Even with little legal success to date, the Trump administration’s misguided efforts to remake global trade and higher education threaten to wreck US leadership in semiconductors.
By Bolaji Ojo
What’s at stake:
The semiconductor industry is at a crossroads — propelled by AI, but strained by geopolitical tensions, and desperate for innovation. Enter Rapidus Design Solutions, the marketing unit of Rapidus Corp., a company defying expectations and trying to reshape and influence the high-performance chip manufacturing market and Japan’s role in it. Rapidus is Japan’s new foundry formed a few years ago to give the country a fighting chance in the world of advanced semiconductor manufacturing.
Rapidus Corp. isn’t just dipping its toes into semiconductor manufacturing. It is diving in headfirst, with the Japanese government playing lifeguard.
A state-of-the-art 2nm fab in Hokkaido, nearly completed after a mere three years, is setting the stage for Japan’s resurgence in chipmaking. Mass production is projected to begin in 2027, but the industry is already taking notice. Rapidus isn’t in full operation yet, and there are many challenges ahead for the company, including the possibility of it missing targets or failing to attract the customers it would need to crack open a spot in the global foundry business. Despite the obstacles, though, Rapidus is already making a name for itself in the market. Will the company sustain the positive take-off?
Read More »Rapidus Sparks Japan’s Semiconductor Comeback
TechSplicit presents a conversation on Software-Defined Vehicles featuring Timothy Edwards, co-founder and VP, Strategy, at Seeing Machines, and Colin Barnden, principal analyst at Semicast Research. They’ll be discussing 3D Sensing for In-Cabin Monitoring.
American political leaders see unbridled access to the hottest AI processors as a threat to the country’s goal of remaining the world’s sole superpower. But as companies like Nvidia groan loudly about restrictions on the exports of their products to China, will America yield or clamp down on perceived opposition to its stated ambitions?
By Bolaji Ojo
What’s at stake:
In a brutally honest review, a Stellantis executive details how US and European automakers can compete successfully against Chinese rivals. They must rearchitect the car, rapidly adopt innovations, change sourcing strategies, create common platforms, collaborate more with solutions providers, and prepare for lower car prices. EVs are “better vehicles,” he insists, and not just a response to climate change.
Apple Inc.’s foray into the mobile handset business nearly two decades ago dramatically changed the company’s fortune. It marked the beginning of the “software-defined phone,” and the beginning of Apple’s meteoric climb to the top of the global equity market.
Embattled Western auto manufacturers see some parallels in Apple’s experience in what is happening in the transportation sector, but they are also keenly aware that their own situation has become a struggle for survival rather than the mere start of a jump in value.
“When Steve Jos introduced the iPhone, phones became more expensive,” said Joachim Kahmann, senior vice president, purchasing for electric and electronics, at Stellantis, in a presentation at the Global Semiconductor Alliance (GSA) European Executive Forum, held earlier this month in Munich. “Vehicles cannot become more expensive. They must become more affordable again. That is absolutely mandatory.”
Read More »Automakers Seek Lessons in Apple’s iPhone Launch Feat
By Bolaji Ojo
What’s at stake:
Semiconductor makers perform better when production capacity utilization rates and the number of plants closely match customer demands. Those periods are getting fewer, however. Despite the proliferation of advanced demand-supply management tools, the industry continues to experience forecast distortions, especially in the number of semiconductor fabs needed to meet future demand. We describe the result as “MisCapex,” a condition of overestimating or underestimating capital expenditure requirements, leading to either bloated production or undercapacity. In either case, the remedies used so far by the industry continue to yield the opposite of desired objectives.
The semiconductor industry goes into a fab building frenzy every few years, driven by undercapacity that eventually leaves chipmakers dried out financially or swimming in the murk of excess inventories.
The last time this happened was only a few years ago.
Electronics companies reacted differently to the last bout of shortages. Some made plans to build more fabs while many others quietly watched the situation unfold, preferring to maintain their conservative capex planning. Today, companies in the latter category look prescient while others are dialing back on their commitments. Intel Corp., for example, is reviewing its capex commitments under new CEO Lip-Bu Tan and sharply cutting back expenses related to capital equipment and operations, including R&D.
In the face of more pressing and troubling issues, the semiconductor industry is trying hard to ignore its recent financial past. Yet, factors related to capital expenditure cannot be swept under the carpet because they are so fundamental to the health of the sector. The industry is finding itself locked in the grips of capex promises made at the height of the last supply shortages. Promises made to customers, consumers and even politicians will soon come back to haunt the industry. The Ojo-Yoshida Report is getting ahead of that Day of Reckoning by examining statements about and commitments to fab construction a few years ago and asking: Are the fabs promised during the last shortages still needed; How many of the fabs will be built and; how will chipmakers finance the ones they cannot walk away from?
Read More »Capex Malaise and ‘MisCapex’ Pains
Most business forecasts often turn out wrong, but analysts and companies keep churning them out. Are forecasts doing more damages than good in the electronics market?
By Bolaji Ojo
What’s at stake:
Lip-Bu Tan’s predecessor as Intel CEO wanted to build multiple new fabs in Europe and US. Chip equipment makers, fab shell builders, political leaders and communities were counting on the planned $100 billion-plus capex splurge. Will Intel revive Gelsinger’s dreams or were they so implausible from the beginning that it’s a risk Intel must avoid?
Lip-Bu Tan’s comments at his first analysts’ conference call as CEO at Intel Corp. included an indictment of the tenure of Patrick Gelsinger, his predecessor, and even some prior leaders of the chipmaker.
Tan didn’t mention any of Intel’s five past substantive CEOs – Gelsinger, Bob Swan, Brian Krzanich, Paul Otellini and Craig Barrett – by name. He may not have meant to indict these people, but the scathing verdict delivered by Tan about what Intel has become represents a condemnation of the company’s previous leadership.
“One of my biggest learning so far is that we need to fundamentally transform our culture and the way in which we operate,” Tan said. “Organizational complexity and bureaucracies have been suffocating the innovation and agility we need to win.” Intel had developed a “siloed” operating system,” Tan said. “I’m here to fix this.”
There is a lot hanging on Tan delivering that “fix.” For this report, though, we will focus on fabrication and process development plans made by his predecessor Gelsinger, who promised to help fabless chipmakers and governments in America and Europe resolve their dependence on semiconductor fabs based in Asia. During Gelsinger’s tenure, Intel announced plans to spend a range of $100 billion to $200 billion on new fabs and back-end processing facilities, most of them to be based in the United States. What will be the fate of Gelsinger’s promised fabs, the sites selected in Ohio, Magdeburg, Germany, and plans to help fund semiconductor education at community colleges in the United States?
Read More »Intel: Will Lip-Bu Tan Build Gelsinger’s Promised Fabs?
Renesas 365 is the next step in the digital transformation of electronics, bridging the gap between silicon and system development.
Nvidia had for years known that it has a massive and growing China problem, yet it persisted in developing products for the country, ignoring America’s apprehensions and warnings. The solution is to exit the country before it is driven out both by China itself and the United States.
