- U.S. restrictions on high-tech fields?Just before the election, showing aspect
- China SMIC, U.S. regulatory reflection benefits? China's top three global investment banks
- China's NAND flash "quality comparable to Korea" equipment
- U.S. presidential election to regulate China's semiconductors no matter who becomes them ↑ Trump will impose legacy sanctions
- Subsidies to U.S., Japan and Chinese companies, need direct subsidies to South Korea
■ Broadcast: YTN Radio FM 94.5 (09:00-10:00)
■ Host: Reporter Cho Tae-hyun
■ Air date: October 30, 2024 (Wednesday)
■ Talk: Chair Professor Kim Yong-seok / Director of Gachon University Semiconductor Education
- Yongin Semiconductor Cluster Infrastructure Investment Is More Important
* The text below may differ from the actual broadcast content, so please check the broadcast for more accurate information.
◆ Reporter Cho Tae-hyun (hereinafter referred to as Cho Tae-hyun): Looking at a recent study. After COVID-19, subsidies to support the country's manufacturing industry have increased significantly worldwide. Among them, support for the semiconductor industry was quite concentrated. So, I think it's a research result that shows how much of the semiconductor industry is now in the global economy. The problem is that the competition for supremacy between the United States and China over the high-tech semiconductor industry is intensifying day by day. Yesterday, another related measure came out in the United States. The presidential election will be held next week, and the conflict will become more serious after the presidential election. Today, let's analyze this story in detail. I'll connect you to Kim Yong-seok, director of the semiconductor education center at Gachon University. Is the director here?
◇ Chair Professor Kim Yong-seok / Director of Gachon University Semiconductor Education (hereinafter referred to as Kim Yong-seok): Yes, hello.
◆ Cho Tae-hyun: This is what was told yesterday morning from our perspective. The U.S. government will restrict China's investment in high-tech fields that could pose a threat to national security. What is this about?
◇ [Kim Yong-seok] Actually, this is a move that was already taken two years ago. I think it sent a stronger message than before. If I briefly explain it, it says that it will be implemented from January 2nd next year. technology that poses a threat to national security Companies that want to invest in China with this technology or related fields should report it to the U.S. Treasury in advance. The reason is that China will eventually use cutting-edge technology to develop its military capabilities, so it will prevent it. That's important, and I think the next strong message is to try to emphasize to the American people more ahead of the election.
◆ Cho Tae-hyun: Okay. What I paid attention to this time was AI, advanced semiconductors, and quantum computers, and if you look at them, they are all directly related to the military and security fields. However, I don't think there are people who don't know how these advanced semiconductors and other technologies are connected to national security, so please explain this part.
◇ Kim Yong-seok: Yes. We often say that semiconductors are the rice of the industry. That's what people say because a lot of people go into TVs and smartphones and computers, but in fact, semiconductors are used not only in home appliances, but also in aerospace and quantum computers, so you have to look at them as civil-military combined technology. Especially, hasn't the era of artificial intelligence begun? But in fact, it is semiconductors that opened the era of artificial intelligence. So semiconductors are the key. In particular, AI semiconductors are used a lot for actual military purposes. For example, even if we see it in the war in Russia and Ukraine, we are attacking a lot with drones. So, in a way, the flow of war has such a big impact that it has an impact, so in a way, the nature of the U.S.-China semiconductor conflict should be viewed in terms of security rather than this technology.
◆ Cho Tae-hyun: Okay. It's no exaggeration to say that it's an era where you can't really do anything without semiconductors, but I think that's why they're competing more sensitively. But so far, this has not been the only measure to keep China in check in the United States. What kind of things were there?
◇ Kim Yong-seok: If we want to make semiconductors. Shouldn't we design it and manufacture it? It can be divided into two, and as a result, the United States has taken many measures to limit design tools or manufacturing equipment. Because in the United States, for example, in the case of Polycar Tool, we also have companies like Synopsis Cadence. There are also companies such as Applied Materials and Lab Research, and the Netherlands, which is an ally, is letting ASML join.
◆ Cho Tae-hyun: That's right. Yes.
◇ Kim Yong-seok: Anyway, we've done it in a way that limits this design tool and equipment. If you look at what we've done so far, for example, system semiconductors are sold to the United States. When it comes to such standards using fintech for logic chips, only up to 14 nanometers is suggested not to sell this equipment for fine processing below.
◆ Cho Tae-hyun: Only provide old technology.
◇ [Kim Yong-seok] That's right. So what we call legacy. So, you can sell equipment up to legacy-related things, but don't have such equipment for ultra-fine processes below that. For example, DRAM is also limited to 18 nanometers. Next, Nvidia makes AI chips, so don't sell AI chips to China for Nvidia. So, I started with AI-H100, which is a high-end product, and I have H800 in that product. That's how we took measures to prevent them from selling all of that.
◆ Cho Tae-hyun: So overall, so far, we've been regulating it so that we can't provide new technologies and only provide old technologies in a limited way, so did this pay off? Rather, it helped China become self-reliant. I think there's also this evaluation.
◇ [Kim Yong-seok] Yes, that's right. In fact, semiconductors are not necessarily made with ultra-fine processes. For example, there is an AP called an application processor that goes into a smartphone, and it is usually used as 3 nano or 4 nano, but for example, image sensors or PMICs that we use are sufficiently made by legacy processes. As a result, China has invested a lot mainly in legacy, and the effect of that investment is showing a lot of effect. So, for example, in the case of Chinese semiconductors, there is a company called SMIC, which is TSMC. So, I'm doing a foundry. So it's a company that makes chips after being designed.
◆ Cho Tae-hyun : Consigned production company.
◇ Yong-seok Kim : Yes. However, this company entered this year and ranked third after TSMC and Samsung Electronics in the first quarter of this year. So in a way, we're in the top three in the world. The reason for this is that there are so many chips that are made using legacy processes, not just fine processes. And this is what happened when I swept all the Chinese electronic chips. So, first of all, it's been quite successful in the foundry field. Next, if you look at the design, you may have seen such a report last year, but SMIC used the 7-nano process called Huawei Smartphone Mate 10. There is a subsidiary in Huawei, and it was designed by a company called HiSilicon. So in the end, we were able to design and manufacture the ultra-fine level. You can see it like this. So, it's a pretty big one. Then, the system semiconductor can be explained like this. Then what about the memory? Even if you look at the memory, NAND flash is now done by a company called Yangtze Memory, but in the case of that company, Apple has already verified its performance. So two years ago, Apple acknowledged that it can be adopted enough for entry-level types. So NAND flash has almost followed Korean companies. Then there's D-RAM, and D-RAM is called Changsin Memory. So in the case of Changsin memory, it is a legacy that mainly goes into smartphones or laptops now. Anyway, the level has risen to the point where we make chips now up to DDR4 or recently DDR5.
◆ Cho Tae-hyun: So overall, overall, China's semiconductor capabilities are not as negligible as before, but have followed to the point where competition is possible to some extent. You can see it like this, right?
◇ [Kim Yong-seok] That's right. So what I just told you is system semiconductors and memos. The next important thing is to develop equipment, and in the case of Legacy, they made it themselves. So, for example, there is a company called Shanghai Microelectronics that makes 45 or 65 nanometers of equipment and is said to be very difficult, and they made about 28 nanometers of equipment.
◆ Cho Tae-hyun: I mean, the performance is poor, but it's been following in a lot of ways. Even the equipment is like that.
◇ [Kim Yong-seok] That's right. So even the equipment, so I can tell you that it is at a considerable level.
◆ Cho Tae-hyun: Then the U.S. presidential election now. I don't know yet what the outcome will be, but won't the pressure from the U.S. government continue anyway after the U.S. presidential election? When that happens, what do you think about the possibility of China following in this situation?
◇ Kim Yong-seok: But I think no matter who it is, whether it's Trump or Harris, sanctions against the United States will remain. But the fact is, I think Harris will accept Biden's policy as it is, but Trump will be a little different. So Trump, for example, is likely to impose more sanctions on the legacy side.
◆ Cho Tae-hyun: Even that side (legacy).
◇ Kim Yong-seok: Because you've already seen a hole in this. So that's a possibility. And the other thing is actually, Trump recently said about subsidies, but why are they giving subsidies now? They don't need a penny to build those foreign companies on U.S. soil. We talked about this, too. So maybe there will be some changes in subsidies as well. Of course, it's not very likely to be carried out as Trump said, but there's a good chance that it's going to be dealt with Biden's semiconductor industry promotion law anyway.
◆ Cho Tae-hyun: Okay. There is one variable in the United States, such a change in the system. And if China is hit, Korean semiconductor companies will have to sell a lot of Chinese products, and this part is inevitable. Current Situation How do you grasp the current situation of the semiconductor industry in Korea?
◇ Kim Yong-seok: In fact, in Korea, we have no choice but to lose a large part of the Chinese market. So I'm directly affected by that. What's important is that we're actually collaborating a lot with China even though we're related to semiconductors. The core of this semiconductor is silicon wafers.
◆ Cho Tae-hyun: That's right.
◇ Kim Yong-seok: That wafer also imports about three-quarters of it from China. There are a lot. Then, not only semiconductor wafers, but also rare earths used in abrasives, or metals should be wired like this, but tungsten is used. Those are also imported from China.
◆ Still.
◇ Kim Yong-seok: And then compound semiconductors. In particular, it is used for military purposes, and in the case of compound semiconductors, germanium is used, and we import about 60-70% of it from China. That's why when it comes to public relations, we only talk about the market. It's not just that we lost the market, but we're actually working very closely in the semiconductor industry, so I'm actually a little worried. And especially in China, rare earths. They're saying they'll retaliate in the future with rare earths, so I think we'll have to come up with a response anyway.
◆ Cho Tae-hyun: Not only semiconductors but also these things are bound to act as variables because they are in China at the center of the overall supply chain of raw materials. So, the Korean government and the political community are discussing various support measures, but they still showed a lot of negative positions on direct subsidies. How does the professor here see the need for direct subsidies?
◇ Kim Yong-seok: I'm actually in the position of giving subsidies. Because even in the U.S., they eventually subsidize their own companies, Intel and Micron. Also, in Japan, they say they are Riders, so they are planning to do semiconductors in a united form anyway, but they are also giving subsidies there. Of course, China is giving subsidies to the foundry companies mentioned earlier, such as SMIC. But I don't have any in Korea right now. The subsidy. In other words, from a competitive standpoint, in fact, other companies are ahead. It's true that we have to give subsidies to Korea because we're playing in front of them, but the problem is that the state can only provide strong finances. I think that's what worries me. So I think we should make a plan in the direction of subsidies anyway. In particular, the government is making a large semiconductor cluster in Yongin right now.
◆ Cho Tae-hyun: That's right.
◇ Kim Yong-seok: I think it's very important to invest in infrastructure so that we can supply less water or power problems. Of course, it's good to give subsidies right away, but that's that. That's something we have to look at with financial resources, so I think we should do a good job of investing in infrastructure.
◆ Cho Tae-hyun: Okay. I've even heard that China is pouring in a huge amount of money and should consider direct support, not just indirect support, at a time when competition for semiconductors is intensifying. So far, we've talked with Kim Yong-seok, a chair professor at Gachon University. Thank you for talking today.
◇ [Kim Yongseok] Yes, thank you.
[Copyright holder (c) YTN Unauthorized reproduction, redistribution and use of AI data prohibited]