How Powerchip divides the work between the two sides of the Taiwan Strait

Source: Content from Economic Daily, thank you.

A blueprint for the division of labor between Powerchip Group's wafer fabs on both sides of the Taiwan Strait has emerged. The planned 12-inch new plant, which will cost NT$300 billion to build, will focus on the production of high-voltage process metal oxide field effect transistors (MOSFET), image sensors (CIS) and gene sequencing detection chips; the existing production capacity of Hsinchu Science Park will focus on the development of niche memory required for AI, the Internet of Things and network communications; and LCD driver ICs will be gradually transferred to Hefei, mainland China.

Huang Chongren, CEO of Powerchip Group, said that Powerchip intends to build a new 12-inch plant, and only after a detailed evaluation by the management team did they formally apply to the Hsinchu Science Park Administration. He stressed that Powerchip's existing production capacity in Hsinchu Science Park is almost full and there is no room for error, but many cooperation projects have come to Powerchip Group for cooperation, highlighting Powerchip's memory technology, which has been recognized by international manufacturers. If Powerchip does not set up a new plant at this time, within three years, it will miss many business opportunities.

He said that in addition to Bitmain and other large companies approaching Powerchip, there are also automotive semiconductor manufacturers who hope that Powerchip can use 12-inch factories to manufacture their currently out-of-stock MOSFETs; Japanese manufacturers have also revealed their needs to Powerchip to manufacture image sensors for them, and the rest include gene sequencing detection chips used in the biotechnology field. If Powerchip does not build a new 12-inch factory, it will inevitably squeeze the production capacity of existing memory foundry customers, which is not conducive to the long-term development of the Powerchip Group.

Huang Chongren also released the blueprint for the division of labor of the Powerchip Group's wafer fabs. He said that the new 12-inch plant in Tongluo will be completed and put into use in three years, and Powerchip will concentrate all customer orders such as logic, imaging and biotech chips here for production; the Hsinchu Science Park production line will focus on developing memory foundry, which is in response to the advent of the AI ​​and Internet of Things era. The demand for this part has grown significantly, and the visibility of orders is getting higher and higher.

He emphasized that in addition to niche memory, Powerchip has also completed 4x nanometer process technology encoding flash memory (NOR Flash) and 2x nanometer process SLC storage flash memory (NAND Flash) technology.

Bitmain, the world's leading cryptocurrency mining machine manufacturer, has expanded its cooperation with Taiwanese manufacturers. In addition to continuing to place orders for application-specific integrated circuits (ASICs) from TSMC, it has also formed a strategic alliance with Powerchip Group for the first time. Powerchip's memory designer, AIPU, will provide all of Bitmain's mining machines and the memory needed to develop AI.

Bitmain has agreed with Powerchip Group that starting from July this year, all the memory needed by Bitmain will be provided by AP and manufactured by Powerchip. The industry believes that memory is a key component for the development of AI. Bitmain's alliance with Powerchip Group shows that in this wave of AI craze, Bitmain has seized the opportunity and secured the most critical memory supply.

Huang Chongren, CEO of Powerchip Group, confirmed the cooperation plan. It is expected that starting from next quarter, AP will first ship all the niche memory required for Ethereum mining machines to Bitmain. Initially, the two parties agreed that Powerchip will provide 10,000 pieces of production capacity per month for AP to meet Bitmain's needs.

As for the memory used for subsequent AI, it is still confidential and cannot be disclosed to the public for the time being.

Huang Chongren emphasized that a formal contract will be signed with Bitmain in the near future, which highlights the strength of Powerchip Group in customized memory manufacturing and has been recognized by international first-tier manufacturers. It also proves that the cryptocurrency craze is just the beginning of AI applications. There will be more AI product applications in the future. With the birth of the fifth-generation mobile communications (5G) commercialization, the demand for niche memory has continued to increase.

It is understood that Bitmain co-founder Zhan Ketuan is planning to come to Taiwan to sign this strategic cooperation contract with Powerchip Group. This is another landmark action of cooperation with Taiwanese major manufacturers after Bitmain began to produce Bitcoin mining machine chips at TSMC three years ago.

The industry believes that Bitmain has rushed into the rapidly growing AI field, expanded cooperation with Taiwanese manufacturers, and taken the lead in booking key memory production capacity. It is worth paying close attention to whether other major manufacturers will subsequently rush into cooperation with memory manufacturers such as Nanya Technology and Winbond Electronics.

In addition to developing Bitcoin, Bitmain has also been focusing on its Ethereum business. Among them, the cryptocurrency mining machine chips outsourced to TSMC were officially mass-produced and delivered at TSMC's Nanjing plant last month with 16 nanometers. Other more advanced high-speed computing chips with a chip size of less than 10 nanometers are also being produced at TSMC.

Although Bitmain has received production capacity support from TSMC, it is suffering from a shortage of DRAM. In order to solve the problem of needing more DRAM supply for Ethereum mining machines and the need for stable DRAM production capacity support for the launch of AI products such as image recognition servers in the future, Bitmain sent senior executives to Taiwan intensively last month to negotiate with Powerchip Group. The two parties finalized an alliance, with all supplies to be provided by AP Powerchip Group. Powerchip Group has also launched further new factory expansion plans for this purpose.

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