India and Singapore have signed a Memorandum of Understanding (MoU) to enhance cooperation in the semiconductor sector, reinforce supply chains, and amplify Singaporean companies’ presence in India. This agreement was a highlight of Indian Prime Minister Narendra Modi’s visit to Singapore, marking his first since 2018. The partnership is designed to capitalize on the synergies between the two nations’ semiconductor industries, with Singapore being a significant player globally, contributing to 11% of the sector and producing 20% of the world’s semiconductor equipment.
India has placed a strategic emphasis on semiconductors, launching a $10 billion initiative to fortify its industry, with ambitions to expand its market to $63 billion by 2026. This move includes the recent approval of three semiconductor plants valued at over $15 billion, which will manufacture chips for critical industries such as defense, automotive, and telecommunications.
During Modi’s visit, he held discussions with Singapore’s Prime Minister Lawrence Wong and President Tharman Shanmugaratnam, leading to the signing of additional agreements that encompass digital technologies, education, skills development, and health, broadening the scope of bilateral collaboration beyond the semiconductor sector.
In Q2 2024, the top ten global semiconductor firms’ profits surged to $36.8 billion, a 2.4x year-on-year leap and a six-year high for the period. NVIDIA, bolstered by GPU demand, dominated with a 45% share of these profits. Memory makers for AI also prospered. Seven of these companies reported profit growth, with total sales up 33% to $158.7 billion. NVIDIA’s profits soared 2.7x to $16.5 billion, largely from data center sales, which jumped 2.5x. AMD, the second-largest AI chipmaker, saw a staggering 9.8x profit increase to $265 million, attributed to new AI semiconductor products, as noted by CEO Lisa Su.
At the India Semiconductor Expo, Tokyo Electron (TEL), a top Japanese semiconductor equipment maker, declared intentions to expand in India’s burgeoning semiconductor sector. TEL’s CEO, Toshiki Kawai, outlined plans to supply equipment and technical support, aiming to set up a full-scale delivery and after-sales system by 2026. He highlighted the need for expertise in manufacturing technologies in India’s emerging market and TEL’s strategic collaboration with Tata Electronics to support the establishment of a semiconductor manufacturing facility with UMC.
Kawai also addressed the importance of infrastructure, including utilities, worker safety, medical services, and housing for foreign staff, as crucial for the sector’s development. Initially, TEL will dispatch Japanese engineers for installation and services, transitioning to a local training and hiring system to accommodate future demand.
Kawai projected the global semiconductor market, driven by AI, autonomous driving, and IoT, to exceed $1 trillion by 2030, with quantum technologies, 6G, and 7G potentially pushing it to $5 trillion by 2050. This strategic foresight justifies TEL’s early investment in India’s promising market, reinforcing India’s role in the global semiconductor supply chain and bolstering its future industry with vital technological support and innovation.
Samsung Electronics has won a 2nm chip order from Ambarella for ADAS, marking a significant step in Samsung semiconductor industry expansion. The collaboration comes after Ambarella’s earlier announcement to utilize Samsung 5nm process technology. With Samsung targeting 2nm production by next year and commercial output by 2026-2027, this partnership could expedite its tech deployment, especially with Ambarella’s mass production goal set for 2026.
This development highlights Samsungs advancing chip manufacturing prowess, challenging TSMCs 62.3% global foundry market dominance while Samsung holds 11.5%. Although TSMC leads with advanced nodes and key clients like Apple, NVIDIA, Qualcomm, and AMD, Samsung continues to make strides in high-end chip production. Currently, Samsung manufactures for NVIDIA, AMD, and Intel but not at the cutting-edge nodes. It is also in advanced node testing collaboration with Qualcomm, aiming for future mass production.
On September 19, media reported that TSMC’s Fab 21 wafer fabrication plant in Arizona, USA, has initiated its first production line, currently trialing small batches of the A16 chip for the iPhone 14 Pro. Since its announcement in 2020, the plant has undergone four years of construction and is now operational, with mass production expected in the first half of 2025. The A16 chip utilizes the N4P process technology, an enhanced version of the 5-nanometer process.
Although the output from the Arizona plant may not match that of TSMC’s facilities in Taiwan, it holds significant importance for domestic chip manufacturing in the United States, aided by the subsidies received from the U.S. government. TSMC’s initial investment in the plant was $12 billion, with plans to increase funding for expansion, constructing a total of three production phases. Currently, the trial production of the A16 chip is of great importance to Apple; if the trials go well, future production volumes are expected to increase substantially.
Lenovo announced on September 18 that it has commenced the production of AI servers at its southern India facility, and has established an AI server R&D lab in Bangalore. The factory aims to produce 50,000 AI rack servers and 2,400 GPU servers annually, designed for resource-intensive tasks such as machine learning. Additionally, the facility manufactures laptops and personal computers.
Amar Babu, President of Lenovo’s Asia Pacific region, revealed plans to invest $1 billion globally over the next two years to accelerate the development of AI platforms and hardware. India’s AI market is currently valued at around $17 billion and is growing at an annual rate of 25% to 30%.
