Korean Semiconductor Makers Expected to Grow Further
China is aiming to reach a self-sufficiency of 70 percent in the semiconductor industry by 2025, but the ambition is being thwarted by the United States. Under the circumstances, South Korean semiconductor companies are expected to get an opportunity to grow further.
According to industry sources, China currently accounts for 60 percent of the global semiconductor demand, and yet production in China stands at 16 percent of the global production volume. Besides, China’s self-sufficiency in the industry is currently less than 30 percent whereas it aimed to reach 40 percent by 2020. According to market research firm IC Insights, the figure is forecast to fall below 20 percent in 2025.
At present, the United States is strangling China in the fields including electronic design automation software, semiconductor manufacturing equipment and core intellectual properties. The United States’ shares in these fields amount to 70 percent to 90 percent. In addition, the United States is blocking cross-border M&As involving China. It tried to take over Lumileds, Lattice Power, Aixtron, and so on, only to fail.
It can be said that South Korea’s opportunity consists in the foundry field. Although U.S. fabless companies’ global market share amounts to 64 percent, the global foundry market share of the United States is 9 percent or so. The United States is currently keeping China in check by outsourcing manufacturing to Taiwanese and South Korean companies.
“Taiwan’s foundry market share amounts to 64 percent, South Korea’s is 17 percent, and the combined share of Taiwan, South Korea and the United States is close to 90 percent, which means the three countries’ alliance in the industry is a very effective tool against China,” said an industry source, adding, “Taiwan is more reliant on the Chinese economy than South Korea, Taiwan is benefiting from the rivalry between the United States and China by making use of its competitiveness in the industry, and South Korea needs to follow its example.”