The semiconductor market is on fire. The United States spares no effort when looking for allies to join his crusade against the Chinese chip industry. Just five days ago the Government of the Netherlands approved new sanctions that seek to boycott Chinese companies by preventing them, among other things, from buying deep ultraviolet (UVP) lithographic equipment, which is the second most sophisticated ASML machines.
This Dutch company designs and manufactures the most advanced photolithography equipment that exists, the extreme ultraviolet (UVE). It has never sold them to Chinese IC makers, but it won’t sell its UVP machines to them going forward either. This move is a real torpedo to the waterline of the Chinese semiconductor industry, but the US-led Western alliance has not relaxed in the slightest after taking this step forward.
The objective of the Administration headed by Joe Biden is to curtail China’s military development by putting its chip manufacturers on the ropes, but not all the relevant players in this industry are in the West. There are two in particular that have a lot to say, and, precisely, they are neighbors of China: Japan and South Korea. These two countries orbit around the United States from a commercial and geostrategic point of view, so it was a matter of time before they were seduced and aligned with the Western faction. It just happened.
Objective: marginalize China to the point of suffocating its integrated circuit industry
In reality, Japan has always been in front of China and on the side of the United States. If there are two countries that can torpedo any integrated circuit manufacturer by preventing access to their technologies beyond the Netherlands and the US, they are Germany and Japan. The first of these supplies ASML, among other essential components, with the ZEISS optics that its most sophisticated lithographic equipment requires. And Japan controls some of the companies that sell lithography machines to Chinese companies. The most important of them all is Tokyo Electron.
The important role of Japan in the global semiconductor industry is beyond doubt.
In fact, his are the devices that are responsible for coating wafers with photoresist in most of the most advanced semiconductor plants on the planet. Curiously, we were able to see them in action just six months ago during our visit to Intel’s factory in Kiryat Gat (Israel). Japan’s important role in the global semiconductor industry is beyond doubt, but what is the role of South Korea?
Samsung, which as we all know is a South Korean company, is competing with Intel to establish itself as the second largest chipmaker behind only TSMC, but there is no direct relationship between the success of this company and semiconductor manufacturing capacity. of Chinese companies. South Korea’s role in this conflict takes other paths. By aligning with the United States and Japan, it is seeking, according to Park Ki-soon, who is a South Korean economic analyst, to isolate China from the global semiconductor chain.
Yoon Suk-yeol, who is the president of South Korea, is about to meet with the Japanese government to strengthen their business relationship, and, according to Park Ki-soon, “isolate China to get the semiconductor supply chain be more stable.” What the South Korean president wants is, ultimately, to have the opportunity to buy from Japan the raw materials, components and lithographic equipment that its manufacturers of integrated circuits need so that they can their industry is emancipated from China.
Currently 20% of all that South Korea exports are chips, and 60% of these semiconductors are bought by China
However, this breaking of its ties with the country led by Xi Jinping will not come free to South Korea, if it finally comes to pass. Currently, 20% of everything that this country exports are chips, and 60% of these semiconductors are bought, precisely, by China. The dependence that South Korea has on its neighbor from an economic point of view is monumental, so it is not clear that its affiliation is going to work out well. When it comes to chips, South Korea, Japan and Taiwan are on the same side. The one from the United States. The ball is now in China’s court.
Cover image: ASML
Vía: South China Morning Post
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