Daily: CXMT and others on U.S. blacklist
6 min read.
Highlights
CXMT and others on US blacklist. The Trump administration may add several more Chinese semiconductor companies onto a Commerce Dept blacklist. Among the companies is CXMT, which regular readers will know that I have discussed frequently as one of the fast-rising memory chip players that isn’t getting enough attention. If this happens, it would be good news for market incumbents Samsung, SK Hynix, and Micron.
Proposal to track chips. A bipartisan group of U.S. lawmakers proposed a new bill to track Nvidia’s AI chips to ensure compliance. Nvidia is likely unhappy about this but it is probably better for their revenue than the AI Diffusion Rule, which was more comprehensively restrictive.
AMAT’s China rev slips. There’s been varied commentary about Applied Materials’ latest earnings report. Revenue slightly missed expectations and their China revenue seems to be slipping. The company reassured investors that demand remains steady but the future looks a little bleaker than that, especially if/when the Trump admin imposes semiconductor-specific tariffs and the other tariffs (10%+) flow onto the chip industry too. The effects will likely manifest more in this next quarter.
Thanks for reading.
1. Policy and Geopolitics
1.1
FT (05/16): Trump administration considers adding Chinese chipmakers to export blacklist
The Trump administration plans to put a number of Chinese chipmaking companies on an export blacklist, but some officials want to delay the move to avoid hurting efforts to strike a long-term trade agreement with China.
The commerce department has compiled a list of Chinese companies — including memory chipmaker ChangXin Memory (CXMT) — to add to the “entity list,” according to five people familiar with the matter.
Several of the people said the Bureau of Industry and Security, the commerce department arm that oversees export controls, had drafted a list that also includes the subsidiaries of Semiconductor Manufacturing International Corp, China’s biggest chipmaker, and Yangtze Memory Technologies Co, its largest memory chipmaker. SMIC and YMTC are already on the list.
But the timing of the move has been complicated by the trade deal agreed by China and the US in Geneva at the weekend to slash reciprocal tariffs for 90 days to help reach a broader trade deal.
1.2
Reuters (05/16): U.S. lawmakers introduce bill to address AI chip smuggling
A bipartisan group of eight U.S. lawmakers introduced a bill on Thursday that would require makers of artificial intelligence chips such as Nvidia to include technology to verify the location of their chips before exporting them.
The Chip Security Act introduced in the U.S. House of Representatives aims to address reports of U.S. export-controlled AI chips being smuggled into China. U.S. officials across presidential administrations have sought to clamp down on their export to China, but Reuters and other news organizations have documented how some of those chips have continued to flow.
1.3
TrendForce (05/16): Vietnam’s Semiconductor Packaging & Testing Industry Picks up Steam
Phase II of CT Semiconductor’s Packaging and Testing Plant Underway
As per Vietnam’s published semiconductor development strategy, the country has set specific goals for 2030 and 2050. By 2030, Vietnam aims to establish at least 100 chip design companies, one small-scale semiconductor manufacturing plant, and ten packaging and testing factories. The target is for the semiconductor industry to generate over USD 25 billion in annual revenue, and the electronics sector to achieve over USD 225 billion. By 2050, the goal is to have at least 300 chip design companies, three semiconductor manufacturing plants, and twenty packaging and testing facilities, with the semiconductor industry expected to deliver an annual revenue of more than USD100 billion.
The plan incorporates both foreign-funded and domestic factory development. On the domestic side, it’s reported that CT Semiconductor, a subsidiary of Vietnam’s CT Group, has begun construction on Phase II of its semiconductor packaging and testing plant in Thuan An City, Binh Duong Province. The plant is scheduled to begin operations in 4Q25 and aims to produce 100 million chips annually by 2027.
1.4
Reuters (05/15): India approves HCL-Foxconn joint venture semiconductor unit
India's cabinet has approved a new semiconductor plant, a joint venture between HCL Group and Taiwan's Foxconn, costing 37.06 billion rupees ($435 million), information minister Ashwini Vaishnaw said on Wednesday.
The plant, which will be located near the Jewar airport in the northern state of Uttar Pradesh, is designed for a capacity of 20,000 wafers per month and can produce 36 million display driver chips, Vaishnaw said at a cabinet briefing in New Delhi.
The facility, which is the sixth plant approved under the India Semiconductor Mission, will begin commercial production in 2027, he added.
2. Economy, Finance, and Business
2.1
WSJ (05/15): Applied Materials Results Show Customer Demand Remains Unchanged
Applied Materials reported higher profit and revenue in the latest quarter as demand for its semiconductor equipment remains stable.
The Santa Clara, Calif., company on Thursday posted a profit of $2.14 billion, or $2.63 a share, compared with $1.72 billion, or $2.06 a share, a year earlier.Adjusted earnings per share were $2.39, ahead of estimates of $2.31 a share according to analysts polled by FactSet.
Revenue rose 7%, to $7.1 billion. Analysts expected $7.13 billion.
2.2
Bloomberg (05/16): TSMC Supplier GlobalWafers to Hike US Investment to $7.5 Billion
Taiwanese chip materials maker GlobalWafers Co plans to raise its investments in the US to $7.5 billion, sating increasing demand as President Donald Trump tries to boost advanced manufacturing at home.
The supplier to Taiwan Semiconductor Manufacturing Co. is more than doubling its investment by $4 billion from a prior commitment, according to a statement on Friday. The company held an opening ceremony for its first factory in Sherman on Thursday.
2.3
Bloomberg (05/15): OpenAI Grows CoreWeave Tie-Up With New $4 Billion Cloud Deal
CoreWeave Inc. has secured a deal worth as much as $4 billion to provide additional cloud computing capacity to artificial intelligence leader OpenAI, expanding a tie-up between the two firms.
The data center builder said in a filing Thursday that OpenAI will pay the sum through 2029. CoreWeave had disclosed a $4 billion deal on its earnings call late Wednesday but did not name the party, beyond describing it as an enterprise AI company.
Shares of CoreWeave rose as much as 8% in trading Thursday, reversing earlier declines. CoreWeave was up 69% through market close Wednesday after overcoming early jitters following its public market debut in March.
2.4
Reuters (05/15): ASM to pass on tariff costs to buyers, says no disadvantage against peers
Dutch chip-making equipment supplier ASM International plans to pass on any cost increases related to tariffs to its value chain, including customers, its CEO and finance chief told Bank of America in a meeting, a report on the analysts' takeaways showed on Thursday.
Europe's second-largest supplier of semiconductor equipment said that thanks to its manufacturing flexibility, it "won't be at a disadvantage compared to competitors", the note distributed by the bank reads.
3. Technology
3.1
TrendForce (05/15): TSMC to Build 9 Facilities in 2025, Sub-2nm Production Set for Taichung by 2028
Amid tariff pressures, TSMC is ramping up new capacity both at home and overseas. According to CNA and MoneyDJ, the foundry giant plans to build nine new facilities in 2025—eight fabs and one advanced packaging plant—across its global footprint.
Most of the newly added capacities will feature 2nm and more advanced nodes, as highlighted by the reports. Notably, the reports suggest that Fab 25 in Taichung is set to break ground by year-end and begin producing chips more advanced than 2nm by 2028.
In addition, TSMC plans to build five fabs in Kaohsiung, Southern Taiwan, supporting 2nm, A16, and future leading-edge nodes, as per CNA.
3.2
TechCrunch (05/15): Cognichip emerges from stealth with the goal of using generative AI to develop new chips
Cognichip has a lofty goal of creating a foundational AI model that can help bring new chips to market faster.
San Francisco-based Cognichip is working to build a physics-informed foundational AI model that can be used by semiconductor companies to speed up the development process of new chips. The company is calling this approach “artificial chip intelligence” and hopes it can help speed up chip production times by 50% and reduce the associated costs as well.
This ambitious idea comes from semiconductor industry veteran Faraj Aalaei, who worked at various companies including Fujitsu Network Communications and Centillium Communications.