Chip industry globalisation under threat, says chief of China’s YMTC
GEOPOLITICS and some countries’ national security concerns are threatening the globalisation of the world’s chip industry and its future growth, said Chen Nanxiang, chairman and acting chief executive officer of memory chipmaker Yangtze Memory Technologies (YMTC) on Thursday (Jun 29).
In a speech at the opening ceremony of the Semicon China conference in Shanghai, Chen said that these factors made him doubt whether the global semiconductor industry could realise an earlier forecast of US$1 trillion in sales by 2030.
“There is a lot of government intervention, and a lot of political content is added in the middle,” he said. He added that he fully agreed with comments made by the founder of Taiwan’s TSMC, Morris Chang, about how globalisation in the chip sector was “dead”.
Chen did not name any countries in his speech.
“Our industry itself is cyclical, and each practitioner has his own way of dealing with the cycle. However, the high degree of uncertainty we face is precisely due to the destruction of globalisation,” he said, adding that he personally felt that the global industry was entering a “period of turmoil”.
Modern chipmaking involves more than a thousand steps, and requires complex intellectual property, tools and chemicals from around the world.
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China is one of the largest chip markets, and the country has been trying to build up its domestic manufacturing capability. But in recent years it has come under pressure from the US, which is keen to undercut these efforts.
YMTC is among the key Chinese firms caught in the crossfire, after Washington enacted export control curbs against it and over a dozen other players in the Chinese artificial intelligence chip sector on a trade blacklist last year.
This came about over fears that it could divert American technology to previously blacklisted Chinese tech giants Huawei Technologies and Hikvision. The move barred YMTC’s suppliers from shipping US goods to it without a difficult-to-obtain licence.
Chen hinted at YMTC’s own troubles during his speech, with a direct appeal to equipment suppliers in attendance.
“For YMTC that I manage, we can no longer procure parts and components for equipment we had legally bought. If it is fair, please set up some fair rules to buy back the equipment,” he said.
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