These are the most-read DIGITIMES Asia stories from the week of February 17 – February 21.
China shifts strategy on US tech rivalry: industry leaders respond to Xi's call
The Chinese government held its first meeting with private enterprises in nearly six years, signaling a shift in its approach to the tech sector. Key attendees included industry giants like Huawei's Zhengfei Ren, BYD's Chuanfu Wang, Xiaomi's Jun Lei, and Tencent's Pony Ma, with Alibaba co-founder Jack Ma making a notable return to the spotlight. The absence of Baidu CEO Robin Li stirred discussion about China's evolving tech landscape.
Discussions centered on semiconductors, AI, EVs, and robotics, highlighting China's ambitions but also its challenges in foundational manufacturing. Despite its technological progress, China remains reliant on companies like TSMC and ASML, a vulnerability in its semiconductor industry. Meanwhile, Beijing appears to be reconsidering its regulatory stance on private enterprises, recognizing their role in innovation and economic growth.
The meeting also reflects China's response to US tech policies, particularly regarding sanctions. As the US focuses on advanced manufacturing with figures like Elon Musk playing a key role, China is fostering a new generation of tech leaders to drive innovation and counteract American pressure. The overarching message—China remains determined to advance its technological ambitions despite external challenges.
Intel reboots foundry business with UMC and MediaTek alliance amid restructuring rumors
Intel Foundry, which has been struggling with financial losses, is seeking new opportunities by collaborating with UMC and its affiliated IC design companies, including MediaTek. This partnership aims to help Intel revitalize its foundry business amid industry speculation about potential restructuring, asset sales, or acquisitions involving companies like TSMC and Broadcom.
Despite concerns over Intel's future, the company is strengthening ties with Taiwan's semiconductor supply chain, leveraging cost-efficient suppliers to improve operations. Intel's partnerships with UMC and MediaTek, including agreements on 12nm and 16nm process technologies, are seen as strategic moves to mitigate geopolitical risks and enhance production capacity.
While Intel's advanced sub-7nm technology remains dependent on TSMC, its collaborations with "second-tier manufacturers" like UMC provide a potential lifeline. The success of these efforts will largely depend on negotiations with the US government, TSMC, and other industry stakeholders.
China's HBM breakthrough intensifies pressure on Samsung
China's memory industry is rapidly advancing, narrowing the technology gap with South Korea in DRAM, NAND flash, and HBM, which is crucial for AI computing. Chinese academic institutions now lead globally in HBM research, surpassing South Korea in published papers. While South Korea still controls 90% of the HBM market, China's growing influence in semiconductor research is drawing industry attention.
Government investments, particularly the "Big Fund," have fueled China's progress, with the latest funding phase in 2024 focusing on semiconductor localization, EUV lithography, and AI chip advancements. Domestic companies like CXMT, XMC, and Tongfu Microelectronics are making strides in HBM production, aiming for 70% self-sufficiency by 2026.
This puts pressure on Samsung, which is already lagging behind SK Hynix and Micron in securing Nvidia's validation for its HBM3E products. If Chinese manufacturers ramp up production and undercut prices, Samsung's profitability could face serious challenges.
Huawei CEO hints at 'Backup Plan 2.0'; HiSilicon launches new automotive chip
HiSilicon is expanding beyond mobile and computing chips into the automotive industry, with a strong focus on EV BMS. This aligns with Huawei founder Zhengfei Ren's push for greater self-innovation under the newly announced "Backup Plan 2.0."
After recovering from US sanctions, Huawei is accelerating local chip development. HiSilicon recently launched the AP2711, an automotive-grade high-precision AFE chip for BMS, marking a breakthrough in China's chip industry. This chip provides an alternative to dominant international players like ADI, Texas Instruments, and NXP, who control 90% of the global BMS AFE market.
To support production, Huawei collaborates with local foundries like SMIC, optimizing a 28nm analog process platform. Since losing access to TSMC, HiSilicon has focused on automotive chips that require less advanced manufacturing, ensuring a secure domestic supply chain. With mass production of the AP2711 underway, Chinese BMS chips are expected to first penetrate mid-range vehicles before expanding into high-end markets, strengthening China's autonomy in the automotive semiconductor industry.
DRAM manufacturers reportedly plan to cease DDR3, DDR4 production by late 2025
The DRAM market is undergoing a major shift as top manufacturers—Samsung, SK Hynix, and Micron—move away from DDR3 and DDR4 in favor of DDR5 and HBM. Reports suggest they may cease production of older DRAM technologies by the end of 2025, potentially leading to supply shortages post-summer 2025, with Taiwanese firms expected to fill the gap.
Taiwan's Nanya Technology forecasts the market will hit bottom in early 2025 but start recovering by Q2 due to rising demand, improved inventory management, and global economic stimulus. While AI cloud computing demand remains strong, consumer demand is expected to recover more slowly.
With a growing focus on DDR5 and HBM, manufacturers like Winbond are upgrading their production capabilities. Winbond plans to shift to a 16nm process in late 2025 to produce 8Gb DDR memory, moving away from its current 20nm-based DDR3 and DDR4. Market trends show DDR5 prices rising despite weak overall demand, while DDR4 prices remain stable. Meanwhile, DDR3 prices have been in steady decline, reinforcing the industry's pivot toward next-generation memory technologies.
Strong fundamentals for DRAM and NAND drive memory prices to rise in 2Q25
Memory chip manufacturers are preparing to raise prices in the second quarter of 2025 as demand for high-end DRAM and NAND flash storage strengthens. The first quarter remains a low point, but inventory adjustments and rising AI server demand—alongside Chinese government incentives—are accelerating market recovery. Micron and other manufacturers are planning DRAM price hikes, while NAND prices are stabilizing, with gradual increases expected in Q2.
The AI-driven shift in the memory market is evident, with major cloud providers like Amazon and Google ramping up spending on data centers and AI semiconductors. Samsung is set to introduce HBM3E products by Q1 2025, and Micron is expanding its HBM customer base, reflecting growing demand. Industry insiders anticipate a price rebound due to tight supply, as HBM production limits the availability of DDR5 and other advanced DRAMs.
Micron's DRAM facilities in Taiwan may also experience supply constraints following recent earthquakes, potentially impacting global capacity. NAND recovery is slower, but coordinated supply constraints among manufacturers should help stabilize pricing. Consumer electronics demand, spurred by Chinese subsidies, is aiding inventory normalization, while AI smartphones, PC replacements, and growing enterprise SSD adoption are expected to boost memory demand further in 2025.
Commentary: Intel's 18A advantage undermines the case for a TSMC takeover
Pat Gelsinger's departure as Intel's CEO highlights a conflict between his vision and the company's board. Gelsinger aimed to expand advanced chipmaking and maintain Intel's 'Made in America' strategy, even considering acquiring GlobalFoundries. However, Intel's financial struggles, including mounting foundry losses, led the board to explore restructuring options, including asset sales and outside investments.
Intel Chairman Frank Yeary has reportedly engaged TSMC in discussions about potential strategic cooperation. Possible outcomes range from Intel selling its foundry unit to TSMC to outside investors acquiring parts of its business, with companies like Broadcom, Qualcomm, and Arm potentially interested in Intel's chip divisions. Some speculate that this could create a 'New Intel,' similar to how Broadcom evolved after its acquisition by Avago.
However, Intel's claims that its 18A process surpasses TSMC's N2 technology raise further questions. If Intel still holds a technological edge, why would the US government support TSMC's involvement? If its technology is underperforming, then a partnership with TSMC might be necessary.
Operational challenges remain, as Intel employees would need to adapt to TSMC's manufacturing model, and integrating Intel's process technologies could be costly. Without substantial US government incentives, a TSMC takeover of Intel's foundry business may not be financially appealing. Industry experts question whether such a deal would save Intel or signal its decline.
