell during the weak season for smartphone sales, but strong demand for chips used in high performance computing provided a boost

Gross margin was 53.1%, versus guidance 52-54%

Operating margin was 42%, vs guide 40-42%

TSMC’s 4th quarter investors' conference was a treasure trove of information about the company and its prospects for 2024.

Key takeaways: 1/15 $TSM #semiconductors #semiconductor 2/15 AI opportunity

Through 2027, TSMC will see a “high teens” percent of revenue “from a very narrowly defined” AI application processor. - CEO

The yearly growth rate (CAGR) of AI at TSMC is about 50% “and we are confident that we can capture more opportunities in the future."
$TSM #semiconductors

In 2023, TSMC became the world’s biggest #semiconductor maker by revenue, topping Intel and Samsung Electronics for the 1st time.

2023 Revenue in US dollars
TSMC: $69.30 billion
Intel: $54.23 billion
Samsung (chip division): $50.99 billion
Thread 1/9 $TSM $INTC #Samsung 2/9 TSMC is the first newcomer to the top spot since Samsung toppled Intel in 2017.

Intel had been No. 1 for decades – since 1992 when it bested Japan’s NEC Corp.

$TSM $INTC #Samsung #semiconductors #semiconductor

Apple Silicon and TSMC - Thread 1/11
Apple Silicon lead Johny Srouji, and John Ternus, senior VP hardware engineering, talked about the marriage of hardware, Silicon, software, and TSMC during a CNBC interview.
$AAPL $TSM #semiconductors #semiconductor 2/11 Ternus:
“We’ve always had an incredible design team and we made these beautiful products, but they were constrained by what was available. And I think one of the most – if not the most – profound change at Apple, certainly in our products over the last 20-years, is how we now do so many of those technologies in house, and you know, top of the list of course is Silicon…”

Nvidia received a stern warning from US Commerce Secretary Raimondo on China export controls, media report:
“If you redesign a chip around a particular cut line that enables them to do AI, I’m going to control it the very next day,” she said, in a speech. 1/3 $NVDA #semiconductors 2/2 She urged Silicon Valley executives, US allies, others, to stop China from getting semiconductors and cutting-edge technologies vital to US national security, calling Beijing "the biggest threat we've ever had" and stressed "China is not our friend".

TSMC 2nd Quarter Earnings

Revenue -13.7% year-on-year to US$15.68 billion, at high end of guidance: US$15.2-$16 billion

NT$ Revenue NT$480.84 bln, market expected NT$476.2 bln

Gross Margin 54.1% vs guidance 52%-54%

Operating Margin 42% vs guide 39.5%-41.5%

Net Profit -23.3%… twitter.com/i/web/status/1… 2/x TSMC 2nd Quarter (Q2) $TSM

Q2 wafer shipments fell 9.6% to 2.916 million wafers from 3.227 million in the 1st quarter (Q1).

$TSM #semiconductors

KLA Corp. #semiconductor equipment maker.
Dec. quarter earnings:
Revenue US$2.98 billion vs analysts estimated $2.81 bln
Net Profit $978.8 bln
EPS (Adjusted): $7.38 vs estimated $7.01
2022 Revenue +28% to $10.5 bln
Free Cash Flow +18% to $3 bln
Inventories $2.535 bln
$KLAC 1/8 2/8 KLA Outlook
Calendar year 2023 “will be a year of contraction after 3 strong years of growth,” as industry spending slows due to rising macroeconomic concerns, KLA said.
-WFE (wafer fab equipment) demand seen -20% from 2022’s $94-$95 billion (to around $75 billion) $KLAC

“The US government's new restrictions on sales of equipment, parts, and services for specific technologies and customers in China are further impacting equipment demand in a declining market,” said Tim Archer, CEO of US chip equipment giant Lam Research. 1/4 $LRCX #semiconductor 2/4 Lam forecast the China export restrictions would cost US$2 billion to $2.5 billion in sales in 2023, ¾ on the system side and ¼ on the services side of its business. $LRCX #semiconductor

ASML 4th quarter 2022 beat analysts’ estimates
Net sales €6.4 billion vs estimate €6.38 billion
Gross margin 51.5% vs 54.2% in Q4 2021
Operating margin 33.0% vs 40.7%
Net profit €1.82 bln vs estimate €1.7 bln
EPS €4.60
Accelerated "fast shipments on DUV" in Q4
1/15 $ASML 2/15 Taiwan continued to be the main buyer of ASML systems in the 4th quarter.
ASML net system sales €4.748 billion in the 4th quarter versus €4.255 billion in the 3rd quarter $TSM $ASML

ASML CEO Peter Wennink expects a political decision on semiconductor technology exports to China that the U.S. deems sensitive “sooner rather than later” due to “time pressure,” he said in a media Q&A ahead of ASML’s 4th quarter earnings call. 1/3 $ASML #China #semiconductor 2/3 In a statement, he said “The facts are that nothing really changed since the October regulations that came out of the United States. Which actually means that we will not ship EUV to China for instance. But we can still ship DUV and metrology and inspection tools.” $ASML

TSMC 4th quarter (Q4) earnings News roundup

Most of the information can be found in this thread from yesterday:

https://twitter.com/dnystedt/status/1613447817321943040

But media added some nice info and I missed a few key items.
1/8 2/8 TSMC Q4
$TSM US-listed shares closed +6.4% at $87
-4Q gross margin (GM) 62.2% beat analysts’ estimates 60.1%
4Q22 operating margin (OM) 52%, beat estimated 50%
Net profit NT$295.9 bln beat estimated NT$287.8 bln
EPS NT$11.41
Quarterly record highs: GM, OM, net profit, EPS

TSMC 4th Quarter Earnings Jan. 12

Net Revenue +26.7% year-on-year to US$19.93 billion, at low-end of $19.9-$20.7 billion guidance

Net Revenue (NT$) +42.8% to NT$625.53 billion
Net Profit +78% to NT$295.9 billion
GM 62.2% vs guide 59.5-61.5
OM 52% vs guide 49-51
$TSM Thread 1/x 2/x TSMC 4th Quarter (Q4) $TSM

Q4 wafer shipments fell 6.8% to 3.702 million wafers from 3.974 million in the 3rd quarter.

ASML CEO Peter Wennink pushed back against new U.S. export rules on China, saying his company has already sacrificed enough and the new rules are unnecessary, media report. ASML has been restricted from selling its most advanced machines (EUV) to China since 2019 - 1/3 $ASML 2/3 $ASML
and U.S. rivals benefit by selling alternative technology, he reportedly said, adding "it is common knowledge that chip technology for purely military applications is usually 10, 15 years old. (Yet) the technology used to make such chips can still be sold to China."

TSMC Arizona has turned into a Chinese Communist Party (CCP, China) talking point, with scary stories daily.

Example:
“The U.S. is turning TSMC (Taiwan Semiconductor Manufacturing Co) into ASMC (American SMC)," and no Taiwan politician dares say no to the U.S.

Thread 1/9 $TSM 2/9
It looks like a CCP effort to hurt U.S.-Taiwan relations.

What’s most disappointing is the lack of creativity – the perpetrators clearly know little about the semiconductor industry.
#semiconductor $TSM

TSMC 3rd Quarter Earnings Call Extras

-N7 weakness impact on Kaohsiung project
-N3, N3E and N2 details
-TSMC CEO on scaling
-Inventories at 25-year high?
-Overseas fab projects
-Final financials

1/11 Thread $TSM #semiconductors 2/11 N7 and Kaohsiung fab
N7, N6 capacity utilization in Q4 and 1st half 2023 will be down due to weakness in smartphones, PCs and product delays by customers.

Kaohsiung fab plan impacted:
2 fabs planned initially for Kaohsiung, 28nm and N7, “but N7 has been adjusted.”-CEO
$TSM