Semiconductor market news from DPE- February 21 to February 27

1. Chipmakers Downplay Fears Ukraine Crisis Will Worsen Shortages

With the semiconductor industry stretched thin by the pandemic and an unprecedented surge in demand, chipmakers had a reassuring message Thursday: The crisis in Ukraine is unlikely to make shortages worse.

Russia is a small market for the chip industry and its invasion of Ukraine doesn’t represent a threat to chip supply, the Semiconductor Industry Association said Thursday. U.S. and allied sanctions against Russia also are unlikely to have a significant effect on industry sales, the group said.

“While the impact of the new rules to Russia could be significant, Russia is not a significant direct consumer of semiconductors, accounting for less than 0.1% of global chip purchases,” SIA Chief Executive Officer John Neuffer said in a statement. “In addition, the semiconductor industry has a diverse set of suppliers of key materials and gases, so we do not believe there are immediate supply disruption risks related to Russia and Ukraine.”

Ukraine’s status as a major producer of neon has sparked concerns because the gas is used in semiconductor manufacturing. But chip companies, which were alerted to this possible chokepoint in 2014 when Russia annexed Crimea, have diversified their suppliers since then.

Some individual companies also issued statements aimed at calming customers.

“We do not anticipate any impact on our supply chain,” Intel said. “Our strategy of having a diverse, global supply chain minimizes our risk of potential local interruptions.”

GlobalFoundries Inc., the U.S.’s largest provider of outsourced chipmaking, said having plants around the world -- with their own local suppliers -- helps mitigate risk. The company has factories in upstate New York, Singapore, and Dresden, Germany.

“At GlobalFoundries, we do not anticipate a direct risk,” the company said in a statement. “We are not totally immune to global shortages, but our footprint provides us with more insulation.”

2. UMC's Hejian subsidiary resumes production after COVID-19 worries subside

Taiwan-based contract chipmaker United Microelectronics Corp. (UMC) announced lats Thursday that operations at its subsidiary in Suzhou, China had fully resumed after worries over a cluster infection there subsided.

In a statement, UMC said operations had immediately resumed at the Chinese subsidiary run by HeJian Technology (Suzhou) Co. following the approval of Chinese authorities.

Authorities granted the subsidiary permission to resume full operations after several rounds of mass PCR testing showed that no other workers had been infected by an employee who was confirmed as having COVID-19 earlier in the month.

The Suzhou plant suspended 8-inch wafer production on Feb. 14 following the infection to assist with the local authorities' blanket screening of all workers for COVID-19.

On Feb. 14, UMC said it remained upbeat about its first-quarter sales despite the incident, given that HeJian's monthly production value only accounted for around 5 percent of the company's total revenue.

3. Computer chip industry begins halting deliveries to Russia in response to U.S. sanctions

As the situation in Russia and Ukraine continues to ferment, the United States has put pressure on sanctions, and major chip manufacturers such as TSMC and Intel have responded to support and will stop supplying to Russia.

The Biden administration announced the sanctions Thursday, saying they would cut off more than half of Russia’s high-tech imports and kneecap the country’s ability to diversify its economy and support its military.

The ban, which is also being enacted by major U.S. allies, is designed to choke off deliveries to defense and other high-tech buyers in the aerospace and maritime technology sectors, but not to block deliveries of consumer electronics, the Biden administration said.

TSMC has suspended all sales to Russia and to third parties known to supply products to Russia while it sorts through the sanctions rules to ensure it fully complies, according to a person familiar with the company’s business, who spoke on the condition of anonymity to discuss sensitive matters.

In a statement, TSMC said it is “fully committed to complying with the new export control rules announced.”

GlobalFoundries, the chip manufacturer based in Malta, N.Y., said it also has begun complying with the rules. The company has a system to review and block any prohibited sales to Russia, said Karmi Leiman, the company’s head of global government affairs and trade, though he added that the size of the company’s sales to Russian buyers is “not material.”

4. The yield rate of the Snapdragon 8 Gen 1 chip produced by Samsung is only 35%

On February 22, it was reported that the management of Samsung Electronics decided to investigate the low yield rate of advanced process chips (5nm/4nm/3nm). The content includes whether there is any wrong information in the process yield report submitted in the past and whether the funds used to improve the yield rate of advanced processes have been effectively used.

From the 5nm of the Snapdragon 888 to the 4nm of the Snapdragon 8 mobile platform, Qualcomm has suffered greatly. In the past period of time, it has often been reported that Qualcomm hopes to redistribute orders for high-end Snapdragon chips to TSMC, and the yield problem is one of the main reasons.

According to The Elec, the current yield rate of the Snapdragon 8 Gen1 chip is only 35%, and the Exynos 2200 yield is even lower, which is very bad. It is said that the higher yield of the Snapdragon chip is due to the fact that Qualcomm has executives and technicians stationed in the Samsung wafer foundry, and the production is constantly revised. In contrast, TSMC’s N4 process yield exceeds 70%, which is enough to make Qualcomm excited even without considering performance and energy efficiency issues.

Due to Samsung’s long-standing yield problems in advanced technology, coupled with the resulting delayed delivery time, which led to a shortage of supply, forcing Qualcomm to prefer to pay extra to TSMC to add orders, rather than continue to wait for Samsung to ship. It was previously reported that Qualcomm hopes to launch a Plus version earlier this year to replace existing chips. It is to launch TSMC’s 4nm chips as soon as possible to get rid of supply and performance issues.

5. Semiconductor firm UMC to build new $6.8 billion wafer fab facility in Singapore

Taiwanese global semiconductor foundry United Microelectronics Corporation (UMC) said on last Thursday (Feb 24) that it plans to build a new advanced manufacturing facility in Singapore.

The new facility will be built next to its existing plant, known as Fab12i, in Pasir Ris.

The planned investment for this project will be US$5 billion (S$6.8 billion).

The new wafer fab facility will have a monthly capacity of 30,000 wafers, with production expected to start in late 2024.

It will also be one of the most advanced semiconductor foundries in Singapore, UMC said, and will produce 22 and 28 nanometre chips.

6. Nvidia hit by cyberattack so they hack the hackers as revenge

A recent report from The Telegraph has claimed that Nvidia recently suffered from a considerable cyber-attack, with hackers leaving part of Team Green’s business “completely compromised”. Further reports about the incident have revealed that a ransomware group called Lapsus$ admitted to having swiped over 1 TB of vital data from Nvidia, which included personal information about employees and even some details about RTX GPUs.

However, it appears the ransomware group has been attacked back by Nvidia, and the hackers took to airing their grievances publicly. The group published messages on its Telegram account, later shared by a threat analyst on Twitter, ironically calling out Nvidia as “criminals” and “scum” for attempting to install “ransomware” on the group’s machines. Lapsus$ further claims to have already backed up the stolen data elsewhere, making Nvidia’s successful encryption attempt a somewhat unrewarding exercise.

It has also been revealed that the group clearly isn’t on some sort of undisclosed moral crusade, as blackmail demands have emerged with Lapsus$ stating that it will not leak the company’s data as long as Nvidia pays a “fee”. The same group, which is supposedly based in South America, has been connected with other malicious hacks in the past, including one on a large Portuguese media conglomerate (Impresa) and one against the Parliament of Portugal.

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