Since the launch of the “big fund” in 2014 for the mainland Chinese market, the semiconductor industry is booming in the country, but now with the trade restrictions, more fuel has been added to the fire. , and the scene of the last two years begins To be concerned because obviously this situation slows down development to the point where Europe understood that it should not “depend” so much on China and put more meat on the spit to promote the semiconductor industry.
The semiconductor industry depends on China
The semiconductor industry has exploded in China since this injection of funds in 2014, and has grown by leaps and bounds over the past six years. In the United States, Europe, Japan and South Korea, the development of this industry has been slower, step by step, with much quieter growth.
Now, with the emergence of trade restrictions, a barrier has been placed between two identical industries but operating at different rates in an attempt to “slow down” China in terms of development, which seems unlikely when the simplest would have been to merge the two forces to promote even faster development, but above all more homogeneous, which will benefit everyone.
Due to the restrictions, trade and commerce between China and the international semiconductor market is deadlocked in many cases and to the detriment in others as there are several companies that have already left the countries and many others looking to do what.
Despite this, mainland China is the world’s largest semiconductor consumer market, as there are a large number of international companies that base their business in the Asian country, including the sale of chips and raw materials. Also, the most advanced wafer factories are there, and that includes factories from IDM, TSMC, Samsung, SK Hynix and Intel, for example.
To put that in perspective, 41.57% of South Korea’s semiconductor imports come from China. On the other hand, even after Trump’s restrictions on Huawei with which Samsung and SK Hynix’s exports to China were expected to decline, in the end, due to COVID, the reverse effect was generated and Chinese demand for semiconductors has been noted. increases.
In other words, the US government has imposed vetoes in an attempt to slow down the Chinese market, and while it is true that in some segments this poses a lot of problems in the industry, the reality is that the world continues to depend too much. of China in this regard in order to be able to become independent from its industry.
China also depends on the rest of the world
Mainland China has a large market, but the overall level of semiconductor technology is relatively low, especially for high-end products, whether they are logical such as high-performance processors, GPUs, FPGAs or DRAM memory. Analog devices and chips are not yet self-sufficient and depend on imports: in other words, China must also import to make the products it then exports.
At present, the annual import of chip components into China has exceeded $ 300,000 million, so Chinese semiconductors also depend on the rest of the world, and a lot; if there was a total shutdown of trade with China, they could not continue making crisps, no more, no less.
In the semiconductor industry, the whole market was initially based on China, and China was also based on the international situation. If the initial pace of development can be maintained, a complementary and harmonious situation can arise, unless the United States continues on the same path that President Trump began.
And it is that these restrictions on international trade have upset the balance, not only by dividing China from the rest of the world, but also by causing a certain degree of fragmentation within each of the countries. For example, in the European, Japanese and Korean markets, the semiconductor business community tends to restore the initial state of open trade (proof of this was the CFO of ASML saying that if the US forbidden to export their machines to China from there, they would do it from Holland), but in the end it all depends on the regulatory agencies of these markets.
In China, the different trends of independent R&D and open cooperation have become more evident, and the debate has become increasingly fierce. All of this has added more uncertainty to the development of the semiconductor industry, and the reality is that instead of seeking partnership for mutual benefit, what is achieved is that the industry is stagnant by a thought of “Neither to eat nor to leave. eat ”is what the Trump administration did.
