Looking for Non-Japanese Suppliers
Samsung Electronics aims to become No. 1 in the global foundry business by 2030. However, the plan is facing huddles as Japan’s export restrictions on Korea have lengthened. The tech giant has not yet found alternative suppliers of photoresists for an extreme ultraviolet (EUV) process that have not been sufficiently provided since last July, when Japan began to impose restrictions on export to Korea.
According to the Korea Institute of Science and Technology (KISTI) on Nov 27, Korean businesses depend on Japanese suppliers for 93.2 percent of their photoresist demand, and dependence on Japan for EUV photoresists is almost in the same level.
Korean companies rapidly responded to Japan’s export restrictions on photoresists for EUV by increasing imports of materials made in Belgium. According to the Korea Customs Service (KCS), photoresist imports from Belgium grew to US$4.59 million in the third quarter of the year, up about 20 times compared to the previous quarter (about US$ 250,000). Most of them are photoresists for EUV.
Samsung Electronics began to mass produce the Exynos 9825, a mobile application processor built on a 7-nm EUV process, but the volume takes up a small share of its total output. The real problem will come a few years later, when the EUV process becomes a mainstay.
As the Korean tech firm is the first to introduce the EUV process among the foundry companies, it plans to continue to increase its proportion. Since April this year, the company has been promoting its 5-nm EUV process to global chip design companies and is planning to operate an exclusive EUV line in its Hwaseong Campus next year.
Market research firms forecast the expansion of the EUV process as well. According to IC Insights’ reports, the production of semiconductors with a size less than 10 nm is expected to increase from 1.05 million sheets of wafer a month this year to 6.27 million in 2023. The proportion of under-10-nm semiconductor processes will grow from 5 percent to 25 percent during the same period. Industry insiders forecast that EUV would account for most of the processes of under-7 nm in a few years.
The expansion of the EUV process automatically leads to an increased use of photoresists for EUV. As Korean chipmakers forecast that localization of EUV photoresists will not be attained within a few years, they plan to move out of Japan and diversify their suppliers. However, as they have optimized the EUV photoresists with Japanese suppliers, their diversification of suppliers could result in lowered yields.
Such a situation would benefit TSMC, the world’s largest foundry. TSMC introduced the EUV process later than Samsung, but it has recently bought up EUV photolithography equipment from ASML, the only supplier of EUV lithography machine in the world. Besides, TSMC is free from any concern about photoresist supply.
The fabless industry shows conflicting opinions. While some fables companies feel the need to check TSMC’s dominance, others say is there is a need to check Samsung’s entry into foundry as it is an integrated device manufacturer (IDM) and ranks first in the global smartphone market share. Yet a growing number of fabless companies are placing orders on TSMC.
According to market research firm TrendForce, TSMC’ share in the foundry market posted 50.5 percent in the third quarter of the year, up 2.4 percent from early this year, while Samsung Electronics recorded 18.5 percent, down 0.6 percentage point during the same period. TSMC saw its share price soar by 40 percent this year, and plans to widen the gap with its rival by increasing investment to US$15 billion within this year.