Rising wafer prices lift chip foundry revenues

In yet another sign of how fortunes have changed in the semiconductor industry, Taiwanese foundry giant TSMC is expected to surpass Intel in quarterly revenue for the first time.

Wall Street analysts estimate TSMC will grow second-quarter revenue 43 percent quarter-over-quarter to $18.1 billion. Intel, on the other hand, is expected to see sales decline 2 percent sequentially to $17.98 billion in the same period, according to estimates collected by Yahoo Finance.

The potential for TSMC to surpass Intel in quarterly revenue is indicative of how demand has grown for contract chip manufacturing, fueled by companies like Qualcomm, Nvidia, AMD, and Apple who design their own chips and outsource manufacturing to foundries like TSMC.

Samsung has started production of chips using its 3nm fabrication process, beating rival TSMC, which expects to begin making chips with its N3 node generation later this year.

The resultant chips are claimed to reduce power consumption by up to 45 percent and improve performance by up to 23 percent, with further gains promised in a second generation of the process.

Korea's electronics giant said it has started initial production with its 3nm process node, which introduces what the firm calls Multi-Bridge-Channel FET (MBCFET) technology. This is Samsung's version of the Gate-All-Around (GAA) transistor architecture, where the gate material wraps around the conducting channel.

Intel has found a new way to voice its displeasure over Congress' inability to pass $52 billion in subsidies to expand US semiconductor manufacturing: withholding a planned groundbreaking ceremony for its $20 billion fab mega-site in Ohio that stands to benefit from the federal funding.

The Wall Street Journal reported that Intel was tentatively scheduled to hold a groundbreaking ceremony for the Ohio manufacturing site with state and federal bigwigs on July 22. But, in an email seen by the newspaper, the x86 giant told officials Wednesday it was indefinitely delaying the festivities "due in part to uncertainty around" the stalled Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act.

That proposed law authorizes the aforementioned subsidies for Intel and others, and so its delay is holding back funding for the chipmakers.

The demand for consumer electronics has slowed down in the face of inflation – but that didn't stop nine of the world's 10 largest contract chip manufacturers from growing in the first three months of the year.

That's according to Taiwanese research firm TrendForce, which said on Monday the collective revenues for the top 10 chip foundries grew 8.2 percent to $31.96 billion in the first quarter of 2022 from the previous quarter. That's a hair slower than the 8.3 percent quarterly growth reported for the top-ten foundries in the fourth quarter of last year.

On a broader level, TrendForce said this revenue growth came from a mix of "robust wafer production" and foundries continuing to raise the prices of wafers as a result of high demand.

Comment How serious is Intel about delaying the build-out of its planned $20 billion mega-fab site in Ohio?

It turns out very serious, as Intel CEO Pat Gelsinger made clear on Tuesday, less than a week after his x86 giant delayed the groundbreaking ceremony for the Ohio site to show its displeasure over Congress' inability to pass $52 billion in subsidies to fund American semiconductor manufacturing.

In comments at the Aspen Ideas Festival yesterday, Gelsinger warned Intel would prioritize building factories in Europe over the US if Congress fails to act on the long-stalled chip subsidies bill.

As Intel gets ready to build fabs in Arizona and Ohio, the x86 giant is planning to offload a 149-acre historic research and development site in Massachusetts that was once home to the company's only chip manufacturing plant in New England.

An Intel spokesperson confirmed on Wednesday to The Register it plans to sell the property. The company expects to transfer the site to a new owner, a real-estate developer, next summer, whereupon it'll be torn down completely.

The site is located at 75 Reed Rd in Hudson, Massachusetts, between Boston and Worcester. It has been home to more than 800 R&D employees, according to Intel. The spokesperson told us the US giant will move its Hudson employees to a facility it's leasing in Harvard, Massachusetts, about 13 miles away.

Taiwan's GlobalWafers announced on Monday a new use for the $5 billion it first earmarked for a purchase of Germany's Siltronics: building a 300-millimeter semiconductor wafer plant in the US state of Texas.

Construction on the facility – which will eventually span 3.2 million square feet – is expected to commence later this year, with chip production commencing by 2025. The plant will sit in the city of Sherman, near the Texas-Oklahoma border, where it is slated to bring in 1,500 jobs as production climbs towards 1.2 million wafers per month.

GlobalWafers is the world's third largest producer of silicon wafers and Sherman is already home to its subsidiary, GlobiTech.

Intel is claiming a significant advancement in its photonics research with an eight-wavelength laser array that is integrated on a silicon wafer, marking another step on the road to on-chip optical interconnects.

This development from Intel Labs will enable the production of an optical source with the required performance for future high-volume applications, the chip giant claimed. These include co-packaged optics, where the optical components are combined in the same chip package as other components such as network switch silicon, and optical interconnects between processors.

According to Intel Labs, its demonstration laser array was built using the company's "300-millimetre silicon photonics manufacturing process," which is already used to make optical transceivers, paving the way for high-volume manufacturing in future. The eight-wavelength array uses distributed feedback (DFB) laser diodes, which apparently refers to the use of a periodically structured element or diffraction grating inside the laser to generate a single frequency output.

Taiwan's state-owned energy company is looking to raise prices for industrial users, a move likely to impact chipmakers such as TSMC, which may well have a knock-on effect on the semiconductor supply chain.

According to Bloomberg, the Taiwan Power Company, which produces electricity for the island nation, has proposed increasing electricity costs by 15 percent for industrial users, the first increase in four years.

The power company has itself been hit by the rising costs of fuel, including the imported coal and natural gas it uses to generate electricity. At the same time, the country is experiencing record demand for power because of increasing industrial requirements and because of high temperatures driving the use of air conditioning, as reported by the local Taipei Times.

By now, you likely know the story: Intel made major manufacturing missteps over the past several years, giving rivals like AMD a major advantage, and now the x86 giant is in the midst of an ambitious five-year plan to regain its chip-making mojo.

This week, Intel is expected to detail just how it's going to make chips in the near future that are faster, less costly and more reliable from a manufacturing standpoint at the 2022 IEEE Symposium on VLSI Technology and Circuits, which begins on Monday. The Register and other media outlets were given a sneak peek in a briefing last week.

The details surround Intel 4, the manufacturing node previously known as the chipmaker's 7nm process. Intel plans to use the node for products entering the market next year, which includes the compute tiles for the Meteor Lake CPUs for PCs and the Granite Rapids server chips.