Several updates concerning U.S.-China tensions have been in the news over the last few days. Risc-V is another major theme of this news roundup, with product announcements from the recent Risc-V Summit. And one more AI startup is raising the bar for energy efficiency.

Will the ‘chip war’ escalate hitting older nodes?

While export controls on Western technologies have so far focused on the most advanced process nodes, the ‘chip war’ between the U.S. and China could potentially escalate and hit older nodes, according to a TechInsights analyst quoted by Reuters. The premises for this analysis can be found in two press reports: on the one hand, China is reportedly working on a $143 billion support package for its semiconductor industry, to counter U.S. moves aimed at slowing its technological advances; on the other hand, Chinese foundry SMIC is reportedly ramping up production of 28-nanometer chips, an old node still widely used in automotive, weapons and IoT applications. While subsidies would likely benefit Chinese equipment manufacturers – such as Naura, Advanced Micro-Fabrication Equipment and Kingsemi – the concern of TechInsights is that SMIC and other chipmakers in China could use government subsidies to sell 28-nanometer chips at a low price, flooding this market segment and wiping out global competition.

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As the industry celebrates the 75th anniversary of the invention of the transistor, geopolitical issues keep making news with Taiwan-headquartered TSMC stepping up its commitment to U.S. fabs. Several updates this week concern technological advancements presented at the IEDM conference.

TSMC to increase its Arizona investment

TSMC has announced that in addition to its Arizona’s first fab, which is scheduled to begin production of N4 process technology in 2024, it has also started the construction of a second fab which is scheduled to begin production of 3-nanometer process technology in 2026. The overall investment for these two fabs will be approximately US$40 billion, representing the largest foreign direct investment in Arizona history and one of the largest foreign direct investments in the history of the United States. TSMC Arizona’s two fabs are expected to directly hire 4,500 employees and, when complete, to manufacture over 600,000 wafers per year. This investment has reportedly sparked concerns in Taiwan, prompting the local government to reassure on TSMC’s commitment to the island. However, according to another report TSMC is planning to move all its 3-nanometer production to the U.S., which would enable Apple to equip its future iPhone 15 models with a new 3-nanometer processor made in the United States.

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Will the U.S. ‘CHIPS and Science Act’ benefit fabless companies? As noted by a report just released by the Semiconductor Industry Association (SIA) and the Boston Consulting Group, the recently passed U.S. support plan will provide public funding for semiconductor manufacturing, but not for design. The report finds that a federal investment in semiconductor design and R&D of $20 to $30 billion through 2030 – including a $15 to $20 billion for an investment tax credit for semiconductor design – will help maintain long term U.S. chip design leadership.

Semiconductor capex to drop in 2023 – forecast

Despite the booming demand in early 2022, market research firm IC Insights forecasts a -19% drop in total worldwide semiconductor capital industry spending in 2023, “the steepest decline since the global financial meltdown in 2008-2009.” This forecast already considers the impact of the U.S ‘CHIPS and Science Act’: “IC Insights does not expect a boost to semiconductor capital spending from the $52 billion in grants that will be given to U.S. semiconductor suppliers as part of the U.S. CHIPS and Science Act that was passed earlier this year. Rather, IC Insights believes that most U.S. semiconductor producers that receive this money will use it to replace what they would have spent if not receiving the grant. In other words, the CHIPS and Science Act money is not expected to be ‘additive’ funding to planned semiconductor industry spending, but instead is likely to replace the money a semiconductor producer was going to budget if CHIPS and Science Act funding was unavailable,” the market research firm maintains.

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