JVTech News China and the United States have reason to worry, as South Korea and Taiwan already seek to increase their advantage in chip production
Published on 10/11/2023 at 5:58 p.m.
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When the media, including JVTECH, talk about the chip industry, they almost always focus on the battle between the two elephants on opposite sides of the world: China and the United States. It seems important to us to put the church back in the center of the village. Today, South Korea and Taiwan are a little ahead of the rest of the world.
Reminder on the global situation of the chip industry
Even though JVTECH often talks about the latest developments in the chip industry, we refuse to assume that everyone is aware of what’s going on behind the scenes in the tech world. Because yes, the semiconductors in question today are small, cutting-edge components that are found in all tech products, from smartphones to cars, including game consoles and televisions.
For geopolitical and economic reasons, the United States has been trying to block China’s chip industry for quite some time. To do this, Uncle Sam recruited allies all over the world (Netherlands, Germany, South Korea, Japan… in short, all the heavyweights in this industry). This coalition has implemented several series of economic sanctions in order to deprive China of modern and powerful chips, necessary for the technological development of the country. (which is becoming more and more important, especially in the context of the AI race).
The harshest economic sanction will come into force in January 2024. The latter provides for the end of deliveries of deep ultraviolet lithography (UVP) machines to China. Do not think that it is enough for China to build its own UVP machines, this technology is extremely complicated and expensive. The world’s leading experts estimate that it will be impossible for China to manufacture lithography machines to today’s standards on its own before 2030.
South Korea and Taiwan: heavyweights in the chip industry
Now that this brief recap is done, let’s get back to the news. The fight for supremacy in the semiconductor industry is intensifying. In recent years, the United States and China have focused on optimizing their semiconductor production capacities, complemented by various strategies aimed at weakening their major competitors. Too forgotten, two other nations, South Korea and Taiwan, occupy a preponderant place in the global technological landscape.
On the other hand, Taiwan is focusing its efforts on strengthening its dominant position. Because yes, it is the Taiwanese company TSMC which is the leader in the chip market. Moreover, let us point out here that the geopolitical tensions between China and Taiwan are extremely visible when we look at this particular industry. Taiwan is supported by the United States and its allies and continues to receive the best lithography machines in the world (UVE), while the Xi-Jinping government continues to be boycotted.
Korea and Taiwan move ahead and break knots with China and the United States
If you followed the latest Apple conference, you surely heard Apple boast of having the world’s first smartphone chip engraved in 3nm. It is TSMC which is responsible for producing Apple’s chips. Unfortunately, the Taiwanese company encountered a small problem with these little jewels engraved in 3 nm. A very complicated problem to overcome since Samsung also has to face it.
This problem concerns the efficiency of the nodes of the chips engraved in 3 nm. Nodes, to put it simply, are plates that contain a large number of semiconductors. Samsung and TSMC aim for a yield (percentage of functional components produced) above 60% for their chip nodes. The current efficiency of the nodes of the chips engraved in 3 nm is rather around 55%. Clearalmost half of the chips produced by these two companies are thrown away because they cannot be marketed.
Samsung and TSMC are therefore working to improve the efficiency of their production nodes. The South Korean company, which started production of these elements in June 2022, is slightly ahead of TSMC in terms of schedule, but it must achieve a yield of at least 70% to attract significant buyers.
Meanwhile, the United States is not sitting idly by as Intel works to develop the coveted 3nm chips. For its part, China plans to invest billions of dollars to stimulate its semiconductor industry, but, as you have understood, the Middle Kingdom has a good chance of falling behind.
2023-10-11 15:58:28
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