Daily: China's technology; TSMC's AZ fabs; DDR4 phasing out
6.5 min read.
Apologies for missing yesterday’s newsletter. I was travelling internationally. The good news is that I am now based in sunny Singapore.
Highlights
China’s technology. China courting international media, including Bloomberg among others, on how far domestic technology has progressed despite limitations on US chips. China is also focusing its so-called Big Fund III, the third instalment of a state-backed semiconductor investment fund, into chipmaking tools.
On the flip side, DeepSeek is reportedly struggling to develop its R2 reasoning model (the sequel to its R1 model, which shook the industry this January), due to a lack of Nvidia AI chips.
TSMC’s AZ fabs. TSMC to fast-track fab production in Arizona, which is expected to include more advanced nodes, including 4nm and 3nm.
UMC, Taiwan’s second largest foundry after TSMC, is also venturing into cutting-edge chips, potentially 6nm.
DDR4 phasing out. DDR4, an older DRAM model, doubles in price as Chinese memory maker, CXMT, is preparing to phase out the model mid-2026. This comes as other big memory players including Samsung, SK Hynix, and Micron, are preparing to phase out by year end.
Thanks for reading.
1. Policy and Geopolitics
1.1
Bloomberg (06/30): China Shows Off Tech Resilience in Face of Trump Export Controls
As Donald Trump brandishes US export controls on technology as a bargaining chip to wrest supplies of rare earth magnets from Beijing, China is showcasing what it can do without the most advanced American semiconductors.
On a government-organized trip this month to Jiangsu and Zhejiang, two of China’s richest provinces that spawned AI darling DeepSeek, authorities lined up a host of executives from technology companies to meet with journalists from Bloomberg News and other media outlets. The message was ultimately one of defiance: China’s technology sector still aims at world dominance despite US curbs.
Take Magiclab Robotics Technology Co., a firm in the eastern city of Suzhou founded barely more than a year ago. Its president, Wu Changzheng, said it had independently developed more than 90% of the parts it uses to make humanoid robots. The rest consists of semiconductors and micro-controller units procured domestically and overseas, he said, adding that they don’t use US chips.
1.2
Bloomberg (06/27): China’s $50 Billion Chip Fund Switches Tack to Fight US Curbs
China’s main chip investment fund is planning to focus on the country’s key shortcomings in sectors like lithography and semiconductor design software, adjusting its approach to better overcome US efforts to stop its technological advances.
The third phase of the state-backed National Integrated Circuit Industry Investment Fund, better known as Big Fund III, will focus on backing local companies and projects in areas considered bottlenecks to technological advances, people familiar with the matter said. That includes lithography systems, where Dutch firm ASML Holding NV dominates, and chip design tools, an arena controlled by US companies Cadence Design Systems Inc. and Synopsys Inc.
The new vehicle has so far secured only a portion of the 344 billion yuan ($48 billion) of capital it originally sought when first created more than a year ago as Beijing is being more cautious with its semiconductor bets, according to the people, though the shortfall should be temporary. The Big Fund III plans to hold its investments for a longer period compared to the two previous phases, they said, declining to be named discussing a private government initiative.
1.3
Bloomberg (06/27): Tokyo Electron Shrugs Off Fears of Chinese Rivals Catching Up
Tokyo Electron Ltd. is on course to widen its lead against Chinese chip tool makers despite the billions of dollars Beijing is mobilizing to catch up, according to the Japanese company’s chief.
Toshiki Kawai shrugged off concerns about rising competition from China, adding that investors haven’t adequately priced in Tokyo Electron’s leadership in making machines that help process silicon into artificial intelligence chips. Technology at the Japanese company, whose main competitor is Applied Materials Inc., is advancing at a pace that’s faster than its Chinese rivals’, due in part to close collaboration with contract chipmakers, the chief executive officer said.
2. Economy, Finance, and Business
2.1
TrendForce (06/30): TSMC’s 2nd Arizona Fab Reportedly to Install 3nm Gear in 3Q26, U.S. Price Hikes Likely over 10% Next Year
As part of its fast-tracked U.S. expansion, TSMC’s second Arizona fab (P2) is set to begin equipment installation as early as Q3 2026, with mass production slated for 2027, according to Commercial Times.
The report highlights TSMC’s push to compress construction into just two years, with the supply chain anticipating an even faster timeline to meet customer demand and navigate U.S. tariffs. Notably, analysts cited in the report also expect TSMC to raise wafer prices by another 3–5% in 2026 to offset rising construction costs, with price hikes at U.S. fabs potentially exceeding 10%.
TSMC Chairman C.C. Wei revealed that while the first Arizona fab centers on 4nm production, the second will advance to 3nm. The third and fourth fabs are set to push even further, featuring cutting-edge nodes like N2 and A16, Wei stated.
2.2
Nikkei (06/30): Taiwan's No. 2 chipmaker UMC eyes entering cutting-edge race
Taiwan's second-largest contract chipmaker, United Microelectronics Corp., (UMC) is assessing the feasibility of venturing into cutting-edge chip production, a segment dominated by TSMC, Samsung and Intel, Nikkei Asia has learned.
UMC is exploring future growth drivers, four people said, including potentially 6-nanometer chip production, which is suitable for making advanced connectivity chips for Wi-Fi, radio frequency and Bluetooth, AI accelerators for various applications and core processors for TVs and cars.
2.3
Bloomberg (06/28): TSMC Affiliate VIS May Expedite Production at $8 Billion Singapore Fab
Taiwan Semiconductor Manufacturing Co.’s smaller affiliate Vanguard International Semiconductor Corp. may accelerate the chip production schedule at its new $7.8 billion joint venture in Singapore on greater customer demand for hedging against geopolitical risks.
VIS may be able to push production at the new plant, which makes mature chips, to as soon as late 2026 versus the originally announced schedule of the first half of 2027, VIS Chairman Fang Leuh told reporters at a company event on Saturday in Taoyuan, Taiwan. VIS broke ground for the facility in the fourth quarter of 2024.
VIS’s new plant is a joint venture with Dutch firm NXP Semiconductors NV. While the Taiwanese company does not make the most cutting-edge AI chips, it is a key supplier in making chips for automotive and industrial use.
2.4
Nikkei (06/28): DRAM spot prices double on reports of China DDR4 phaseout
Prices of benchmark 8-gigabit DDR4 modules have doubled over the past month following a Taiwanese media report that leading Chinese maker ChangXin Memory Technologies (CXMT) is preparing to phase out DDR4 production by mid-2026. This has fueled anticipation of a tighter supply worldwide.
2.5
Reuters (06/27): Intel's top strategy officer to depart this month
Intel's top strategy executive, Safroadu Yeboah-Amankwah, is departing the company, the latest change since Lip-Bu Tan took the chipmaker's helm in March, two people familiar with the matter told Reuters.
2.6
Bloomberg (07/01): Struggling Semiconductor Firm Wolfspeed Files for Bankruptcy
Wolfspeed Inc., a chipmaker caught in President Donald Trump’s push to reshape Biden-era tech subsidies, filed bankruptcy to enact a creditor-backed plan to slash $4.6 billion in debt.
The North Carolina-based company filed petitions for reorganization under Chapter 11, according to a statement released on Monday. It expects to emerge out of bankruptcy by the end of the third quarter, it said.
3. Technology
3.1
Reuters (07/01): OpenAI says it has no plan to use Google's in-house chip
OpenAI said it has no active plans to use Google's in-house chip to power its products, two days after Reuters and other news outlets reported on the AI lab's move to turn to its competitor's artificial intelligence chips to meet growing demand.
A spokesperson for OpenAI said on Sunday that while the AI lab is in early testing with some of Google's tensor processing units (TPUs), it has no plans to deploy them at scale right now.
3.2
TrendForce (06/30): China Made Breakthrough in Ultra-Highly Parallel Optical Computing Integrated Chip
Recently, the Shanghai Institute of Optics and Fine Mechanics (SIOM) achieved a breakthrough in ultra-highly parallel optical computing integrated chip. The research team led by Researcher Xie Peng from the Aerospace Laser Technology and Systems Division made significant progress in overcoming the challenge of high-density parallel information processing on photonic chips.
They developed an ultra-highly parallel optical computing integrated chip—Meteor-1—and successfully demonstrated a photonic computing prototype system with a parallelism level exceeding 100.
3.3
FT (06/29): Inside the British lab growing a biological computer
In a laboratory outside Cambridge sits a remarkable “biological computer”. Its 200,000 human brain cells, grown in the lab, lie on silicon circuitry that communicates their synchronised electrical activity on a screen to the outside world.
The CL1 device, about the size of two shoe boxes, was developed by Australian start-up Cortical Labs with the UK’s bit.bio, in a bid to create “synthetic biological intelligence” — a new form of computing that could offer opportunities beyond conventional electronics and other developing technologies such as quantum.
The fast-growing search for alternatives to energy-intensive conventional electronics has stimulated the new field of biological computing, which aims to tap directly into the intelligence of brain cells rather than simulating it in silicon through “neuromorphic” processing and AI.
-