Trilateral Competition

The system semiconductor market is highly likely to rapidly change with the IoT at the center.
The system semiconductor market is highly likely to rapidly change with the IoT at the center.

 

Trials of taking the leadership in the semiconductor market are intensifying the competition among Korea, China and Japan.

The three are making aggressive investments. But Korea is doing that to widen the gaps with the two while China and Japan to narrow the gaps. In particular, China is threatening Korea through steady M&As based on the national support.

According to surveys by market research firms Gartner and Applied Materials on July 1, it was forecast that Samsung Electronics and SK Hynix will invest in combination over US$ 10 billion in equipment a year for the next three years. They predicted that Korean semiconductor companies will invest US$10.2 billion in wafer fab equipment (WFE) this year. The Korean semiconductor manufacturers invested US$10.36 billion in 2017, US$10.73 billion in 2018 and US$11.95 billion in 2019, respectively. The amounts add up to US$33.04 billion for three years from 2017. Here, the WFE investment means the investment in semiconductor processing equipment only. Therefore, the investment amount in entire plants including the equipment will rise. In addition, their investment volume will account for about 30 percent of worldwide WFE investment.

In actuality, Samsung Electronics is expected this year to invest in the semiconductor sector more than last year when 14.7 trillion won (US$12.7 billion) was made. According to industrial sources, the semiconductor giant has decided to invest more than 2.5 trillion won (US$21.7 billion) by shifting a production line for non-memory semiconductor production in Hwaseong, Gyeonggi Province into one for 3D NAND flash memories. SK Hynix, the second ranker in the world memory semiconductor, is planning to continue the investment more than 6 trillion won (US$5.21) this year, following last year.

China’s promotion of its semiconductor industry is gaining speed too. It was found that US$65.9 billion was invested in semiconductor plants in China over the past year. The figure is the five times Samsung Electronics’ investment in semiconductor production lines in Pyeongtaek which are called the largest semiconductor production complex in the world. Chinese capital is reaching German semiconductor equipment companies after taking over equities in US semiconductor firms. Fujian Grand Chip Investment Fund LP (FGC) took over Aixtron, a German semiconductor equipment supplier for 670 million euro last month. Earlier, China’s Tsinghua Holdings Co. invested in Marvell Technology, a US-based semiconductor company. In April, Tsinghua Unigroup purchased six-percent equities in Lattice Semiconductor.

Japan is in hot pursuit of Korea as well. Toshiba, a representative semiconductor maker of Japan is trying to catch up with Samsung Electronics by applying a new technology to NAND flash memories used in smartphones next year. It seems that Toshiba will overhaul a flash memory production line to which the new technology will be applied by using some of 860 billion yen which will be invested in its semiconductor business for the next three years.

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