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A New Chicken Game Starts in Global Semiconductor Industry
Samsung, SK Hynix Investing Aggressively
A New Chicken Game Starts in Global Semiconductor Industry
  • By Kim Eun-jin
  • January 17, 2019, 10:55
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A new chicken game has started in the global semiconductor industry.

A new chicken game has started in the global semiconductor industry. Leading companies such as Samsung Electronics and SK Hynix are investing aggressively to keep Chinese semiconductor producers in check. Chinese semiconductor maker Fujian Jinhua scratched off its plan to mass-produce DRAMs due to pressures from the leading chipmakers and the ongoing U.S.-China trade war.

The new semiconductor chicken game is different from those of the past. In the late 2000s, a semiconductor chicken game solidified a three-runner race among Samsung Electronics, SK Hynix and Micron as a supply glut and a price drop put Taiwanese, Japanese and German semiconductor makers out of business. However, in the new chicken game, latecomers face not only a price drop but also the three frontrunners’ relentless super-gap strategy.

On Jan. 15, Samsung Electronics vice chairman Lee Jae-Yong reaffirmed that the company would implement its investment plan as announced. He made the remark during the “Conversation with Business Leaders” hosted by President Moon Jae-in at Cheong Wa Dae. In particular, Lee eased the president’s concern about the future of the Korean semiconductor industry by saying, “Samsung will demonstrate its real power from now.”  He expressed his strong confidence in Samsung’s super-gap strategy.

Samsung Electronics will invest 180 trillion won in semiconductor production facilities and technology development in order to widen its gap with other companies. Samsung is accelerating the development of application processors (APs), a sector where China lags far behind. It is also speeding up implementation of a 7-nm EUV process, which is an ultra-fine process. Two lines of Samsung’s semiconductor plant in Xian, China will go into operation as early as June.

In the meantime, SK Hynix will build a new semiconductor cluster by investing 120 trillion won. The chipmaker made a bold move by introducing deep ultra violet (DUV) equipment capable of implementing the pre-ultra microfabrication process to its plant in Wuxi, China.