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In the Restructuring of the Global Semiconductor Supply Chain, Samsung and SK Hynix are Affected

Update time : 2023-09-13 10:18:02

According to foreign media news, in the restructuring of the global semiconductor supply chain, Samsung Electronics and SK Hynix may be affected by the US license-related decisions.
On September 11, the Korea Institute for International Economic Policy (KIEP) reported in its Global Semiconductor Supply Chain Restructuring Study that South Korean companies, especially those with factories in China, could face setbacks.
In October last year, the U.S. Department of Commerce effectively banned the export of semiconductor equipment to Chinese semiconductor manufacturers. However, Samsung Electronics, SK Hynix, Taiwan TSMC and other companies have been granted a one-year grace period. The extended grace period will be decided in October this year.
KIEP expressed concern about this, saying that "even if the United States issues a license, it can still increase sanctions against China at any time, complicating and amplifying the uncertainty of our business in China."
Although TSMC must also obtain a U.S. license, sanctions against memory chips are relatively harsher than logic chips, which account for only 10% of China's advanced production capacity. Memory factories need to be regularly upgraded to remain competitive, which makes the impact of sanctions even more significant.
Currently, about 50% of SK Hynix's DRAM production is produced at its Wuxi plant, which began operations in 2006. In 2010, a post-processing joint venture was established in Wuxi to form a complete semiconductor wafer processing system. In 2018, SK Hynix System IC set up a wafer foundry in Wuxi to manage the outsourcing production of system semiconductors. Samsung Electronics also has a unified production system, including a NAND flash post-processing line operating in Xi'an, China.
KIEP researcher Jung Hyung-gon said: "From 2005 to 2020, the overseas investment of Korean semiconductor companies was mainly concentrated in China, but the current situation is a serious concern due to sanctions. He further explained that while the U.S. may consider the global chaos that could come with a sudden tight control of China's memory factories, it is expected to gradually tighten controls and therefore need to be prepared.
This development highlights the growing need to strengthen South Korea's semiconductor manufacturing hub strategy. Increasing domestic semiconductor production capacity, like strengthening semiconductor reshoring support measures, is critical not only to removing future uncertainty from U.S. actions, but also to the survival of our businesses.
"The cost of building a new fab in the U.S. is about 30 percent higher (an average of $6 billion) than in Taiwan, South Korea or Singapore, and 50 percent higher than in China," Jung advises. He emphasized the continuity of the Sino-US semiconductor supremacy dispute, emphasizing the need to expand domestic semiconductor production capacity and strengthen the semiconductor hub strategy.

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