Cooperation with ASML in Netherlands becomes important for AI chip war

With South Korean President Yoon Suk Yeol’s visit, the Netherlands, which is playing a vital role in the semiconductor supply chain, is garnering renewed attention. In particular, ASML, a semiconductor equipment manufacturer to be visited by President Yoon, Chairman of Samsung Electronics Lee Jae-yong, and Chairman of SK Group Chey Tae-won, is practically the sole manufacturer of photolithography systems, which are essential for the production of high-tech semiconductors. As the high-performing chip market grows rapidly with the expansion of artificial intelligence, some say that the success of the semiconductor partnership between South Korea, the U.S., and Japan depends on cooperation with the Netherlands.

According to the semiconductor industry on Monday, ASML is one of the world's four major semiconductor equipment companies, along with Applied Materials and Lam Research in the U.S. and Tokyo Electron Limited in Japan. According to the data collected by Statista, a market research company, Applied Materials has a market share of 20 percent, followed by ASML, with 18 percent, in the global semiconductor equipment market.

The number of EUV equipment units ASML can produce is 50 per year, leading to fierce competition among semiconductor manufacturers to secure equipment. So far, TSMC in Taiwan, which is the world’s No. 1 foundry company, has the most number of equipment. It was reported that Samsung Electronics has about half of EUV units compared to TSMC. This is why ASML has considerable power over its clients.

South Korean companies are making efforts to build stronger relationships with the Netherlands. Samsung Electronics chairman Lee visited ASML in the Netherlands in October 2020 and June 2022. While part of the share was sold this year, Samsung Electronics still has 0.4 percent of ASML’s shares. SK hynix signed a five-year, 4.7-trillion-won supply contract for EUV equipment with ASML in 2021 and continues cooperating.

Securing EUV equipment is one of the most urgent agendas of South Korean semiconductor companies as AI servers, AI phones, and AI computer markets led by generative AI are quickly growing. Demands for AI chips, such as GPUs for high-spec processors for AI and cutting-edge memory DRAM, are expected to grow significantly.


beepark@donga.com