Europe seeks to gain market share of semiconductors

Amid the global restructuring of the semiconductor supply chain led by the U.S. to exclude China, China has embarked on a large-scale joint investment with European semiconductor companies. China's urgent need to secure technology has aligned with Europe’s drive to increase global market share by making up for the vacuum left by China owing to the export restrictions exacted by the U.S.

According to the South China Morning Post on Thursday, Switzerland-based automotive semiconductor powerhouse STMicroelectronics (STM) and China's San'an Optoelectronics jointly announced an agreement to establish a $3.2 billion semiconductor joint venture in Chongqing, a key manufacturing hub in China. The Chongqing government will also provide funding for this joint venture.

The new company plans to produce silicon carbide (SiC) semiconductors. SiC semiconductors, which are used in electric vehicles, solar power, and wind power sectors, are an area where China has a competitive advantage. In August of last year, the United States placed SiC semiconductors on the list of export restrictions, prohibiting their sale to China without U.S. government approval. China's decision to expand SiC semiconductor production facilities is seen as an attempt to bypass the restrictions. Simon Lin, CEO of San'an Optoelectronics, expressed the expectation that the joint venture with STM would be a major driving force for the widespread use of SiC in the Chinese market.

The SCMP said the joint venture between STM and San'an Optoelectronics is seen as a demonstration of China's determination to maintain its semiconductor competitiveness, particularly focusing on the 28nm (nanometer) mature process, which is not considered an advanced process, given that the US is regulating the export of advanced semiconductor equipment and technologies. In October last year, the U.S. effectively banned the export of equipment and technology capable of producing system semiconductors below 14nm, DRAM below 18nm, and NAND flash memory with 128 or more layers to China, requiring permission for their sale.


Ki-Yong Kim kky@donga.com