Intel’s packaging plans and a giant step for India

Hi everyone! This is Lauly from Taipei.

August is drawing to a close and I hope you all have had a nice summer so far. The weather in Taipei lately is really changeable, with scorching heat in the morning and sudden thunderstorms in the afternoon. It makes going out for reporting a bit harder, but at least the temperature is a little more bearable.

Speaking of reporting, I recently went to the Taiwanese chip hub of Hsinchu with my colleague Annie Cheng Ting-Fang to meet with a longtime industry source. We arrived on time but our source wasn’t there, and no matter how we tried — Line messages, iMessages, phone calls — we couldn’t get hold of him. After waiting for more than one hour, we decided to head back to Taipei before the thunderstorms began. We thought he must have been dragged into a sudden meeting.

We were half-right. He texted me in the evening to apologise for not showing up. It turned out that around noon that day, one of his company’s clients, a contract chipmaker, encountered a problem with a chip production tool and he was called in to the plant to help solve the issue immediately.

Because it’s a normal practice to hand over mobile devices when entering a chip fab, he wasn’t able to let us know what had happened until hours later.

A week later, I asked him if everything was resolved. He replied at around 1am: “I just got home from work. It’s OK. It is just a normal day for the chip industry.”

I thought I knew a bit about the work culture in Taiwan’s chip industry. But every time I hear stories like this, it still shocks me how challenging such work really is.

The whole package

Intel aims to quadruple its advanced chip packaging capacity by 2025, Nikkei Asia’s Cheng Ting-Fang reports from Penang, Malaysia. The capacity expansion plan includes Intel’s first overseas facility for advanced 3D chip packaging, what it calls Foveros technology, in Penang.

The US chipmaker says Malaysia will eventually become its largest production base for advanced 3D chip packaging.

Intel is also building an additional chip assembly and testing factory in Kulim as part of its $7bn expansion in the south-east Asian nation.

In advanced chip packaging, different types of chips are combined into one package to increase computing capability and lower power consumption. Intel’s 3D chip packaging technology is currently developed primarily in the US state of Oregon and its major production base is in New Mexico. The company plans to spend a total of more than $10bn on this area in New Mexico and Malaysia over the next decade.

Taiwan Semiconductor Manufacturing Co, the world’s biggest contract chipmaker, and Samsung Electronics are also pursuing advanced chip packaging technologies.

This area of production was previously viewed as less crucial and less technologically demanding than chip manufacturing itself. It has emerged as a key battleground in the race to produce ever more powerful chips as the conventional approach — squeezing more transistors into a smaller area — becomes more difficult.

This year’s generative AI boom has further intensified interest in advanced chip packaging.

Arm alarm

Arm’s much-awaited prospectus for an initial public offering in New York has raised alarm among investors after the British chip designer revealed it made a quarter of its revenues from China, a business that neither Arm nor SoftBank controls.

The listing of SoftBank-owned Arm is set to be the biggest in the US in almost two years and to provide a boost to the flagging Japanese investor and to a depressed IPO market, write the Financial Times’ Leo Lewis and Kana Inagaki in Tokyo, Ryan McMorrow in Beijing, Qianer Liu in Hong Kong and Tim Bradshaw in London.

But managers at four funds that had been considering investing in Arm told the Financial Times that their initial enthusiasm for the IPO was damped after the company disclosed what one described as its “pretty big China risks”.

Arm has no direct management oversight of its China business, which holds exclusive rights to distributing the chip designer’s intellectual property to Chinese customers. The prospectus has “a lot for an investor to digest”, said the fund manager.

Back to basics

China’s Alibaba Group Holding is refocusing on ecommerce in an effort to revive earnings, tapping content creators and cheap prices to compete in an increasingly crowded domestic market, writes Nikkei’s Tomoko Wakasugi.

“We will continue to invest heavily in developing content around shopping, consumption and daily life,” Trudy Dai, CEO of Alibaba’s core ecommerce business Taobao Tmall Commerce Group, said on an August 10 earnings call.

Alibaba’s push comes in response to the rise of Douyin, the Chinese version of TikTok, and Xiaohongshu, a similar platform to Instagram. These apps have taken advantage of user engagement to branch out into ecommerce and other services, gaining particular momentum among younger consumers.

Douyin users on average spend 133 minutes on the app per day, according to China’s Moonfox Data. The figure for Taobao is just 28 minutes. Alibaba hopes that a greater focus on content will bring users to the app even when they are not shopping, bolstering its competitive edge.

Over the moon

India made history on Wednesday when its spacecraft touched down near the moon’s south pole. India is the first country in the world to land near this unexplored part of the moon and only the fourth to reach the lunar surface at all, Nikkei Asia’s Kiran Sharma writes.

“We have achieved soft-landing on the moon. India is on the moon,” S. Somanath, chief of the Indian Space Research Organisation’s Chandrayaan-3, confirmed as applause erupted in the control room.

Only the US, the former Soviet Union and China have achieved soft landings on Earth’s closest celestial body.

Success for India came on its third attempt, and the build-up to the moment of touchdown was intense as just days earlier a Russian spacecraft crashed into the lunar surface while attempting to land.

Such failures are not rare. An Indian attempt in 2019 failed minutes before touching down on the moon due to a software glitch, while Israel and Japan fell short in their own efforts in 2019 and 2022, respectively. In April this year, Japanese private space company iSpace was unable to place a United Arab Emirates rover on the lunar surface.

Suggested reads

1. Demand for used chip equipment surging since Covid: Moov CEO (Nikkei Asia)

2. China ties become a fundraising hurdle for start-ups in the US (Nikkei Asia)

3. Supply chain shortages delay tech sector’s AI bonanza (FT)

4. Why China remains hungry for AI chips despite US restrictions (FT)

5. Global semiconductor investment dips for first time in 4 years (Nikkei Asia)

6. India to expand digital payments with AI-powered voice transactions (FT)

7. Thailand energy group PTT to make e-motorbikes with Taiwan’s Kymco (Nikkei Asia)

8. SoftBank deal with Vision Fund values Arm at $64bn ahead of IPO (FT)

9. Rivals Samsung, LG team on OLED TVs to fend off Chinese players (Nikkei Asia)

10. Top Google AI experts pick Japan to set up on their own (FT)

#techAsia is co-ordinated by Nikkei Asia’s Katherine Creel in Tokyo, with assistance from the FT tech desk in London.

Sign up here at Nikkei Asia to receive #techAsia each week. The editorial team can be reached at [email protected].