At 3 nm, Samsung tries to overtake TSMC

June 12, 2023
Latest company news about At 3 nm, Samsung tries to overtake TSMC

In the eyes of many people, Buffett's investment decision not only represents his personal investment wisdom, but also represents the collective will of the American capital group. Whether Buffett has other meanings or speaks for others, people do pay more attention to Buffett's every move and bring their own interpretations.


A-shares have an obvious "Buffett effect", and once the A-share market comes out of the news that Buffett has bought into A company, A stock will basically rise to a certain extent.


According to the 13F report for the first quarter of 2023 submitted by Buffett's Berkshire Hathaway recently to the US SEC, as of the end of the first quarter of 2023, the total market value of Berkshire's holdings increased from $299.08 billion to $325.109 billion, and the first quarter increased its holdings of 7 stocks, newly opened 3 positions, and reduced its holdings of 8 stocks. And liquidated four - Bank of New York Mellon, US Bancorp, Taiwan Semiconductor Manufacturing and furniture chain RH.


Among them, the Chinese are more concerned about why the clearance of TSMC? Is TSMC no longer the leader in chip foundry?



"I don't like the location."



Of course, Buffett also explained the reason for the liquidation.


At the previous Berkshire Hathaway shareholders' meeting, Buffett said that TSMC is a good company, but he doesn't like the company's "location." He stressed that TSMC's location was his main consideration in adjusting his investment strategy, saying that the allocation of funds in Japan is better than in Taiwan, which makes him more comfortable, "TSMC is one of the best managed and most important companies in the world, and you can also say that about this company in five, 10 or 20 years." I don't like the location."


But in addition to the well-known geographical reasons, are there other reasons, such as the technical level, TSMC's current lead can maintain how long?


As early as June 30, 2022, Samsung Electronics announced the mass production of 3-nanometer chips, and for the first time adopted the full gate (GAA) process, leading TSMC in both the process and process structure.




TSMC's current advanced processes, including 4nm, are using FinFET structures. The FinFET three-sided (3D) ring-gate structure is more efficient than the flat-panel transistor process, but it has limitations in processes below 4 nanometers. GAA technology uses four-sided ring grid structure, which can better control the current direction and improve the power consumption efficiency. Therefore, GAA technology is regarded as the core design technology for the new generation of chips that require high performance and low power consumption, such as artificial intelligence (AI) and big data.


Kim Jeong-ho, a professor at the Department of Electrical and Electronic Engineering at the Korea Advanced Institute of Science and Technology (KAIST), said, Samsung s GAA technology is a challenge to TSMC, the industry leader, because FinFET technology can be used to produce 3-nanometer technology.



Explosive and differential needs of semiconductors



Unlike Samsung, which switched to the GAA process structure at the 3-nanometer node, TSMC plans to introduce GAA technology at the 2-nanometer process in the first half of 2025. Intel has also made the same decision, planning to continue using FinFET technology in the 3-nanometer process and adopt GAA technology starting with the 2-nanometer process.


Although from 14/16 nm all the way to the 4 nm era, Samsung has been crushed by TSMC. However, in the 3-nanometer era, Samsung does have the leading technological strength. Whether this technological advantage can be converted into a commercial advantage in the foundry market in time needs to be verified, but the market is also changing, and more large customers are also inclined to use Samsung as a foundry supplier.


In fact, billion Ou has previously analyzed that AMD, due to its inability to obtain a high enough priority in TSMC, has decided to contract some advanced processors in Samsung, which will also bring more uncertainty to TSMC.


South Korea Hi Investment and Securities analyst Song Myeong-sup (sound) said, "According to the traditional pattern, once TSMC can not provide enough products for Qualcomm, AMD and Nvidia, they are likely to place orders to Samsung Electronics."


Although the current market pattern of foundry manufacturing is very stable: TSMC is far ahead, Samsung follows, Intel IDM model "self-produced and self-sold", Chinese foundry companies are still struggling to catch up outside of 14 nm or even 28 nm...


However, when AIGC represented by ChatGPT rapidly set off industrial changes, there was both explosive demand growth for semiconductors and changes in the demand for advanced processes.


For example, behind the services provided by OpenAI's large model are more than 10,000 Nvidia A100 graphics cards.


Data show that around 2018, OpenAI has launched Transformer and GPT-1 models, with the number of participants at the 100 million level; Subsequently, Google proposed a BERT model with 300 million parameters, and the number of parameters grew again. In 2019 and 2020, OpenAI accelerated its catch-up and iterated GPT-2 and GPT-3 models one after another, with 1.5 billion and 175 billion participants respectively. The data used for training GPT-2 is taken from highly praised articles on Reddit, and the data set has a total of about 8 million articles, with a cumulative volume of about 40G; The GPT-3 model's neural network is trained on more than 45 terabytes of text, the equivalent of 160 times the size of the entire English version of Wikipedia.


Behind the exponential increase in the amount of data and the number of parameters, the required computing power has also risen.


The computing power requirements of this large model naturally require advanced manufacturing processes, but they are not necessarily rolled to 3 nanometers like mobile phone chips. The NVIDIA A100 card has 54 billion transistors and uses TSMC's 7nm process, which was mass-produced four years ago (2019).




Of course, different companies will use different processes for cost and market considerations, such as Apple's M2 series chips are also introducing AI accelerator design, using TSMC's 4-nanometer process. At CES 2023 in January this year, AMD not only integrated a dedicated on-chip AI engine Ryzen AI in the Ryzen 7040 series mobile processor using a 6 nm process, Su Zifeng also claimed that this is the first dedicated AI processing chip on x86 processors; Also launched the 5/6 nanometer AI inference accelerator AMD Alveo V70, featuring high energy efficiency, peak AI computing power can reach 400TOPS, TDP only 75W; And the AMD MI300 accelerator uses Chiplet to integrate 146 billion transistors!


New packaging technologies such as Chiplet have also brought new changes to the chip foundry market. Buffett's shift from Taiwan to Japan may also be a bet on Japanese semiconductors in this era of great technological change.



"Do I have a chance?"



Japanese Prime Minister Fumio Kishida also met with executives from semiconductor related companies in the United States, Europe, South Korea and Taiwan at the Prime minister's residence on May 18. Kishida personally appealed to companies to invest in Japan, in a meeting with company executives said, "I hope to use the government's efforts to further expand direct investment in Japan and support the Japanese semiconductor industry."


The meeting was attended by TSMC Chairman Liu Deyan, Intel CEO Pat Kissinger, Micron Technology CEO Moroteya and other seven people, as well as Samsung Electronics and IBM executives. They're all leaders of semiconductor giants.


Due to the special relationship between Japan and South Korea, the acceleration of semiconductor cooperation will not hurt Samsung. In fact, the semiconductor relationship between Japan and South Korea is more similar to the industrial supporting between the republics of the Soviet Union, and the cooperation between industries is greater than competition, as long as the "dog eat dog" general "jam" is broken, it can play a lot of joint efforts.


According to market Research firm QY Research, the global semiconductor foundry market is expected to grow from $113.421 billion in 2021 to $219.304 billion in 2028. Samsung Electronics started mass production of GA-structured 3-nanometer semiconductors in June last year, which greatly improves power and performance efficiency. It is expected to keep pace with TSMC in foundry technology when mass production of 2-nanometer semiconductors begins in 2025.


However, whether it is Japan's attempt to revisit the old dream of semiconductor "wulin leader" or Samsung's attempt to replace TSMC's replacement site, it is also necessary to consider the will of the "master" behind it.


According to EFE News agency Hiroshima reported on May 19, US President Joe Biden arrived in Hiroshima, Japan on the 18th to attend the Group of Seven (G7) summit. Interestingly, Biden also carried a briefcase known as the "nuclear button" (carried by military aides, not the president, of course) during his visit to the site of the U.S. atomic bombing.



The "nuclear button" briefcase landed where the nuclear bomb landed, which is also very ironic. At the 3/2-nanometer process stage, the United States has not surpassed TSMC, the Japanese semiconductor industry and South Korea's Samsung, has a chance?


The huge change brought by ChatGPT, which Ma Huateng called "once in a few hundred years", is a very big opportunity for industrial restructuring. Ma Huateng's exact words are as follows:


"We initially thought [artificial intelligence represented by ChatGPT] was a once-in-a-decade opportunity for the Internet, but the more we thought about it, the more we realized it was a once-in-a-century opportunity, similar to the industrial revolution that invented electricity."


"For the industrial revolution, taking out the light bulb a month earlier is not that important in the long run." The key is to do a solid job of the underlying algorithms, computing power and data, and the more critical is the scene landing, at present (we) are still doing some thinking. I feel like a lot of companies are in a hurry right now, and it feels like it's to boost the stock price, which is not our style."


But not only are many companies too anxious, some countries are also anxious. For example, Japan is betting on a variety of new technological tracks such as hydrogen energy vehicles, but it has been repeatedly suppressed by the Chinese and American industries, in the face of new applications of artificial intelligence such as ChatGPT, at least China has imitators, and Japan can not even mimic, how can it not be urgent?


In the first quarter of this year, China's exports reached 5.65 trillion yuan, up 8.4% year on year. Among them, electric manned vehicles, lithium batteries, solar cells and other "new three types", total exports of 264.69 billion yuan, an increase of 66.9%; The "new three" exports to the five major markets of the EU, the United States, ASEAN, South Korea and the United Kingdom increased by 88.7%, 88.1%, 103.5%, 121.7% and 118.2% respectively.


South Korea's trade deficit in the first quarter was $22.401 billion, up 397.6 percent year on year. Exports to China fell 33.4 per cent year on year, the 10th consecutive monthly decline.


As the carrier of South Korea's economy, Samsung, how can not hurry? Beyond geopolitics, the shift in data is driven more by the shifting power of technology and industry. For Samsung, starting from 3 nm and even a few years later, the 2 nm process must be sniped at TSMC. Because it's Samsung's last chance.


Japanese semiconductor has also been brilliant, in the face of the day of TSMC, and will not envy?


Once upon a time, you were beaten if you were backward. The industrial transformation of the 21st century is no less brutal. Tender competition exists only in imagination - perhaps only half a step behind in a technological revolution, a small and prosperous country will become devastated and die of the starved. And an originally prosperous middle power, will usher in another barren, lasting 30 years of the bubble will continue to cover.