Reaching Out
A growing number of global enterprises are apparently trying to check the influence of the Korean semiconductor industry by supporting Chinese companies.
According to major overseas media outlets including the New York Times on June 24, Qualcomm will provide technical support to the Semiconductor Manufacturing International Corporation (SMIC), the largest semiconductor foundry in China, to build a R&D center in Belgium. Based on this support, the SMIC is likely to start developing application processors for smartphones and server chips, in addition to consignment productions for semiconductor chipsets.
Last year, the SMIC also signed a contract with Qualcomm to produce 28-nanometer chipsets. It was the first time for the world's largest mobile chipset maker to ask another company to produce 28 nm chips, aside from Taiwan Semiconductor Manufacturing Company (TSMC). Qualcomm revealed that the Chinese semiconductor company will produce its 3D chips and those related to the Radio Frequency (RF) front end for communications modems as well.
Intel is also injecting a massive amount of money in the Chinese semiconductor industry starting in 2014. The chipmaker purchased an ownership stake in Chinese technology conglomerate Tsinghua Unigroup for 9 billion yuan (around 1.53 trillion won or US$1.45 billion) last year. Tsinghua Unigroup is a state-run enterprise financed by Tsinghua University, and owns fabless semiconductor companies Spreadtrum Communications and RDA Microelectronics.
Experts are saying that this kind of partnership between a Chinese firm and a global semiconductor company may exert leverage over the Korean semiconductor industry, Samsung Electronics in particular. An industry source explained, “Deepening partnerships between Qualcomm and SMIC and between Intel and Spreadtrum Communications are likely to lead to a decrease in sales of Samsung Electronics' System LSI business. It means Samsung would face strong competitors in the mobile and server chip markets.”