More than a year ago, the US government proposed to establish the so-called Chip 4 Alliance composed of the US, Japan, South Korea and Taiwan to ensure the global semiconductor supply chain and coordinate policies, subsidies and joint R&D projects. But even one year after the announcement of the initiative, countries still failed to agree on the agenda of the preliminary meeting. The Financial Times (opened in the new label) reported that potential partners are too worried about this issue.
The governments of Japan, South Korea and Taiwan have traditionally had good relations with the United States, and their companies have worked closely with their American partners. However, South Korean companies such as Samsung do not want to share their trade secrets with Taiwan counterparts such as Taiwan Semiconductor Manufacturing Co. In addition, the political relationship between South Korea and Japan is tense. No one is willing to support the R&D work of Intel and Micron, which are headquartered in the United States. Everyone is worried about China’s response to the new alliance.
Companies from Japan produce 3D NAND for China and various high-purity raw materials sold to chip and LCD manufacturers in South Korea and Taiwan. Japan is trying to revive its semiconductor industry, so the government has attracted TSMC to Japan and is establishing a research and development center to provide training for scientists and engineers. However, it is doubtful whether Kioxia is willing to cooperate with Samsung or SK Hynix to develop basic technology, because it will have to share specific technical know-how with its competitors.
In South Korea, Samsung Foundry is worried that its materials or transistor design and other technologies may be used by competitors TSMC or Intel, which will not share their knowledge with competitors. At the same time, Samsung Memory and SK Hynix have little interest in using their research capabilities to promote the computer memory industry in Japan or Taiwan. In addition, they compete fiercely with each other.
Taiwan’s logic and memory chip manufacturers are clearly ahead of their competitors from mainland China (SMIC International, Huahong, Yangzi Memory, etc.). Nevertheless, they have purchased a large amount of raw materials from China. If the Chip 4 Alliance prohibits them from doing so on the grounds of supply chain security, they will hardly be happy.
But everyone’s biggest concern seems to be China. On the one hand, Japanese companies such as Tokyo Electron and Nikon sold a large number of tools for chip production to China. Cooperation with the United States to develop the next generation chip production technology may be detrimental to their business (because the United States wants to restrict the export of leading chip manufacturing equipment to Tianxia). On the other hand, Samsung and SK Hynix have quite advanced memory factories in China. They are worried about whether the potential next generation process technology based on the basic breakthrough of joint research can be applied to these wafers.
“Our position is that [the Korean government] should first seek China’s understanding on the chip 4 alliance, and then negotiate with the United States,” said Kye Hyun Kyung, head of Samsung’s electronic equipment solutions department, in his dialogue with the Financial Times of the United Kingdom, who is responsible for overseeing the global operations of memory, system LSI and casting business departments. “We are not trying to take advantage of the US China conflict, but to find a win-win solution.”
Generally speaking, although some basic rules have been formulated for the supply chain, specific policies on investment, manufacturer subsidies and joint R&D projects may be meaningful on paper, but actual chip manufacturers may not be as interested in them as the US government. At least for now.