DELIVERCHIP（HK）LIMITED— 29 April: This Week’s News

Highlights of the Week

1. ASE commits to achieving net-zero emissions by 2050 and establishes a low-carbon supply alliance

2. SK Hynix plans to invest approximately 20 trillion won to build new memory chip production capacity

3. TSMC estimates earthquake-related losses of approximately NT$3 billion in the second quarter

4. ASML: Mainland China remains the largest market, accounting for 49 per cent of system sales in Q1

ASE Commits to Net-Zero Emissions by 2050 and Establishes Low-Carbon Supply Alliance

On 22 April, ASE, a leading semiconductor packaging and testing manufacturer, committed to achieving net-zero emissions by 2050 and set a target to reduce ‘three carbon’ emissions by 15 per cent by 2030. ASE also announced the formation of the ‘Low-Carbon Supply Alliance’ in collaboration with its supply chain, as part of its action plan in response to Earth Day 2024.

ASE stated that the establishment of this alliance will boost the industry’s momentum in reducing carbon emissions to effectively address the challenges of climate change. ASE’s Kaohsiung plant, in collaboration with 14 suppliers, is participating in the “ASE Semiconductor Sustainable Supply Chain Upgrading and Transformation Programme”, which encompasses low-carbon semiconductor packaging technologies, the introduction and optimisation of low-carbon semiconductor process equipment, and carbon management and initiatives within the sustainable supply chain. Through this programme, carbon emissions are expected to be reduced by 17,000 metric tonnes.

ASE also announced that its Kaohsiung plant has established an academic platform in collaboration with local schools to promote the online sharing of ESG (Environmental, Social and Governance) courses. This platform is expected to engage over 150 supply chain partners, accelerating the transition towards reduced carbon emissions across the supply chain.

SK Hynix plans to invest approximately 20 trillion won to build new memory chip production capacity

SK Hynix plans to invest approximately 20 trillion won (around US$14.6 billion) to build new memory chip production capacity in South Korea. This major capacity expansion is aimed at meeting the rapidly growing demand driven by the development of artificial intelligence (AI).

SK Hynix will allocate an initial investment of 5.3 trillion won and commence construction of the new wafer fab at the end of April, with completion scheduled for November 2025. SK Hynix stated that, with ongoing construction in the future, the total investment in the facility will exceed 20 trillion won.

SK Hynix is set to announce its quarterly results this Thursday (25 April); the company is currently supplying High Bandwidth Memory (HBM) specifically tailored for artificial intelligence. HBM is a key component of AI chips, and SK Hynix leads its competitor Samsung Electronics in the HBM chip sector.

On 19 April, SK Hynix announced that it would work closely with TSMC on the production of next-generation HBM products and the enhancement of advanced packaging technologies to integrate HBM with logic layers; the two companies signed a Memorandum of Understanding (MOU). SK Hynix plans to collaborate with TSMC on the development of HBM4, the sixth-generation HBM product, which is expected to enter mass production in 2026.

In early April, SK Hynix also announced plans to invest US$3.87 billion in the construction of an advanced packaging plant and an artificial intelligence product research centre in Indiana. The facility will focus on establishing next-generation HBM production lines, with mass production scheduled to commence in the second half of 2028.

TSMC estimates earthquake-related losses in the second quarter at approximately NT$3 billion

TSMC’s Taiwan facilities were fully restored by the end of the third day following the earthquake. The company stated that there were no power cuts at the fabs, no structural damage, and no damage to critical equipment such as extreme ultraviolet (EUV) lithography systems. Whilst a certain number of wafers in production were affected by the earthquake, TSMC expects the majority of production losses to be recovered in the second quarter; consequently, the impact on second-quarter revenue is expected to be minimal. The overall impact of the earthquake is expected to reduce the second-quarter gross margin by approximately 50 basis points, primarily due to losses related to wafer scrap and material wastage. TSMC’s full-year financial outlook, denominated in US dollars, remains unchanged from the forecast provided at the January investor conference, with full-year revenue expected to grow by a low to mid-twenties percentage point range. Preliminary estimates indicate that the company will recognise earthquake-related losses of approximately NT$3 billion in the second quarter of this year, net of insurance claims.

TSMC’s announcement noted that the company possesses extensive experience and capabilities in earthquake response and disaster prevention, and conducts regular safety drills to ensure thorough preparedness. Within just 10 hours of the earthquake on 3 April, the recovery rate of wafer fab equipment exceeded 70 per cent, whilst that of newly constructed fabs (such as Fab 18) exceeded 80 per cent. Thanks to the joint efforts of TSMC’s staff and supplier partners, the company’s Taiwan facilities were fully restored by the end of the third day following the earthquake. At the same time, the company has maintained close contact with customers and provided timely updates on the relevant impacts.

ASML: Mainland China Remains Largest Market, Accounting for 49 per cent of Q1 System Sales

ASML announced its first-quarter financial results on 17 April, showing that the company’s first-quarter revenue was €5.3 billion, with a gross margin of 51.0 per cent and a net profit of €1.2 billion. ASML stated that Mainland China remains its largest market, accounting for 49 per cent of first-quarter system sales.

By contrast, the proportion of system sales from Taiwan fell by more than half, dropping from 13 per cent in the fourth quarter of 2023 to 6 per cent, whilst the US accounted for 6 per cent, down 5 percentage points from the previous quarter.

The Biden administration urged the Dutch government to impose restrictions on exports of ASML’s immersion DUV lithography systems to mainland China with effect from 1 January. ASML is not permitted to sell its most advanced extreme ultraviolet (EUV) lithography systems to mainland China, but first-quarter sales indicate that demand for mainstream lithography systems remains strong.

ASML CEO Peter Wennink said in an interview last year: “The more pressure is put on mainland China, the more likely they are to redouble their efforts to innovate.”

ASML forecasts that up to 15 per cent of its sales to mainland China this year will be hampered by export control measures. Nevertheless, ASML’s Chief Financial Officer, Roger Dassen, stated during an investor conference call following the release of the financial results that demand from mainland China is expected to remain “strong” for the remainder of the year.

All news in this article is sourced from the internet.