Core Viewpoint - TSMC is exiting the GaN foundry business and restructuring its wafer fabs to optimize operations and reduce costs, while focusing on advanced packaging and internal development of EUV mask protection films [2][4][6]. Group 1: TSMC's Strategic Moves - TSMC will close its 6-inch GaN foundry in Hsinchu Science Park within two years and integrate its three 8-inch fabs to address labor shortages and improve asset utilization [2]. - The 6-inch fab will be repurposed for CoPoS advanced packaging, while the 8-inch fabs will focus on internal production of EUV mask protection films to reduce reliance on ASML and its supply chain [4]. - TSMC's investment in advanced process nodes has been significant over the past decade, but the high costs associated with EUV technology are prompting a shift in strategy to enhance yield and cost efficiency [4]. Group 2: Importance of Mask Protection Films - EUV technology requires new mask and protection film methods, as traditional organic films lack the necessary transparency and stability for EUV processes [5]. - TSMC's proprietary protection films are expected to optimize workflows, improve yields, expand capacity, and reduce costs, thereby enhancing profitability and maintaining its competitive edge [5]. - The transition to in-house mask protection film development is crucial for TSMC as it moves towards 2nm processes and expands CoWoS packaging technology [5]. Group 3: Market Dynamics and Competition - The exit from the GaN sector highlights intense price competition from Chinese competitors in the third-generation semiconductor market [6]. - Global IDM manufacturers, including Texas Instruments and Infineon, are also expanding their internal GaN capacities, indicating a growing focus on this technology [6].

Core Insights - The article discusses significant developments in the semiconductor industry, highlighting investments, policy changes, and market trends that could impact future growth and competition in the sector. Group 1: Investment and Policy Initiatives - Shenzhen has established a semiconductor and integrated circuit investment fund with a total scale of 5 billion yuan to support the optimization and quality improvement of the industry chain [5] - Shanghai has implemented joint support policies for key industrial chains, including integrated circuits and aerospace, to accelerate the cultivation of these sectors [5] - Hong Kong has approved the construction of its first 8-inch silicon carbide wafer factory, marking a significant step in semiconductor manufacturing [5] Group 2: Market Trends and Projections - South Korea's semiconductor exports increased by 11.6% year-on-year in June, reaching a record high of $14.97 billion [7] - The U.S. Senate has passed a tax bill that could increase tax credits for semiconductor companies building new factories from 25% to 35% [8] - By 2030, mainland China is projected to surpass Taiwan and become the largest semiconductor wafer foundry center globally, capturing 30% of the total installed capacity [8] Group 3: Company Developments - TSMC is reportedly planning to cease production on its GaN production line to focus on advanced packaging [6] - Samsung's semiconductor division is expected to report a 39% drop in operating profit for Q2 due to delays in supplying advanced memory chips to Nvidia [11] - The bankruptcy review application for the advanced packaging equipment company, Paixin Semiconductor, has been filed, indicating financial distress [9][10] Group 4: Technology and Innovation - Tokyo University has developed a new gallium-doped indium oxide crystal material that could replace silicon, enhancing performance in AI and big data applications [19] - The upcoming LPDDR6 memory is set to be mass-produced by Samsung in late 2025, with Qualcomm as the first adopter [19] Group 5: Market Analysis - TrendForce reports that the price of 16Gb DDR4 DRAM chips continues to rise, while PC-grade DRAM prices are losing momentum [16] - CFM forecasts that LPDDR4X prices will increase by over 20% in Q3 2025, while LPDDR5X prices will see slight increases [17]