Source: Semiconductor Industry Watch. At yesterday's Conputex conference, Dr. Lisa Su released the latest roadmap. Afterwards, foreign media morethanmoore released the content of Lisa Su's post-conference interview, which we have translated and summarized as follows: Q: How does AI help you personally in your work? A: AI affects everyone's life. Personally, I am a loyal user of GPT and Co-Pilot. I am very interested in the AI used internally by AMD. We often talk about customer AI, but we also prioritize AI because it can make our company better. For example, making better and faster chips, we hope to integrate AI into the development process, as well as marketing, sales, human resources and all other fields. AI will be ubiquitous. Q: NVIDIA has explicitly stated to investors that it plans to shorten the development cycle to once a year, and now AMD also plans to do so. How and why do you do this? A: This is what we see in the market. AI is our company's top priority. We fully utilize the development capabilities of the entire company and increase investment. There are new changes every year, as the market needs updated products and more features. The product portfolio can solve various workloads. Not all customers will use all products, but there will be a new trend every year, and it will be the most competitive. This involves investment, ensuring that hardware/software systems are part of it, and we are committed to making it (AI) our biggest strategic opportunity. Q: The number of TOPs in PC World - Strix Point (Ryzen AI 300) has increased significantly. TOPs cost money. How do you compare TOPs to CPU/GPU? A: Nothing is free! Especially in designs where power and cost are limited. What we see is that AI will be ubiquitous. Currently, CoPilot+ PC and Strix have more than 50 TOPs and will start at the top of the stack. But it (AI) will run through our entire product stack. At the high-end, we will expand TOPs because we believe that the more local TOPs, the stronger the AIPC function, and putting it on the chip will increase its value and help unload part of the computing from the cloud. Q: Last week, you said that AMD will produce 3nm chips using GAA. Samsung foundry is the only one that produces 3nm GAA. Will AMD choose Samsung foundry for this? A: Refer to last week's keynote address at imec. What we talked about is that AMD will always use the most advanced technology. We will use 3nm. We will use 2nm. We did not mention the supplier of 3nm or GAA. Our cooperation with TSMC is currently very strong-we talked about the 3nm products we are currently developing. Q: Regarding sustainability issues. AI means more power consumption. As a chip supplier, is it possible to optimize the power consumption of devices that use AI? A: For everything we do, especially for AI, energy efficiency is as important as performance. We are studying how to improve energy efficiency in every generation of products in the future-we have said that we will improve energy efficiency by 30 times between 2020 and 2025, and we are expected to exceed this goal. Our current goal is to increase energy efficiency by 100 times in the next 4-5 years. So yes, we can focus on energy efficiency, and we must focus on energy efficiency because it will become a limiting factor for future computing. Q: We had CPUs before, then GPUs, now we have NPUs. First, how do you see the scalability of NPUs? Second, what is the next big chip? Neuromorphic chip? A: You need the right engine for each workload. CPUs are very suitable for traditional workloads. GPUs are very suitable for gaming and graphics tasks. NPUs help achieve AI-specific acceleration. As we move forward and research specific new acceleration technologies, we will see some of these technologies evolve-but ultimately it is driven by applications. Q: You initially broke Intel's status quo by increasing the number of cores. But the number of cores of your generations of products (in the consumer aspect) has reached its peak. Is this enough for consumers and the gaming market? Or should we expect an increase in the number of cores in the future? A: I think our strategy is to continuously improve performance. Especially for games, game software developers do not always use all cores. We have no reason not to adopt more than 16 cores. The key is that our development speed allows software developers to and can actually utilize these cores. Q: Regarding desktops, do you think more efficient NPU accelerators are needed? A: We see that NPUs have an impact on desktops. We have been evaluating product segments that can use this function. You will see desktop products with NPUs in the future to expand our product portfolio.

Organo, a Japanese industrial water company.$Organo (6368.JP)$As the leading supplier of Taiwanese semiconductor manufacturers, Organo's stock price has risen about 10 times in the past five years due to its technical strength and resistance to fluctuations in the chip market.

Although investors are interested, further growth depends on the company's ability to improve asset efficiency.

Taiwan Semiconductor's central utilities at its cutting-edge wafer plant in Kumamoto Prefecture, southwestern Japan, control the water and electricity flowing into production facilities. Organo produces ultra-pure water (UPW) here that is essential for the chip manufacturing process.

The impurities in the semiconductor-grade UPW cannot exceed one in a trillion - less than a speck in an Olympic swimming pool. Organo removes contaminants such as dirt, metal ions, and bacteria from the water using proprietary resin membranes and chemicals to purify it to this high degree of purity.

Since its founding in 1946, Organo has been providing ultrapure water for electronics manufacturers since 1957. In 2000, the company became a supplier to Taiwan Semiconductor and established a subsidiary in Taiwan, China in 2005. After Taiwan Semiconductor entered the US market, the company also established a subsidiary in the United States.

As the semiconductor industry develops, the standard for ultra-pure water is also constantly raising. Off-the-shelf equipment cannot measure the purity level needed for cutting-edge chip manufacturing. Organo uses proprietary membranes to become the world's first company capable of detecting 10-nanometer particles.

Organo's continuous technological progress allows it to do business with many major chip makers and hold a leading position in the ultra-pure water market for advanced semiconductors.

The company also participated in the construction of a new cutting-edge factory in Hokkaido, Japan, for the Japanese state-owned chip maker Rapidus.

According to Goldman Sachs analyst Takeru Adachi, Organo "can choose profitable contracts because its production capacity has not kept up with demand."

Due to the impact of the yen exchange rate, the company's net profit for the full year ending March 2025 is expected to decline by 7%. However, operating profit has grown more than nine times in the past decade, and is expected to increase by 2% this fiscal year to reach JPY 23 billion ($146 million).

Organo's stock price reached JPY 8,860 at the end of May - considering the stock split, it set a new record high. In addition to the company's growth potential, investors are attracted by its profitability stability in an industry that is prone to prosperity and depression.

Based on operating profit for the past 10 years, Organo's coefficient of variation (CV) is 0.67, which is considered stable compared to 26 other companies in the Nikkei semiconductor stock index.

In the past decade, only four companies, including Sony, have seen operating profit growth exceed that of Organo. Among these four companies, only Sony's CV is smaller than Organo's.

The CV values of power semiconductor manufacturer Sanken Electric and chip equipment manufacturer Screen Holdings are similar to Organo, at 0.68 and 0.62, respectively. However, Sanken's operating profit has doubled in the past 10 years, and Screen's operating profit has grown sixfold.

Organo's stable income is largely due to its lack of exposure to the silicon cycle. Even if chip makers reduce their operations, the company still needs to use water for purification in its processes. The maintenance of water systems brings stable income to Organo.

In terms of return on equity, Organo's return on equity for the previous fiscal year was 18.4%, surpassing domestic competitor Kurita Water Industries. However, this index lags behind Nomura Micro Science's 32.1% return on equity for Japanese competitors. Organo and Nomura Micro Science's operating margins hover around 15%, followed closely by Kurita Micro Science.

Nomura Microelectronics' stock price has risen about 30 times in the past five years, despite losing momentum since the spring. According to Nikkei Value Search, its asset turnover ratio is 1.3, higher than Organo's 0.87, which measures how much income a company's assets generate.

It is difficult for Organo to achieve the same ratio as Nomura Microelectroncs, which does not have its own facilities. However, Organo is working to improve efficiency, including using artificial intelligence.

The goal is to achieve partial automation of its water treatment plant's design and operation processes, and to optimize the use of chemicals during the process. Higher efficiency could open the door to new opportunities.

Some market observers believe that Organo's return on equity will increase to around 20%. The company also plans to review its real estate and equity holdings.

Equipment manufacturer, up 500% in two years.

Artificial intelligence requires faster and faster chips, but the cost of manufacturing these chips is increasing. Therefore, advanced packaging has become the latest hot spot in the semiconductor industry, benefiting many companies, including a little-known Japanese equipment manufacturer.

Chip packaging (placing chips in protective shells and connecting them to power and other components) used to be relatively minor. Making chips themselves faster and smaller requires more effort. Most chip packaging (the last step in semiconductor manufacturing) is outsourced to companies specializing in assembly and testing, and cost is the major consideration.

Therefore, this is not a particularly attractive industry. For example, last year, the world's largest chip packaging and testing company Taiwan Semiconductor Manufacturing Company had a gross margin of 16%, while Taiwan Semiconductor Manufacturing Company Limited's gross margin was 54%.

But as chip sizes approach the atomic level, the cost of shrinking them further is increasing. Therefore, the recent AI boom has put advanced packaging in the spotlight. The idea is simple: integrating different chips tightly in one package can reduce data transfer time and energy consumption.

A special use case is memory chips, especially with the surge in demand for AI. The so-called high-bandwidth memory (HBM) stacks multiple layers of memory chips together and places them near the central processor to speed up data transmission.

For example, Nvidia's H200 AI chip integrates six HBMs with its own graphics processing unit. Since the end of 2022, the stock price of South Korean memory chip manufacturer SK Hynix has almost tripled. It is an early leader in the HBM field, ahead of Samsung and Micron Technology.

Morgan Stanley said advanced packaging accounted for 9% of global semiconductor revenue by 2023. The bank expects this to rise to 13%, or $116 billion, by 2027.

As this process requires the integration of different types of chips, it is becoming increasingly important in the chip manufacturing process. Contract manufacturers who produce chips must work with other chip makers to design packaging.

This is also one of the reasons why Taiwan Semiconductor Manufacturing Co. is leading the industry with its CoWoS (chip-on-wafer-on-substrate) packaging technology. The production capacity of this advanced packaging technology is limited and has been a bottleneck in producing more AI chips.

Samsung and Intel have similar technologies. SK Hynix has partnered with Taiwan Semiconductor Manufacturing Co. to develop the next generation of HBM and advanced packaging technologies.

A company that has been trying hard to make money behind the scenes is Japanese semiconductor equipment manufacturer Disco. The company produces tools for grinding and cutting silicon wafers with chips. Thinner wafers become more important when chips are stacked together.

Morgan Stanley estimates that about 40% of Disco's revenue comes from advanced packaging. Its stock price has risen more than fivefold since the end of 2022.

Continuing to make chips smaller may become more difficult, but more innovative packaging methods can still bring many opportunities.

Editor/Somer