South Korea’s spending on advanced chip-making equipment will exceed China’s by 2024. This is indicated by data from the US organization SEMI recently cited by Bloomberg, according to which Seoul’s investment will increase next year by 41.5% to 21,000 million dollars, while that of Beijing will do so by 2%, to 16,600 million dollars.
Prevent China’s development. This SEMI forecast seems to show the effect of the restrictions established by the United States in October 2022 on China’s ability to acquire elements necessary for the manufacture of chips that have been produced by US companies or with material originating in that country. With this, Washington seeks to limit Chinese development in the microchip industry, preventing Beijing’s access to products made by companies such as NVIDIA, although not without difficulties for the White House.
New sanctions. On the other hand, this sanctions policy, which is expected to cause the loss of billions of sales in US companies such as Applied Materials Inc, Lam Research Corp and KLA Corp, is being followed in turn by other countries. In this sense, the Netherlands and Japan recently announced the imposition of sanctions on the export to China of materials necessary for the manufacture of state-of-the-art chips made by companies such as the Dutch ASML and the Japanese Tokyo Electron Limited.
Seoul moves token. For its part, South Korea has decided to harmonize its development in the microchip industry with the interests of the United States, which already suggested last February the possibility of limiting the number of semiconductors exported to China and produced by South Korean companies. Samsung and SK Hynix, as reported by Reuters.
An ambitious and expensive plan. In this sense, South Korea is now seeking to promote the creation of microchip factories in the country: with this idea, President Yoon Suk Yeol announced on March 16 the creation of the largest microchip manufacturing center in the world. It will be located in Seoul and will be financed by 230,000 million dollars from Samsung, which will be used over the next two decades.
Samsung takes note. In relation to this issue, this project is part of Samsung’s strategy to increase its production of advanced semiconductors and gain ground from the Taiwanese giant TSMC. In fact, the South Korean multinational announced in October 2022 a five-year plan to increase its production and expand globally.
Texan future. One of the most attractive countries for the firm is the United States: a microchip production plant is being built in Texas whose cost already exceeds 25,000 million dollars.
Seoul and Tokyo are getting closer. On the other hand, in this context of tough technological competition, a very important development has recently occurred in Northeast Asia. South Korea and Japan, US allies in the region, have agreed to unfreeze their diplomatic relations, touched for years. In this sense, Tokyo decided to lift the sanctions imposed on Seoul for the purchase of material to manufacture chips from the Japanese country.
Technological rivalry. Finally, SEMI foresees an increase in the purchase of material for the manufacture of chips of 21% to 92,000 million dollars in 2024. As Yan Xuetong, dean of International Relations at Tsinghua University, recently said in conversations with La Vanguardia, In this “post-cold war” the new rivalry between the United States and China is not ideological: it is technological.
Image: ASML
In Xataka | The West is going to lose the chip war: Asia’s overwhelming superiority, in numbers
