03-04-2021 | | By Sam Brown
This week, Intel has decided to commit to manufacturing devices, the State of Texas proposes to Samsung, and manufacturing plants in Austin restart.
Recently, Intel has suffered multiple delays to its product lines as a result of struggling to manufacture the next-generation semiconductor devices. As intel struggles to break the single-digit nanometer feature size, its competitors such as TSMC already produce 7nm devices, and its CPU competitor AMD has already taken the lead with its devices.
Intel’s struggle with next-generation semiconductor devices saw some of its investors urge Intel to become a fabless company and sell off its manufacturing division. However, Intel has announced that it will be spending $20 billion to build two new semiconductor foundries in Arizona. While many believe this may be a bad move for Intel, it could suggest that Intel have solved whatever manufacturing problems it faced, and therefore can now move on with producing devices.
Intel also announced that not only will it do everything it can to manufacture all of its own devices, it will also be looking to manufacture devices for other companies. The new service, called Intel Foundry Services, demonstrates how Intel is determined to stay in the semiconductor business.
Recently, Samsung approached the state of Texas with a list of demands including tax breaks for long-term growth and development. The chief accountant of Texas has now responded to Samsung Electronics with a counterproposal that offers at least $285 million in tax breaks for the next 15 years. This tax break is in property tax and does not make mention of any other demands from Samsung, but it does show that Texas is interested in Samsung Electronics setting up shop locally.
The demands from Samsung Electronics called for $1 billion in tax breaks for 20 years which is more than what Texas is currently offering. However, if Samsung Electronics agrees to the deal, it will be immediately formalised, but currently, there has been no comment from Samsung regarding the deal. It is more likely that the two sides will negotiate on terms more before agreeing, but as Samsung has not outright declined the deal suggests that careful consideration is being given.
The snowstorm of 2020/2021 in Texas resulted in a major loss of services to thousands of homes and businesses. However, the semiconductor industry was also hit harshly by the outages of power, water, and gas, and the resulting blackout caused many semiconductor foundries to close their doors.
Now that services are being restored, businesses are resuming operation, and homes are once again becoming habitable, but the semiconductor industry will not be able to recover as quickly. Unlike many manufacturing lines, if services to a semiconductor plant are lost then devices currently being fabricated can be ruined and have to be remade from scratch. To make matters worse, semiconductor devices take months to produce, and as such any disruption to services can result in months of production lost.
While it is believed that the storms will not negatively impact revenue, companies such as NXP have stated that there could be a loss of $100 million in revenue for the second quarter of 2021. Furthermore, Infineon announced that it expects to get its manufacturing plant back to full operation by June 2021 and that it was able to restore its site after only one week of the shutdown.