As the United States strongly pushes for sanctions against China to prevent China from developing high-tech semiconductors, business uncertainty for domestic semiconductor companies that have entered China is growing. Recently, it is known that the detailed guidelines of the US ‘Semiconductor Act’ will be released as early as this month, raising concern in the industry.
Samsung Electronics (005930)a SK Hynix (000660) In an interview with Chosun Biz on the 15th, economic security expert Yeon Won-ho, head of the economic security team at the Institute for International Economic Policy (KIEP), said in an interview with Chosun Biz that “ultimately, Korean companies will sell next generation memory chips in China.” It should be seen that making semiconductors is becoming impossible.” The deadline he suggested is three to five years. “The United States intends to completely block the development of new semiconductor technologies in China according to its own timetable,” Yeon said.
Yeon’s main research area is US-China trade and competition for dominance in semiconductor technology between countries. He has been communicating with officials from the US Department of Commerce, traveling back and forth from Washington, DC, since last year when the US began rolling out semiconductor regulations in earnest. Team leader Yeon said, “I am pessimistic, but with the suspension of the moratorium steady, the Korean government should voice export control issues in the Chip 4 (semiconductor advisory body brought together by Korea, the United States, Japan, and Taiwan).”
◇ “Detailed guidance for guardrails, likely to follow regulatory measures in October last year”
Regarding the specific guidelines of the Semiconductor Act’s “guard rail” clause, which limits Chinese investment for 10 years when backed by the United States, Yeon predicted that the level of export control measures for semiconductors to China will published by the US Department of Commerce on October 7 last year. According to the guardrail provisions of the United States Semiconductor Act, beneficiary companies that have received subsidies from the United States are not allowed to make new investments related to cutting-edge technologies of less than 28nm (nanometers / billionths of a meter) in the foundry field. (semiconductor load production) in China for the next 10 years. It does not exist. The US Department of Commerce has decided to prepare separate standards within the next two years for investment regulations on memory semiconductors and packaging (back-end process), which are areas where Samsung Electronics and SK Hynix have entered China .
Tensions rose in the industry when it was announced that this standard could come out within this month at the earliest, but team leader Yeon said, “The detailed guidance for the Semiconductor Act does not appear to go any further than the export control level announced in October. last year.” He said, “The bigger problem facing the domestic industry is the one-year grace period from regulation that Samsung Electronics and SK Hynix got in October last year.” he said.
Yeon said, “As a result of talking to the US Department of Commerce, the US allowed Samsung Electronics and SK Hynix to supply semiconductor equipment to Chinese factories for one year in October last year, which was a very unusual and quite ad measure hock. .” During the grace period, the United States is preparing a timetable (schedule) for South Korea and Taiwan to participate in sanctions against China without causing a major blow to the global semiconductor supply chain,” he said.
◇ “The biggest problem is the end of the grace period soon”
Team leader Yeon said, “If it wasn’t for the US suspension decision at the time, Samsung and SK Hynix would have been in such a critical situation that production would have been interrupted immediately.” It’s very likely,” he said.
On October 7 last year, the US Department of Commerce announced measures to control the export of semiconductors to the public, apart from the Semiconductor Act signed by US President Joe Biden in August of that year. It contains information that requires separate permission from the Ministry of Commerce when selling equipment and technology that can produce DRAMs of 18 nm (nanometers, 1 billionth of a meter) or smaller, NAND flash with 128 layers or more, and chips logic of 16 nm or less to China.
Three days after the announcement, the United States decided to suspend the application of regulations to the Chinese factories of Samsung Electronics, SK Hynix, Intel in the United States, and TSMC in Taiwan for one year. First of all, only these four companies were allowed to bring necessary semiconductor equipment for factories in China without separate permission from the United States until October this year. Samsung Electronics produces approximately 40% of total NAND flash shipments in Xian, China, and operates a back-end process (packaging) plant in Suzhou. SK Hynix also makes about 50% of its DRAM at its Wuxi plant in China, and has a NAND flash plant acquired by Intel last year in Dalian, China.
As predicted by team leader Yeon, if the US ban is stopped within five years at most, neither Samsung Electronics nor SK Hynix will be able to make next-generation memory in China. “If Samsung or SK Hynix cannot make top-class memory in China, they will eventually lose their competitiveness in the market, so it does not seem easy to continue manufacturing in China,” Yeon pointed out.
Team leader Yeon said that Korea should raise its voice in Chip 4, where it takes an ambiguous position. He said, “Just as Taiwan’s representative in Chip 4 said that they would participate in stabilizing the supply chain so that their own interests are reflected as much as possible, Korea should also actively use this advisory body to discuss guardrails that the domestic industry. concerned about or measures taken last October. do,” he said.
