US, Samsung, and other semiconductor companies request inside information such as inventory production
With the cause of solving the semiconductor shortage
Semiconductor companies are reluctant to say that they are top secret information that is not disclosed even in public announcements
Some are concerned that related information could leak to Intel.
Gina Lermando, U.S. Secretary of Commerce. AP Communication
“There are measures in place in case companies don’t cooperate. I hope they don’t go there, but if they do, they will.”
U.S. Secretary of Commerce Gina Lemando said in an interview with a foreign press on the 23rd (local time). It was an interview conducted in time for a meeting in which the White House and the U.S. Department of Commerce convened industry officials such as Samsung Electronics to respond to the semiconductor shortage.
Minister Lehmando made such remarks because the US government requested semiconductor companies to voluntarily submit information related to inventory, orders, and sales within 45 days. It was stated that the cause was to find a solution to the semiconductor shortage (shortage of supply), but companies are expressing disapproval. This is because semiconductor companies are keeping their inventory, order quantity, and production volume under the highest secrecy to such an extent that they have never officially disclosed them.
Semiconductor foundry’s production capacity and pricing influence
Samsung Electronics Hwaseong Campus Foundry. Provided by Samsung Electronics
Foundries such as Samsung Electronics and Taiwan’s TSMC have never publicly stated where their customers are. In the case of Samsung Electronics, it is known that it produces Tesla’s autonomous driving chips and LED headlamps, but has not officially acknowledged this. Because customers don’t want it.
For global companies such as Apple and Tesla, the types, performance, and competitiveness of products can be revealed depending on which semiconductor company they entrusted with production. The reason why a Korean company that supplies parts to Apple only mentions Apple as a ‘American-oriented company’ in an internal report is conscious of such customers.
From the foundry’s point of view, the production capacity, that is, the extent of its production capacity, is kept secret. Yield, which can measure semiconductor production, is a representative example. Yield is a number expressed as a percentage of the number of actually produced normal chips compared to the maximum number of chips (ICs) designed on one wafer. A higher yield means higher productivity. When the yield is high, the amount of material used is reduced, thereby reducing manufacturing costs. An industry official said, “The moment the yield is revealed, the semiconductor company’s technology is revealed as it is, so you may be at a disadvantage in price negotiations with customers.”
If a semiconductor company’s inventory and production capacity are revealed, it can affect the overall price of semiconductors. For example, the semiconductor fixed transaction price is the supply price that a semiconductor company determines in the form of a long-term contract through negotiations with major fixed customers such as overseas PC companies. If it is known that a semiconductor company has a large amount of inventory to process, the fixed transaction price will inevitably fall.
US to mobilize Defense Product Production Act (DPA)
Although semiconductor companies are reluctant to disclose inside information, it seems unlikely that they will avoid pressure from the US government. This is because the US government is known to be considering ways to force companies to submit information by mobilizing the Defense Materials Production Act (DPA).
The DPA was established in 1950 to support the Korean War. Under this law, the president can require companies to contract to supply essential supplies. You can designate items that are prohibited from hoarding or price fixing. It can also instruct the establishment of a system for distributing goods, services and facilities, and control the private economy so that essential goods can be used for national defense purposes.
Fear of information leakage to US semiconductor companies
Above all, the semiconductor industry is concerned that such a request for information submission from the United States may work in favor of American semiconductor companies. An official from a semiconductor company said, “As Intel declared its re-entry into the foundry with the US government on its back, the possibility that key information from Samsung Electronics or Taiwan’s TSMC could flow into Intel cannot be ruled out.”
Intel CEO Pat Gelsinger. Hankyung DB
In fact, Intel and the U.S. government are explicitly strengthening their cooperative relationship. The Wall Street Journal (WSJ) recently reported that Intel is lobbying for a subsidy for semiconductor investment. According to the WSJ, Intel CEO Pat Gelsinger met with administration official Joe Biden in July to hold a rooftop banquet near the White House. Earlier, it was reported that he had briefed the European Union (EU) Commission on a proposal to build a fab.
The industry believes that the US government’s creation of a semiconductor ecosystem in the US and Gelsinger’s aggressive investment strategy for foundries match. Since Intel will take the lead in resolving semiconductor shortages and manufacturing imbalances, there is also the logic of asking the US government to provide more subsidies to local companies.
Reporter Park Shin-young nyusos@hankyung.com
