Semiconductor nationalism is on the rise in Asia

Semiconductor nationalism is on the rise in Asia

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Hello from Singapore, before the Omicron variant spread too widely, many expats and residents took advantage of the new travel route and fled the island country before the holiday, so they felt very quiet. By global standards, the country’s social distancing rules for the pandemic are still strict — dining out is still limited to groups of five — and many people are eager to change the landscape.

Today’s report explores how Asian countries, like Western countries, have long criticized Chinese government subsidies for their efforts to promote self-sufficiency in semiconductor technology, and how they can now learn from Beijing’s scripts.

Concession waters Look again at the difference in vaccination rates between rich countries and poor countries.

We hope to hear from you.Send any ideas to [email protected] Or email me [email protected]

How Tokyo and Seoul are following China’s chip leadership

Self-sufficiency and self-reliance are indispensable. In the past 18 months, you may often hear these words related to the semiconductor chip industry.

The governments of major economies including the United States, the European Union, Japan, and China and their top technology companies have accelerated their efforts to develop internal core technologies that run the basic components of everything from smartphones, refrigerators to missiles.

Until recently, Asian countries like the United States and the European Union have criticized the Chinese government for heavily subsidizing onshore chip production. The big change brought about by the pandemic is that now they are copying it.

National security concerns and deteriorating tensions between China and the United States — and the much-discussed shortage of global chip supply related to the pandemic — have changed the tone.

For those who have not paid attention to what China has done in recent years, here is a brief report.

As part of its “Made in China 2025” policy, as friction between Beijing and Washington intensified during the Trump administration, China has accelerated its efforts to internalize semiconductor production.The ongoing tensions under Joe Biden’s leadership, especially the tensions related to the flow of technology to China, have inspired Those existing plans Be more self-sufficient.

Generous subsidies and increased investment from state-supported funds focused on the industry have prompted private companies to respond to the call of Chinese President Xi Jinping.

The sister newsletter of the Financial Times last month #techAsia disclose Oppo is the world’s fourth largest smartphone manufacturer, and its goal is to use its own chips in its high-end phones as soon as 2024. Semiconductor Manufacturing International Corporation SMIC is Beijing’s core company in promoting self-sufficiency in chip manufacturing. The company has increased investment and is trying to move towards smaller chips. Other tech giants are also trying to design their own chips, including TikTok owner ByteDance, e-commerce giant Alibaba, and search and artificial intelligence company Baidu. Huawei has begun to invest in emerging Chinese chip companies because the telecommunications group has accelerated its efforts to achieve self-reliance in semiconductor technology in the face of US sanctions.

Nevertheless, according to market research firm data, the Chinese government still has a long way to go to meet 70% of its semiconductor demand through domestic supply. Last year, the self-sufficiency rate was estimated to reach 16%. Integrated circuit insight.

So, how can other Asian countries change their strategies, many of which initially joined the European Union and the United States, criticizing China’s state aid to the industry before the pandemic broke out?

Let’s start with Japan, it’s already launched Full response Reverse the outsourcing of complex technologies. The country turned to foreign companies to build domestic chip factories to provide generous subsidies and other support for such private sector investment. Participating companies must give priority to Japanese shipments. Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC), the world’s largest foundry chip maker based in Taiwan, will use this impetus to reveal plans to build its first Japanese factory last month.

At the same time, South Korea began to promote self-sufficiency more than two years ago when the country realized that it was overly dependent on Japanese imports of semiconductor materials in its trade dispute. Now, the South Korean government, whose industrial backbone of automobile production has been hit by supply shortages, is investing in research and development projects to achieve self-sufficiency in automotive semiconductors. Seoul said this year that by 2030, Won510tn (US$42 billion) will invest in chips, most of which will come from private companies in the country.

Critics liken this localization to turning back in time and believe that it inhibits innovation in chip technology. TSMC founder Zhang Maoye, now retired, is a politician in Taiwan’s chip industry. Bashing effort, Saying they will increase costs and may slow down technological progress.

Some analysts warn that expensive government intervention may eventually lead to overcapacity of certain chips, especially products that are less complex (and therefore less profitable).

It may also be ineffective, spawning a large number of new semiconductor companies that are still not self-sufficient.In China, the number of companies in this industry has tripled this year Former seafood manufacturer Buy a loss-making semiconductor group.

This approach may also expose the World Trade Organization to many complaints about unfair trade practices and competition. As Zhang warned: “What may happen is that after spending hundreds of billions and years, the result is still an insufficiently self-sufficient and costly supply chain.”

For the time being-as far as Asian, European and American governments are concerned-these warnings will fall on deaf ears.

Concession waters

Yesterday, we talked about how poorer countries are trying to vaccinate their populations. Expect more in the coming days about whether this reflects the indecision of global governments, supply chains, vaccines, or a mixed failure of the three.

Now, we want to show you a chart with updated data from September to the present. It shows that the booster injections provided by the richest countries are more than the total dose provided by the poorest countries. Claire Jones

this Bargaining Chip Crisis It might be over.Nikkei report ($) Inventory rise Renesas Japan’s, Infineon, STMicroelectronics with Texas Instruments The end of September indicated that the global shortage of chips used in the automotive industry is improving.

A case South Korea applies for CPTPP: According to reports, it will become one of the biggest beneficiaries of the agreement, with an annual income of US$86 billion. this Nikkei Index ($).

New York Times In-depth study how supply chain The problem is affecting one Snowboard supplier.

Federal Reserve Chairman Jay Powell, Meanwhile, there is warn U.S. lawmakers expect more Supply chain pain Leading due to the Omicron variant. Francis Carregalado and Claire Jones

European Express — An important guide to understanding important matters in Europe today.register here

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