Semiconductor Week Review (November 24-30):
While Chinese chipmakers challenge Korean memory dominance, TSMC and Samsung are tightening restrictions on Chinese customers’ access to 7nm technology. Major South Korean companies will pump $44 billion into AI memory production as Commerce Secretary Raymond Raimondo rushes to complete CHIPS Act funding. Qualcomm and MediaTek are pursuing diverse avenues beyond the mobile market, targeting edge computing and cloud services, respectively.
Chinese chip makers challenge South Korea’s dominance with aggressive pricing
China’s semiconductor industry is experiencing unprecedented growth, with SMIC leading the way with quarterly sales of more than US$2 billion as Chinese memory makers compete aggressively on price. Companies like SMIC, YMTC, and CXMT have gone from insignificant to formidable forces a decade ago, as they have made significant technological advances backed by government support and a huge domestic market. The transformation is clear.
Although SMIC still lags behind world leaders, it has significantly achieved 7nm process capabilities reminiscent of TSMC’s 2018-2019 technology through strategic talent acquisition despite US export restrictions did. In the memory field, CXMT and YMTC are rapidly closing the technological gap with South Korean giants Samsung and SK Hynix, and Morgan Stanley predicts that CXMT’s DRAM market share will exceed 10% in 2024. .
Industry ambitions extend to cutting-edge technologies, with Chinese companies aggressively developing high-bandwidth memory for AI applications and a comprehensive range of technologies that challenge the established semiconductor hierarchy dominated by Taiwan, South Korea, and the United States. This suggests further promotion.
Chip regulations tighten control over China’s AI ambitions
In a strategic move to curb China’s advances in artificial intelligence, TSMC and Samsung have begun a rigorous validation process for Chinese customers seeking 7nm chip manufacturing capabilities. The new restrictions, which took effect on November 11, specifically target high-performance AI chips by restricting specifications such as chip size greater than 300 square millimeters, HBM implementation, and transistor count greater than 30 billion.
While “whitelisted” Chinese customers maintain existing partnerships, the policy particularly affects emerging AI chip makers, forcing them to downgrade specifications or seek alternative solutions. The measures reflect a strengthening of the US strategy to maintain control over advanced semiconductor technology, with industry experts predicting further restrictions starting in January 2025, particularly in areas such as packaging, equipment and design. We anticipate that this may be imposed.
China’s chip sector faces new hurdles as TSMC deploys AI technology
In a significant blow to China’s semiconductor ambitions, TSMC halted production of sub-7nm advanced AI chips for Chinese customers, while domestic players scramble to adapt amid escalating US-China tensions It has become. The move, coupled with the discovery of TSMC chips in Huawei devices and the possibility of tougher sanctions under the incoming Trump administration, has sparked both concern and determination within China’s chip sector.
At IC China 2024 in Beijing, industry leaders including Shenzhen Basic Semiconductor and Moore Threads outlined strategies to overcome challenges, from localizing supply chains to exploring alternative manufacturing technologies. Even though China remains the world’s largest consumer of chips and the Chinese government’s latest economic stimulus package provides some relief, China’s struggles in accessing cutting-edge technology are particularly critical for AI. This highlights the widening technological gap with Western countries in this field.
Qualcomm and MediaTek chart a turning point in business expansion beyond mobile
As chipmakers look beyond smartphones, Qualcomm and MediaTek are pursuing clear strategies in their diversification efforts. Qualcomm CEO Cristiano Amon predicts edge computing market to be $900 billion by 2030, with focus on automotive and IoT sectors, and aims for non-mobile revenue of $8 billion by 2029 That’s what I mean.
Both companies are expanding beyond mobile, but their approaches are very different. Qualcomm focuses on branded platforms in automotive, PC, and spatial computing, while MediaTek focuses on cloud ASICs and networking services, and continues to have a stronger focus on mobile.
Industry experts say that despite MediaTek’s success in disrupting the mobile market, Qualcomm maintains a significant lead in emerging areas such as automotive and edge computing, with its Copilot+ PC initiative demonstrating its technological superiority. It is pointed out that This strategic divergence highlights the evolving competitive environment in the semiconductor industry as companies seek new avenues for growth beyond the traditional mobile market.
Foundry self-regulation signals deepening of China’s technology regulations
In an unprecedented move that signals possible tightening restrictions on China’s access to semiconductors, major foundries such as TSMC and GlobalFoundries are restricting Chinese customers’ access to 14nm chip technology without formal orders from the U.S. government. We have begun to self-regulate access.
This proactive industry response, coupled with incoming Secretary of State Marco Rubio’s criticism of previous enforcement gaps and the CHIPS Act’s classification of 14nm as an “advanced process,” suggests that the incoming Trump administration will push this voluntary compliance even further. This suggests that it may be used as a blueprint for strict controls.
Domestic manufacturers like SMIC are already struggling with limited advanced manufacturing capacity and intense competition, making Chinese chip designers increasingly vulnerable to future restrictions on access to international foundries. This development is therefore particularly important for China’s semiconductor ambitions.
Commerce Secretary rushes to secure semiconductor deals before Trump transition
U.S. Commerce Secretary Gina Raimondo is stepping up a last-minute push to solidify billions of dollars in semiconductor subsidies before a potential Trump administration takes office, directing staff to work overtime and cutting $50 billion in semiconductor subsidies. personally intervening with high-tech executives to facilitate transactions under the CHIPS Act.
TSMC and GlobalFoundries already have binding agreements in place, but the Commerce Department is rushing to finalize deals with industry giants such as Intel, Samsung, and many other manufacturers in the coming months. The stakes are particularly high for Intel, which has received offers of $19.5 billion in combined funding and loans despite its strategic importance to U.S. semiconductor independence, but it has not reached program milestones. are facing delays.
With the transition of power looming as a tough deadline, Raimondo aims to ensure these innovative investments are in place before President Trump’s nominee for Commerce Secretary, Howard Lutnick, takes office. But he has expressed confidence that the program will survive under new leadership.
South Korean chipmaker bets big on AI memory amid competition with China
In a strategic shift reflecting the evolving semiconductor landscape, South Korean memory giants SK Hynix and Samsung Electronics will invest in 2025 to upgrade existing facilities and high-bandwidth memory capabilities rather than adding new production lines. We are currently focusing on expanding the . Together, the companies are investing approximately US$44 billion in advanced manufacturing processes and expansion of HBM, betting big on artificial intelligence-driven demand while navigating the challenges of rising Chinese competition.
South Korean manufacturers’ “natural attrition” strategy of moving to more complex processes may help maintain market balance, but China’s CXMT, which is projected to become the world’s third-largest DRAM supplier by 2026, Rapid expansion threatens to disrupt a carefully calculated approach.
Meanwhile, a surge in AI-related demand led analysts to revise their 2025 HBM forecasts upward from 15 exabytes to 25 exabytes, suggesting bets on advanced memory could pay off despite competitive pressures. suggests.
