Chinese semiconductor foundry firms are persistently adopting aggressive pricing strategies, putting relentless pressure on the market share of South Korean 8-inch wafer manufacturers. In this evolving landscape, South Korean industry insiders are eyeing potential benefits if the US expands its sanctions on China to encompass more mature semiconductor processes.
Citing industry sources, South Korean media outlet Theelec reports that key players like DB Hitek are closely monitoring the shifting sands of US policy towards China's semiconductor sector.
Should the US broaden its sanctions against China, US and European semiconductor design firms that have traditionally relied on Chinese foundries may find themselves pivoting towards Taiwanese and South Korean alternatives, analysts say.
DB Hitek appears poised to capitalize on this opportunity, reportedly targeting European and American firms currently outsourcing to Chinese foundries. Sources indicate that other South Korean foundry companies share a similar strategy.
Industry insiders in South Korea are closely watching the potential market dynamics that could emerge from US sanctions against China's mature semiconductor chips. The threat is real for South Korean 8-inch wafer manufacturers, who are currently facing intense competition from low-cost Chinese rivals.
Despite efforts to reduce prices, South Korean firms are grappling with challenges to boost their capacity utilization rates. As of Q1 2024, DB Hitek's capacity stands at 75%, lagging behind industry giants like Samsung Electronics and Key Foundry, a subsidiary of SK Hynix.
In this context, South Korean industry leaders are keenly interested in the US's stance on sanctions against China. At a recent meeting in Leuven, Belgium, the US and EU issued a joint statement addressing market distortions caused by mature process chips and expressed intentions to collaborate with like-minded nations on these issues.
The US has been ramping up efforts to curb China's semiconductor ambitions, announcing export bans on advanced semiconductor equipment to Chinese firms since October 2022, including DRAM below 18nm and system semiconductor production equipment below 14nm.
According to the Semiconductor Equipment and Materials International (SEMI), China accounted for 34.4% of the global semiconductor equipment purchasing in 2023, surpassing one-third of the total market.
Despite US sanctions, China's appetite for semiconductor equipment remains strong, as reported by South Korean media ET News. The US is said to be preparing additional measures to counter China's significant investments in the semiconductor sector.
