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Showing posts with label chips. Show all posts
Showing posts with label chips. Show all posts

Thursday 18 July 2024

Time for Malaysia to keep its edge in global chips

 

The government’s new National Semiconductor Strategy provides a clear roadmap for the country’s move up the global technology value chain.

Penang’s Bayan Lepas Free Industrial Zone, home to hundreds of multinational companies, has succeeded because it offers everything these businesses need in one convenient location.

MALAYSIA’S semiconductor industry has been a source of national pride since Intel opened its first overseas assembly plant in Penang in 1972.

Since then, Malaysia has captured a 13% share of global testing and packaging, building a semiconductor industry that now accounts for 25% of gross domestic product.

The vibrant state of Penang is again at the top of the list for semiconductor investments, with dozens of major expansion projects underway.

There is a sense, though, that we are only scratching the surface.

With semiconductors only becoming more important to modern life, Malaysia’s chip sector is not just a business opportunity; it is an opportunity to put the country firmly at the centre of future supply chains in South-East Asia and around the world.

The government’s new National Semiconductor Strategy aims to do just that.

Backed by an initial RM25bil of public funding, the plan provides a clear roadmap for the country’s move up the global technology value chain.

The ambitious targets are a sign that Malaysia understands what’s at stake.

The government aims to attract RM500bil of investment into the sector, train 60,000 chip engineers and establish at least 10 Malaysian companies in design and advanced packaging.

None of this will be easy.

Chip factories and research hubs do not appear overnight.

Just putting a new chip design into production can take up to four months, involving hundreds of steps, including oxidation, photolithography, and etching.

Major new fabs or testing facilities can cost billions of dollars.

But while the new strategy will take time to show results, the stars are aligned in Malaysia’s favour. Businesses must look to seize this moment.

Building on strong foundations

For the best chance of meeting its semiconductor goals, Malaysia can call on a number of tried and tested ingredients.

The first is to acknowledge the power of free trade.

While semiconductor technology is in the geopolitical spotlight, Malaysia’s neutral position on global tariffs is a key part of its appeal to international businesses.

The country’s chip sector has a distinct advantage of being able to attract investment from both the United States and China – as well as many other countries.

Free trade zones are also a powerful pull for semiconductor companies that focus on re-exporting to overseas markets, such as in the outsourced assembly and test segment.

The concentration of skilled labour, specialised logistics and raw materials create an attractive ecosystem for new entrants.

Penang’s Bayan Lepas Free Industrial Zone, home to hundreds of multinational companies, has succeeded because it offers everything these businesses need in one convenient location.

Consistent policies

Consistent and coordinated policies are also critical in giving businesses the confidence they need to make long-term investment decisions.

The new semiconductor strategy ties in with Malaysia’s New Industrial Master Plan 2030, which emphasises the country’s digital infrastructure.

And, of course, sustainability will be a powerful enabler.

International technology companies demand access to clean energy to meet their own emissions objectives, so additional investment in renewable capacity and upgrades to the electricity grid will be needed to sustain the country’s competitiveness.

Collaboration between industry, government and utilities has produced encouraging signs: Intel’s rooftop solar installation in Malaysia is its biggest outside the United States.

Micron’s Malaysian facilities were the first in its global network to be powered by 100% renewable energy.

A historic opportunity

Demand for more advanced processing is also transforming the chip sector, as customers look for specialised hardware to support new technology, including artificial intelligence.

We see across the wider region that high-tech ecosystems generate valuable ancillary business opportunities – such as data centres, services, and advanced materials.

In Penang, a new crop of advanced semiconductor facilities from the likes of Infineon, Intel and ASE Tech will require new materials, new workers and new services.

The new semiconductor strategy recognises the historic opportunity ahead.

We must also acknowledge that it is a complex, globally connected industry, and that international competition for a share of higher-value front-end processes is more intense than ever.

That said, the success of hi-tech hubs like Penang – where HSBC opened its first office in Malaysia in 1884 – is a great example of how a diverse community, strong logistics and a supportive policy framework can facilitate the growth of a multi-billion-dollar industry.

The rewards of getting this right are tantalising.

In the new area of digital technology, semiconductors are only becoming more essential for businesses.

While the prize is significant, achieving it will require a deep partnership between industry and policymakers – underpinned by strategic planning, investment in skills and a commitment to free trade.

With all that in mind, Malaysia’s chip strategy could not have come at a better time.

Noor Adhami is HSBC’s international banking global head and Karel Doshi is HSBC Malaysia’s commercial banking head. The views expressed here are their own.

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Sunday 17 September 2023

Chips, politics and economic dominance

Officially Huawei became the world’s number one smartphone player after shipping 55.8 million handsets, surpassing Samsung in the second quarter of 2020. — Bloomberg

SMIC'S progress in industry commendable effort despite sanctions

 
TWO weeks ago, without much fanfare or large-scale promotional event, Huawei Technologies launched a surprise pre-sale of its latest Mate flagship model.

This was out of the blue, considering that Huawei suffered for the past three years since the United States trade sanction during the Donald Trump-led administration which placed Huawei on the export blacklist depriving the phone and network giant from key semiconductor components necessary to manufacture its successful premium smartphone products.

At its peak in 2020, Huawei had 38% of China’s total smartphone market share with Vivo coming in second at 17.7% and Oppo coming in third at 17.4%.

Globally, Huawei had just over 10% with much room to catch up to Samsung and Apple, which had an estimated 30% and 26% respectively.

Despite that, it officially became the world’s number one smartphone player after shipping 55.8 million handsets, surpassing Samsung in the second quarter of 2020.

This did not last long, as in the year after the trade sanctions kicked in, Huawei suffered immensely when its revenue for the consumer division plunged 47% in the first half of 2021 and fell out of the world’s top five smartphone maker for the first time in six years. 

 If that wasn’t enough, Huawei had to endure a prolonged winter because of the sanctions with market commentators even speculating they will exit the smartphone market entirely.

To stay afloat, Huawei sold off its entire stake in Honor, the budget range smartphone business for Us$15.2bil to Shenzhen Zhixin New Information Technology Co Ltd, a consortium made up of over 30 dealers and includes a state-owned enterprise of the municipal government of Shenzhen.

Hence, when social media caught wind of Huawei Mate 60 pro with videos of long queues for the launch of the smartphone, it attracted global attention. The two questions on everyone’s mind were, “how did Huawei do it with the sanctions ongoing?” and “is this the start of Huawei’s path to reclaim its smartphone throne?”

For those who are not too familiar, one should understand that chips are denominated in different measurements such as 5nm, 7nm and 10nm. It represents the specific generation of chips made with a particular technology and the smaller numbers represent more advanced and efficient technology.

In the past, these numbers indicated the size of the smallest features or transistors that can be produced on a chip using a particular manufacturing process.

What is interesting about Huawei’s latest smartphone launch is that the Kirin 9000s System on Chip that powers the phone model appears to be manufactured using an advanced 7nm process.

Following the trade sanction which was meant to cripple Huawei’s advancement in smartphone manufacturing, most would assume that Huawei would not have access to advanced chips.

In addition, Semiconductor Manufacturing International Corp (SMIC), China’s state-backed chip manufacturer which is widely regarded to be the top in China, is only capable of producing 14nm at that time. In addition, SMIC has not been able to procure the advanced Extreme Ultraviolet (EUV) lithography systems that are used to produce chips at 7nm and below before they were sanctioned as well.

Based on teardown analysis by reviewers online, the chip’s overall performance seems to match that of Snapdragon 888 or Apple A13 chipsets which were launched in 2019-2020. But for those who might have some familiarity with the chip fabrication industry, this is likely not the case as the 7nm chip could be produced using the older generation deep ultraviolet machines which China manufacturers can still import.

This would require usage of multi-patterning, a technique that has been utilised by Taiwan Semiconductor Manufacturing Company Ltd (TSMC) in 2017 of producing 7nm chips before EUV was introduced.

In fact, SMIC reportedly used this technique to produce a 7nm chip for bitcoin miners last year, so they are no stranger to the technique.

The downside of this technique is that it will waste more time, energy, water, while also resulting in higher defects and lower yield. Hence the cost of production is likely much higher.

Nonetheless, EUV machines are still needed to advance beyond 5nm process, and at 3nm and below, multi-patterning would be required even with EUV machines. Hence, we can say that the real bottleneck of the United States trade sanction will hit it hard beyond 5nm.

Currently, SMIC, while improving, is still lagging its global peers; TSMC and Samsung have already started mass production of chips using the 3nm process in 2022 which is two generations ahead of the 7nm process used by SMIC.

The gap is around four years but without access to EUV machines, it could take much longer for SMIC to reach 3nm. It is important to note that all its competitors are now working towards mass production of 2nm chips in 2025.

Considering how SMIC is also sanctioned by the United States, it is remarkable to see it making progress. SMIC will likely continue to be supported by the Chinese government in developing advanced chips.

So long as self-interest politics remains the priority over mutual prosperity and the technology transfer agenda, we will see companies and manufacturing bases move across regions based on the countries’ political alignments or foreign policies rather than merits.

Apart from the United States and European manufacturers that have been diversifying production out of China, even some Chinese suppliers are building new factories in our country as they do not want to lose their markets outside of China.

For now, most are setting up in the existing states with matured industry supply chains such as in Penang and Johor.

Hence, sad to say, while this fight between the two economic powerhouse is detrimental to the world in the long term, in the short term, it appears that it is good for our nation, and we should continue to capitalise on the opportunity.

At the end of the day, every country, especially the larger economies, hopes to maintain its economic dominance over the rest of the world. This era, thankfully, is not an era where the wars between countries are fought with guns and bullets. It is an era where the race is on technological advancement and scientific breakthrough.

Apart from the semiconductor chip competition that has been ongoing since the start of the United States-china trade war, the Covid-19 global pandemic has raised the awareness for the government on the importance on advancing research and development in the pharmaceutical and healthcare industry.

Even countries with the strongest military power cannot avoid the same fate of being engulfed in the effects of the pandemic like any other Third World country.

Unlike the United States, Europe, Taiwan and South Korea, China started research and development in the semiconductor industry much later. We must remember China only started focusing on developing its advanced chip technology recently.

Before the decoupling with the United States happened in 2020, there was no urgency to do so, given that they could still rely on imported technology.

As nations around the world continue to become more tribal, it is crucial to be self-sufficient, be it in the area of technology development, healthcare or food security. It may take awhile but eventually, government leaders ought to revert to multilateralism and focus on the benefits of building a global economy in the interests of mankind.

That is the best way forward for humanity.

By NG ZHU HANN

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Related posts:

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Malaysia needs to learn from China to leapfrog its economy - Miti


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Ten Republican lawmakers jointly sent a letter dated Thursday to Alan Estevez, undersecretary of Commerce for Industry and Security, exerting pressure and presenting seven demands. These demands include the establishment of a new agency dedicated to controlling the export of American technology to China, imposing “full blocking sanctions” on both Semiconductor Manufacturing International Corporation (SMIC) and Huawei, and placing all their subsidiary companies on the Entity List.

Sunday 4 September 2022

Washington's stab in Seoul's back shatters US 'values', chips assault will only hasten China’s indigenous innovation

 

 https://www.globaltimes.cn/page/202209/1274509.shtml

The US had not taken South Korea's interests into consideration from the very beginning. Such arrogance and indifference are undoubtedly an insult to South Korea's self-esteem.

 

 Washington's chips assault will only hasten China's indigenous innovation

https://www.globaltimes.cn/page/202209/1274585.shtml

The Biden administration has moved to further restrict China's access to advanced semiconductor products and technology, placing seven more Chinese entities of aerospace on its export control list late August, ...

 Illustration: Chen Xia/Global Times

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Thursday 10 January 2019

Huawei unveils server chipset as China cuts reliance on imports

New chip: A Kunpeng 920 chip is displayed during an unveiling ceremony in Shenzhen. Huawei is seeking growth avenues in cloud computing and enterprise services. — AP

https://youtu.be/IX5k_k4Q68c

HONG KONG: Huawei Technologies Co Ltd has launched a new chipset for use in servers, at a time when China is pushing to enhance its chip-making capabilities and reduce its heavy reliance on imports, especially from the United States.

Huawei, which gets the bulk of its revenue from the sale of telecommunications equipment and smartphones, is seeking growth avenues in cloud computing and enterprise services as its equipment business comes under increased scrutiny in the West amid worries about Chinese government influence over the firm.

Huawei has repeatedly denied any such influence.

Chinese firms are also seeking to minimise the impact of a trade dispute that has seen China and the United States slap tariffs on each other’s technology imports.

For Huawei, the launch of the chipset – called the Kunpeng 920 and designed by subsidiary HiSilicon – boosts its credentials as a semiconductor designer, although the company said it had no intention of becoming solely a chip firm.

“It is part of our system solution and cloud servicing for clients. We will never make our chipset business a standalone business,” said Ai Wei, who is in charge of strategic planning for Huawei’s chipsets and hardware technology.

The Shenzhen-based company already makes the Kirin series of smartphone chips used in its high-end phones, and the Ascend series of chipsets for artificial intelligence computing launched in October.

It said its latest seven nanometre, 64-core central processing unit (CPU) would provide much higher computing performance for data centres and slash power consumption.

It is based on the architecture of British chip design firm ARM – owned by Japan’s SoftBank Group Corp – which is seeking to challenge the dominance in server CPUs of US maker Intel Corp.

Huawei aims to drive the development of the ARM ecosystem, said chief marketing officer William Xu. He said the chip has “unique advantages in performance and power consumption”.

Xu also said Huawei would continue its “long-term strategic partnership” with Intel.

Huawei’s new ARM-based CPU is not a competitor to the US company’s x86 CPUs and servers, but complementary, Xu added. Redfox Qiu, president of the intelligent computing business department at Huawei, said the company shipped 900,000 units of servers in 2018, versus 77,000 in 2012 when it started.

Huawei was seeing “good momentum for the server business in Europe and Asia Pacific” and expects the contribution from its international business to continue to rise, Qiu added.

Huawei also released its TaiShan series of servers powered by the new chipset, built for big data, distributed storage and ARM native applications.

The firm founded chip designer HiSilicon in 2004 to help reduce its reliance on imports.

In modem chips, Huawei internally sources 54% of those in its own devices, with 22% coming from Qualcomm Inc and the remainder from elsewhere, evidence presented at an antitrust trial for Qualcomm showed. — Reuters


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Huawei's revenue growth rebounds despite `storm-tossed' 2018


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