1. The Ministry of Commerce responded to the U.S.’s release of final rules on semiconductor export controls to China.

2. It is rumored that AMD China will lay off 15% of its employees, and the GPU department is the hardest hit area.

3. Nvidia RTX 4090 graphics card is out of stock across the entire network, and the inventory has been almost wiped out, with the highest price rising to 50,000 yuan.

4. TrendForce: It is estimated that the proportion of mature process production capacity in mainland China will increase to 33% in 2027

5. The semiconductor market will pick up, and mainland MCU manufacturers will stop cutting prices to clear inventory.

1. Industry trends are forward-looking

Foxconn is under tax investigation, Fii stock price plummets

After the official announcement of tax inspections on Foxconn, a subsidiary of Hon Hai Group, Fii’s share price plummeted 10% on the morning of October 23, and Hon Hai Group’s share price fell 2%.

According to the Global Times, China's tax authorities have recently inspected the taxation of key enterprises of Foxconn in Guangdong, Jiangsu and other places in accordance with the law, and the natural resources department has launched on-site investigations into the land use of Foxconn's farming enterprises in Henan, Hubei and other places. (Shande Information)

The United States released final rules on semiconductor export controls to China on October 17. Based on the interim rules issued on October 7 last year, the final rules further tightened export restrictions on artificial intelligence-related chips and semiconductor manufacturing equipment to China, and added a number of Chinese entities to the export control "entity list." In response, the Ministry of Commerce stated: China will take all necessary measures to resolutely safeguard its legitimate rights and interests. (Financial Associated Press)

The two departments issued announcements to optimize and adjust temporary export control measures for graphite items

On October 20, the Ministry of Commerce and the General Administration of Customs issued the "Announcement on Optimizing and Adjusting Temporary Export Control Measures for Graphite Items", which mentioned that items that meet the following characteristics may not be exported without permission: (1) High purity (Purity>99.9%), high strength (flexural strength>30Mpa), high density (density>1.73g/cubic centimeter) artificial graphite materials and their products; (2) Natural flake graphite and its products (including spheroidized graphite , expanded graphite, etc.), will be officially implemented on December 1, 2023.

High-purity graphite has many uses in the semiconductor industry (i.e., making semiconductor materials), and graphite is also a key material for the negative electrode of lithium batteries used in electric vehicles. (Xinhuanet, Jiweinet)

General Administration of Customs: In the first nine months, the import value of integrated circuits fell by nearly 20% year-on-year

The General Administration of Customs recently released the "Volume Value Table of Key National Import Commodities in September 2023." Among them, the import quantity of "diodes and similar semiconductor devices" in September was 42.17 billion units; the cumulative import quantity from January to September was 334.63 billion units, with a value of US$17.352 billion. Compared with the same period last year, the import quantity decreased by 29.5%, and the import value decreased. 20.5%. The import quantity of "Integrated Circuits" in September was 42.55 billion units; the cumulative import quantity from January to September was 355.85 billion units, with a value of US$252.926 billion. Compared with the same period last year, the import quantity fell by 14.6%, and the import value dropped by 19.8%. (Jiweiwang)

South Korea's NAND exports increased 5.6% year-on-year in September

Data released by the South Korean Ministry of Trade on October 16 showed that NAND flash memory exports increased by 5.6% year-on-year in September, while falling by 8.9% year-on-year in August. Exports of DRAM, another pillar of the memory chip industry, fell by 24.6% over the same period, down from 35.2% in the previous month. (Science and Technology Innovation Board Daily)

IC design industry said gross profit margin is low this year and may rebound in the first quarter of next year

The semiconductor industry has gradually emerged from the haze of inventory adjustments, allowing IC design companies to see signs that gross profit margins have stopped falling and stabilized. Some industry insiders also revealed that as wafer foundries such as UMC and Worldwide have lowered their quotations, it is also a big plus for IC design factories. In addition, due to the impact of the general environment, gross profit margin performance will be low this year, but there is a chance that it will start to rebound from the first quarter of next year. (Taiwan Economic Daily)

MLCC leader Murata is optimistic about the rebound in demand for passive components

Murata President Nakajima Kiju pointed out that he has felt the rebound in demand in India and other parts of Southeast Asia, and is optimistic that the global smartphone market has bottomed out and will recover this year. Under this trend, Murata is expected to have sales in the next fiscal year. The number of goods will increase by a single-digit percentage. (Shande Information)

Yole: The advanced packaging market is expected to grow by 23.8% quarter-on-quarter in the third quarter

Yole's latest report points out that after a downturn in the first half of the year, the advanced packaging market will usher in a 23.8% quarter-on-quarter growth in the third quarter. The market is expected to maintain steady growth this year and achieve a compound annual growth rate of 8.7% in the next five years. USD 43.9 billion in 2022 to USD 72.4 billion in 2028. (Yole)

TrendForce: It is estimated that the proportion of mature process production capacity in mainland China will increase to 33% in 2027

According to TrendForce Consulting statistics, the production capacity ratio of global foundry mature processes (28nm and above) and advanced processes (16nm and below) will remain at approximately 7:3 from 2023 to 2027. Due to its efforts to promote localized production and other policies and subsidies, mainland China is the most aggressive in expanding production. It is estimated that the proportion of mature process capacity in mainland China will increase from 29% this year to 33% in 2027. (TrendForce)

TrendForce: HBM3E will boost annual HBM revenue growth by 172%

In addition to the existing market mainstream HBM2E, the demand proportion of HBM3 this year has also increased with the mass production of NVIDIA H100/H800 and AMD MI300 series. The average unit selling price of HBM is several times higher than that of other DRAM products. It is expected to significantly contribute to the revenue of memory manufacturers in 2024. It is estimated that the annual growth rate of HBM revenue in 2024 will reach 172%. (TrendForce)

2. New trends in major manufacturers

It is rumored that AMD China will lay off 15% of its employees, and the GPU department is the hardest hit area

Recently, a netizen on a workplace social platform broke the news that AMD will begin layoffs in China, and the number of layoffs may reach 450. According to reports, AMD’s layoff ratio in this round may be 10%-15%, which may involve about 300-450 employees, among which the RTG department is the hardest hit area. The compensation plan is said to be "N+4", but there are also rumors that "N+7" is also possible. (Xinzhixun)

TSMC Wei Zhejia: 2nm technology beats rivals, N3E passed certification and reached yield target

TSMC President Wei Zhejia said that the progress of 2nm is optimistic and will maintain the pace of entering mass production in 2025; 3nm continues to make progress, and N3E has passed certification and has reached the yield target. He revealed that after internal evaluation, N3P's overall power consumption performance is comparable to its competitor 18A (process below 2nm), and even enjoys better technology maturity and cost advantages. Therefore, it is certain that 2nm will also be better than its competitors. HPC and smartphone customers are highly interested in 2nm, which is expected to be available to customers in the first half of 2025 and enter mass production in 2026. (Taiwan Business Times)

ASML's new order volume fell 42% in the third quarter

On October 18, ASML announced its third quarter financial report for 2023. ASML Q3 net income was 6.673 billion euros, a year-on-year increase of about 15% and a month-on-month decrease of 3.3%; gross profit margin reached a new high of 51.9%, after-tax net income was 1.893 billion euros, R&D expenditure was 990 million euros, and earnings per share were 4.81 euros. At the end of the third quarter, the company's cash and equivalents balance was 3.15 billion euros.

However, due to the downturn in the semiconductor industry, ASML's new orders in the third quarter fell 42% from the previous quarter to 2.6 billion euros (approximately US$2.8 billion), of which new orders from China accounted for 46% of its total amount. (TechSugar)

Samsung's HBM3E product Shinebolt has been sent to customers as samples, and the data transmission speed is about 50% higher than HBM3

Samples of Samsung's HBM3E product Shinebolt have been sent to customers. The data transmission speed is about 50% higher than HBM3. Samsung Electronics has confirmed that it will name its HBM3E product "Shinebolt". The sample is an 8-layer 24-gigabit chip, and it is said that the development of 12-layer 36-gigabit products will be completed soon. (Business Korea)

Infineon signed long-term semiconductor supply contracts with Hyundai and Kia to supply silicon carbide and silicon power modules and chips to the latter

German chipmaker Infineon said on October 18 that it had signed a multi-year agreement with Hyundai and Kia to supply silicon carbide and silicon power modules and chips to the two car companies. The agreement will last until 2030. (Science and Technology Innovation Board Daily)

Mitsubishi considers bid for Fujitsu chip unit Shinko

According to foreign media reports, Mitsubishi Corporation is considering bidding for Fujitsu's chip packaging subsidiary Shinko and intends to enter the semiconductor manufacturing field. Mitsubishi is planning a joint bid with one of the potential buyers, sources said, adding that those talks are in the early stages and Mitsubishi has yet to decide on a partner. (TechSugar)

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