Input 2021.03.25 14:25
The US government and local companies also join… Aiming at TSMC in Samsung and Taiwan
Samsung’s absence may delay investment decisions
It is evaluated that the appearance of a new competitor at Samsung Electronics, which is busy on the way to capture TSMC, the world’s number one foundry, will be negative. On the other hand, there are opinions that it will be difficult for Intel to close the technological gap between TSMC and Samsung Electronics, which have already solidified the world’s No. 1 and No. 2 foundries, in a short period of time. However, it is unclear whether Samsung Electronics will be able to make timely investments amid the bad news of the’absence of total number’. Samsung Electronics is still worrying about the amount of facility investment this year.
◇ Article 33 vs 31Joe vs 22article… Accelerating the war of semiconductors
Intel announced on the 23rd (local time) to enter the foundry business and announced the investment amount of 20 billion dollars. Intel predicts that the foundry market will grow to 100 billion dollars (about 113 trillion won) in 2025. Prior to this, TSMC announced in its earnings release in January that the amount of facility investment this year will reach up to $28 billion. This greatly exceeded market expectations.
Samsung Electronics is spared no words about the specific amount of facility investment this year. In the case of last year, it spent 32.900 trillion won, an increase of 46% from the previous year. This is the largest ever, and considering TSMC’s actions at the beginning of this year, the outlook is dominant. IC Insights, a global market research firm, predicts that Samsung Electronics’ semiconductor facility investment this year is expected to be $28 billion, which is about $500 million higher than TSMC ($27.5 billion). Kim Ki-nam, vice chairman of Samsung Electronics’ DS division, said at the regular shareholders’ meeting on the 17th, “We will make efficient investments in a timely manner to make up for the shortcomings such as the number of customers and production capacity.”
The aggressive investment movements of semiconductor manufacturers reflect the expectation that they will enter the super cycle (long-term boom). With the semiconductor boom in 2017-2018, semiconductor manufacturers reduced their facility investments in 2019, causing a supply-demand imbalance in recent years. It takes at least two years to build a new semiconductor production line and mass-produce it, but the present is in line with this time difference. The International Semiconductor Equipment and Materials Association (SEMI) estimates that this year’s global semiconductor equipment investment amounted to $74 billion (approximately 82 trillion won), an increase of 16% from the previous year, and will continue double-digit growth next year.
“Semiconductors are the nails of horseshoe horseshoeing in the 21st century.” US President Joe Biden compared semiconductors to horseshoe nails in February when signing an executive order to review the supply chain of four items, including semiconductors and automobile batteries. . It emphasized that semiconductors are a key item directly connected to national security. This is an evaluation that the US has been calculated to take back the semiconductor sovereignty that has passed to Asia.
A month later, Intel announced the reconstruction of its foundry business. In 2018, Intel drastically reduced its foundry business because of its poor profitability. However, as the foundry market has grown rapidly in recent years, it has declared its business re-entry. “Intel is back,” said Intel CEO Pat Gelsinger. Intel’s entry into the foundry business is like aiming at TSMC and Samsung Electronics, which occupy the first and second place in the existing foundry industry.
Thanks to the full support of the US government, local companies also appear to be joining forces. At the first official seat after the inauguration of Gelsinger CEO, Satia Nadella, CEO of Microsoft (MS), Arvind Krishna, CEO of IBM, and others emphasized collaboration together. Intel emphasized that TSMC and Samsung Electronics’ key customers, Google, Amazon, and Qualcomm, are also supporting Intel’s business. It is also impossible to rule out the possibility that existing customers will replace the supplier with Intel. US Secretary of Commerce Gina Rumando said, “It will help to uphold US technological innovation and leadership and strengthen national security.”
According to the market research firm Trend Force, TSMC ranked first with 56% of the world’s foundry market share as of the first quarter of this year. This was followed by Samsung Electronics (18%), Taiwan UMC and US Global Foundry, respectively, 7%, and China SMIC (5%).
There are mixed prospects as to the impact of Intel’s re-entry into the foundry business on Samsung Electronics. It is observed that Intel will not be able to catch up with the know-how accumulated over a long period of time, along with concerns that the number of competitors will increase and become negative.
Ye-rim Lim, a researcher at Korea Investment & Securities, said, “Intel’s entry into the foundry business will be negative for TSMC and Samsung Electronics in that a new foundry supplier will be added.” did.
On the other hand, there are observations that it will be difficult to narrow down the technological prowess of TSMC and Samsung Electronics in a short period of time considering Intel’s process. Intel is currently based on a 10 nanometer (nm·1 nm is 1 billionth of a meter) process, but TSMC and Samsung Electronics are producing products in the 5 nm process, and development has begun to narrow it down to 3 nm.
In particular, it is essential to secure extreme ultraviolet (EUV) equipment produced by ASML in the Netherlands in order to increase the production of advanced processes below 5 nm. EUV is the only production and supply of ASML in the world, and is considered a key equipment for the production of semiconductors of 10 nm or less. The price per unit is known to be about 180 billion won, but only 31 units shipped last year. This means that production is limited. It is expected to produce 40-50 units this year, and it is known that orders have already been received up to next year’s quantity.
However, a variable is that Samsung Electronics may not be able to set the direction of the semiconductor business in time due to the absence of vice chairman Lee Jae-yong. At the beginning of this year, Samsung Electronics announced in a conference call that was made after the 4th quarter of last year, “We will make a meaningful M&A within 3 years”, but at the recent shareholders’ meeting, Vice Chairman Kim Ki-nam said, “It is difficult to specify the timing because it is uncertain internally and externally. “I said. It can be interpreted as expressing the situation in which the decision-making system was paralyzed due to the absence of the total number.