Science Technology

US ban, trying to force Samsung, SK Hynix, etc. out of manufacturing chips in Chinese Mainland

As we all know, since last October, the United States has taken a new round of sanctions against China’s chip manufacturing industry.
According to the media, the goal of the United States is to ban the sale of DRAM memory production equipment below 18 nm, NAND flash memory production equipment above 128 layers, and logic chip production equipment below 14 nm.
This makes it impossible for Chinese Mainland to produce advanced chips and can only be purchased from abroad, so our neck will be blocked by the United States.
However, at that time, the United States provided a one-year exemption for Korean chip enterprises in Chinese Mainland, allowing Samsung and SK Hynix to continue to purchase advanced semiconductor equipment to produce chips within one year.
However, although there are exemptions, the ban has a considerable impact on Samsung and SK Hynix. South Korean media even said that the ban was forcing Samsung and SK Hynix to a “desperate situation”.
Why do you say that? Let’s take a look at the performance of Samsung and SK Hynix in China.
SK Hynix’s Wuxi subsidiary in China, which mainly produces DRAM memory, has a revenue of 9524.2 billion won in 2022, a year-on-year decrease of 26.4%, and a net loss of more than 60 billion won (about 2.4 billion yuan).
Samsung’s semiconductor company in Xi’an, China, which mainly produces NAND flash memory, has a net profit of 633.8 billion won in 2022, down 63% from 2021.
In addition to the economic impact, another key reason for this decline is that the ban has led to the dual adverse effects of the market cycle and geopolitics on memory chips.
This is not the point yet. The point is that the United States has a new idea some time ago. It is intended that regardless of the one-year exemption period, Korean enterprises in China should also be cut to one size and not allowed to purchase advanced equipment.
Korean media analysis said that this would lead Samsung and SK Hynix to fall into a crisis of 40% to 50% of their products losing competitiveness due to lack of technological upgrading, because they could not import advanced equipment from the United States for technological transformation and production expansion.
So what will happen? It will force Samsung and SK Hynix not to manufacture chips in China, especially the chip production lines with advanced technology, and have to be removed and transferred to unrestricted places such as Southeast Asia and India.
So what’s the impact? It is of course a huge crisis for Made in China. Some time ago, Hideo Tanimoto, president of Kyocera, said that the U.S. restrictions on China are killing the feasibility of China as an export manufacturing base, and China is no longer the factory of the world.
He means that a series of restrictions will lead many multinational enterprises to slowly move their production capacity out of Chinese Mainland and eventually affect Chinese manufacturing. China may lose its position as a world factory. For example, Kyocera, Dell, Apple, etc., are transferring their production capacity in a planned way.
You should know that Samsung Semiconductor can invest more than 30 billion dollars in China, and SK Hynix also invested more than 20 billion yuan. If it is really forced to move away, it will have a considerable impact on manufacturing in China.
So next, how can we break the situation, how can we act, how can we break the conspiracy of the United States and maintain our status as the factory of the world?