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Non-Tech : Kirk's Market Thoughts -- Ignore unavailable to you. Want to Upgrade?

To: Sun Tzu who wrote (17956)	2/27/2024 11:23:22 AM
From: Kirk ©	1 Recommendation Recommended By Sun Tzu Read Replies (2) \| Respond to of 26841

Looks like Intel is doing well even as TV pundits.... Maybe by the time Cramer starts yapping about prices collapsing in some stocks he loves as Intel continues to regain share... we'll have a chip glut and the industry has another massive bear market. I'm still trying to figure out if we're having a healthy rotation out of bubble stocks that worked because people were buying their stories and to hell with valuation and have now found religion and are diversifying by taking profits and buying value. Intel's 1.8nm chip revelation and Microsoft deal casts shadow over Samsung's semiconductor ambitions Daniel Chiang, Taipei; Jerry Chen, DIGITIMES Asia Tuesday 27 February 2024 Several IT giants have recently visited South Korea to discuss AI semiconductor collaboration with Samsung Electronics, raising expectations within the South Korean industry for Samsung's advanced wafer foundry development. However, Intel's recent revelation at the Integrated Foundry Solutions (IFS) Direct Connect conference, announcing Microsoft as a customer for their 1.8nm chips, coupled with Open AI CEO Sam Altman's prominent presence, casts a shadow over Samsung's strategies. According to reports from Korean media outlets such as Business Post and The Korean Economic Daily, Intel unveiled its advanced process roadmap at the conference, with its 1.8nm process slated for mass production by the end of 2024, ahead of the expected 2025 production timelines by TSMC and Samsung. All three companies had announced plans to commence production of 1.4nm chips by 2027. Intel vs Samsung At the event, Intel acknowledged TSMC as an "excellent competitor and partner," conspicuously leaving out any reference to Samsung. Their declaration to ascend as the world's second-largest foundry by 2030 explicitly signals their ambition to outstrip Samsung. Intel's foundry backlog orders have surged from US$10 billion at the end of 2023 to US$15 billion. Samsung's foundry division's annual revenue is approximately US$20 billion. While Samsung led the industry in 2022 in producing 3nm chips, their advanced process has struggled to secure orders. Known customers for the 2-3nm process include PanSemi and Japanese AI startup PFN (Preferred Networks), while major players like Nvidia and AMD concentrate their AI chip production at TSMC. As a result, Samsung views IT giants such as Meta, Open AI, Google, and Amazon, which develop AI chips independently, as potential breakthroughs. In light of TSMC's capacity limitations, Samsung hopes to secure orders from these companies. Previously, Open AI CEO Sam Altman visited South Korea in January 2024, reportedly meeting with top executives from Samsung and SK Hynix. There have also been reports of Meta CEO Mark Zuckerberg planning to visit South Korea after a 10-year hiatus to discuss AI business collaboration with Samsung Chairman Lee Jae-yong. Having entrusted Samsung with producing its mobile chips, Google is poised for a collaboration in the AI chip sector. Samsung also emphasizes its unique position as the only global entity capable of simultaneous production of advanced semiconductors and high-performance memory, leveraging a "one-stop service" as a marketing focal point. However, Intel's unveiling of the 1.8nm process blueprint and Microsoft CEO Satya Nadella's surprise announcement of a US$5 billion deal pose challenges for the South Korean giant. Altman's conversation with Intel CEO Gelsinger, underscoring the shortage of AI chips and an endorsement from US Commerce Secretary Gina Raimondo, raises further concerns for Samsung's pursuit of orders from these IT giants. The US shift Gelsinger highlighted that 80% of semiconductor production is in Asia, with only 20% in Europe and America, necessitating a shift to 50% each within ten years. Raimondo echoed this sentiment, emphasizing that the US previously accounted for 40% of global semiconductor production and must regain its leadership role in the global semiconductor industry. South Korean semiconductor industry players like Samsung are monitoring developments from the US government and Intel. This is primarily due to the joint US initiative led by Microsoft, which may impact the intentions of Meta, Open AI, and other entities. Furthermore, the details of the US CHIPS Act subsidies for companies and their scale are yet to be fully disclosed. If, as rumored, the US prioritizes subsidies for domestic companies, Samsung's plans for its Texas Taylor plant may be delayed or scaled down, resulting in significant setbacks for the South Korean conglomerate. https://www.digitimes.com/news/a20240223PD211.html