(News Focus) S. Korean chipmakers face US-China balancing act for market supremacy

SEOUL, Nov. 26 (Yonhap) — Concerns are growing that SK hynix Inc.’s plan. to overhaul its Chinese factory with an advanced chip machine could be jeopardized by opposition from the United States.

Earlier this week, during a radio interview in Seoul, U.S. Trade Representative (USTR) Katherine Tai effectively acknowledged that Washington had resisted such attempts by the South Korean chipmaker to bring advanced machinery to its chip factory in Wuxi, China.

“There are legitimate concerns about the risks to national security in terms of where this technology will end up,” she said, implying that such high-tech tools could be used to enhance China’s military capabilities and other strategic industries.

The technology in question is the extreme ultraviolet (EUV) lithography from the Dutch company ASML Holding, essential to package smaller and smaller transistors in microchips to make them faster, more powerful and more energy efficient.

The precarious geopolitical situation in which SK hynix finds itself stands in stark contrast to a recent announcement by Samsung Electronics Co., the world’s largest producer of memory chips, to make a US$17 billion investment in the US to enhance its competitive advantage. in the global semiconductor industry .

Two days after Tai made the comments, Samsung unveiled a plan to build a new chip factory in Taylor, Texas, to produce advanced chips used in mobile, 5G, high-performance computing and artificial intelligence applications. based on EUV technology.

Washington welcomed the news, saying: “Securing U.S. supply chains is a top priority for President Biden and his administration,” and the decision will help “protect our supply chains, revitalize our manufacturing base and create good jobs here at home.” “.

Samsung has been working closely with ASML on technical breakthroughs in semiconductor development since the early 2000s. It is a close partner, an investor and also a customer of the Dutch company.

Samsung has a 1.5 percent stake in ASML stock and has invested hundreds of millions of dollars in developing next-generation chip solutions.

In March last year, the South Korean technology giant became the first in the chip industry to successfully adopt EUV technology in DRAM production.

The company last month began mass production of its smallest, 14 nanometer (nm), DRAM, based on the technology, which increased wafer productivity and reduced power consumption, both by about 20 percent.

SK hynix, the world’s second largest memory chip maker after Samsung, is a latecomer when it comes to adopting EUV technology.

After bringing the EUV equipment into its Icheon factory in February, the company began production of the EUV-based 10nm chips in July.

SK hynix CEO Lee Seok-hee said Monday the company will respond “sensibly” to US-China trade tensions that could cloud the chipmaker’s plan to upgrade its factory in China. apply the same technology in our Chinese factory.”

The company’s spokesperson told Yonhap News Agency on Friday that there had been no discussions about bringing EUV equipment to China, nor an immediate plan to do so, and that it was premature to discuss any US restriction. regarding the plan to review it. its Chinese factory.

But the fact that the CEO raised the issue with US officials during his visit in July shows how busy the company is trying to balance the diplomatic tension and trade war between the US and China.

The former US government successfully lobbied the Dutch government last year to effectively block the sale of ASML’s EUV machine to a Chinese customer, on national security grounds. And the Biden administration showed no intent to reverse that policy.

Despite unexpected challenges, SK hynix signed a five-year contract with ASML earlier this year to purchase approximately 20 more EUV machines, a major investment to upgrade facilities and increase competitiveness.

SK hynix is ‚Äč‚Äčestimated to have two or three EUV machines, much smaller than the 17-19 machines owned by Samsung and about 40 by Taiwan Semiconductor Manufacturing Co (TSMC).

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