Overthrowing Samsung
China is jumping into the global DRAM semiconductor market, which is dominated by Korean semiconductor manufacturers, in earnest.
According to China’s major media outlets on February 3 (local time), Tsinghua Unigroup will invest 60 billion yuan (US$9.07 billion or 10.87 trillion won) in building a 12-inch DRAM plant and NAND production lines soon, citing the report of Taiwan’s state-run Central News Agency (CAN). The group aims to build the plant with a monthly production capacity of 100,000 wafers.
In the process, Tsinghua Unigroup is expected to invite U.S.-based Micron Technology to be a shareholder of the plant. After SK Hynix rejected its offer for the memory technology partnership, the group has been building a foundation to establish the partnership with Micron. Although it failed to take over Micron, the two companies can establish strategic partnerships in order to catch up the Korean DRAM industry. Micron also needs a partnership with Chinese firm to crack the global DRAM market in which Korean firms account for more than 70 percent.
Tsinghua Unigroup’s movement is led by Charles Kau, vice chairman of the group and former chairman of Inotera Memories. He is also known as the godfather of the Taiwanese DRAM industry. Last year, the group hired Kau as its vice chairman, showing a will to push into the global DRAM market. He was in charge of collaboration with Micron for a long time when he worked for Inotera in the past. Currently, Kau is working on to establish a partnership with Micron for its DRAM business.
Some industry sources still say that it will take at least three to five years for China to tap into the global DRAM market. This is due to the fact that the country has no original technology and it will take time to mass produce products. Jeon Byeong-seo, head of China Economy and Finance Research, said, “Even with the investment in DRAM, a company cannot raise the yield rate and produce quality products right away. It is clear that Chinese firm will jump into the memory industry, but it will take three to five years to compete with Korea.”
Meanwhile, others say that it is too complacent as China is seeking to promote the memory semiconductor industry through systematic M&As and strategic technical partnerships. An official from the industry said, “In the DRAM industry, process, productivity and investment are the most important, rather than original technology. In particular, DRAM chips for general purpose have almost no gap in technology, except for productivity. Therefore, Korean firms should watch closely whether the Chinese firm will establish a partnership with Micron.”