Lead the opponent for at least five years! Samsung competes with Chinese and American counterparts for “chip war”
The British “Financial Times” website recently reported that South Korea’s Samsung is ready to respond to the challenges of Chinese and American manufacturers in the global “chip war.”
According to the report, when the United States, the European Union, and China each make plans to spend billions of dollars on reducing dependence on foreign-made computer chips, the global supply chain appears to be about to be reshaped.
But analysts and Samsung, the world’s largest memory chip manufacturer, believe that the South Korean company will not be replaced anytime soon.
A Samsung executive told a Financial Times reporter at a factory south of Seoul: “In the foreseeable future? I think our market share can be maintained even if it doesn’t rise.”
According to the report, the shortage of automotive chips related to the epidemic has aggravated people’s concerns about relying on foreign key technology manufacturers. After that, the United States, China, and Europe have increased investment in this field.
For example, the US government has proposed a $50 billion chip manufacturing and research plan.
But analysts say that Samsung’s leadership is unlikely to be challenged immediately.
Bain & Co’s partner Velu Sinha said: “If a new foundry goes online before 2025, then it’s time to break ground before the end of this year. Therefore, what’s happening now will change the pattern in the next two to three years. Is unlikely.”
The report commented that for decades, Samsung had led the production of Dram chips and Nand chips. But the company’s warnings to challengers are not based solely on past performance. Samsung believes that its position is worry-free because it has made progress in manufacturing technology, and the cost of manufacturing chips is getting higher and higher.
He said: “This pace is accelerating at present. It is challenging for established companies like Samsung to continue research and investment. It is not easy for other suppliers to talk about it.
Since Samsung’s founders Li Bingzhe and Li Jianxi rushed to invest in semiconductor development in 1974, many of the company’s engineers have focused on one task: studying how to store more data on more minor chips. The company packed 16 billion components on its thumb-sized Dram chip, far exceeding the 64 million in the 1990s.
According to reports, some companies covet Samsung’s leading position, but the complexity and scale involved in producing cutting-edge chips are a severe challenge they face.
At the end of 2020, Samsung’s chip production capacity accounted for 15% of the global total. This puts the company ahead of TSMC, the world’s largest processor chip maker and memory chip rivals Micron Technology and SK Hynix.
Samsung also pointed out that it is a leader in intellectual property and engineering experience to prove that it can defend its position.
The most important of these is its use of extreme ultraviolet lithography (EUV) in the manufacture of DRAM chips, which results in significantly improved power and energy efficiency.
Samsung, TSMC, and Intel use EUV technology to manufacture cutting-edge advanced processor chips. But the South Korean company said that thanks to its joint R&D center developing both processor chips and memory, it uses EUV technology for Dram chips, which is ahead of its competitors.
The company said: “Can the European Union, the United States, and China… catch up with Samsung and TSMC in the (semiconductor) technology race? Think about how much they are behind. These countries need to invest more than $30 billion a year for a minimum of 5 years. There may be a chance of success.”
South Korean policymakers are also planning to implement incentives such as tax cuts for leading companies in the chip manufacturing industry. Analysts expect that Samsung will announce an increase in capital expenditures for its processor chip business shortly, including investments in the United States.
Nevertheless, Chinese technology companies are slowly making progress.
Wang Dan, a technical analyst at Longzhou Economics Consulting in Shanghai, pointed out that China Yangtze Storage Technology Co., Ltd. and Changxin Storage Technology Co., Ltd. accounted for approximately 3% of the Nand and Dram markets, respectively.
He wrote in the report: “Both companies have hired a large number of Korean engineers, and Korean engineers account for most of the talents in the global memory chip field. At present, most people in the industry expect YMTC to become a strong team in 3 to 5 years. ”
Bain’s Sinha said that China’s chip industry is gradually getting rid of “western-origin” technology. But he said that he does not expect the current pattern of the global chip industry to change in the next three to five years.