South Korea and Taiwan's Chip Power Rattles the US and China

choi

Sam Kim, South Korea and Taiwan's Chip Power Rattles the US and China. Bloomberg BusinessWeek, Mar 3, 2021.
https://www.bloomberg.com/news/a ... d-worries-u-s-china

Quote:

(a) "the $400 billion semiconductor industry [worldwide], where a shortage of certain kinds of [automobile] chips * * * The technological prowess and massive investment required to produce the newest 5-nanometer chips (that’s 15,000 times slimmer than a human hair) * * *

(n) " 'South Korea and Taiwan are now primary providers of chips like OPEC countries once were of oil,' says Ahn Ki-hyun, a senior official at the Korea Semiconductor Industry Association. 'They don't collaborate like OPEC. But they do have such powers.'  It's true the chip industry has no equivalent to the mighty oil cartel. Yet like a Saudi Arabia or a Russia [which do not collaborate on crude oil, either], Taiwan Semiconductor Manufacturing Company (TSMC) and South Korea's Samsung Electronics Co can move markets with a turn of the spigot. Samsung's decision at the start of 2019 to reduce capital spending on memory chips in a bid to bolster profits caused prices in the segment to rise after years of declines. * * *

(c) "A report published last September by Boston Consulting Group (BCG) and the Semiconductor Industry Association (SIA), estimated that in 2020 the U.S. accounted for just 12% of semiconductor manufacturing capacity, while Taiwan and South Korea together made up 43%.

(d) "Samsung's newest fab, in Pyeongtaek, south of Seoul, has a price tag of around $15 billion.

(e) "Its [China's] share of global manufacturing capacity now stands at 15%, three percentage points above the US, according to the BCG report

(f) "So for now, Washington and Beijing are in a similar bind: heavily reliant on the flow of chips from Taiwan and South Korea, which are allied with the US strategically but also entwined with China economically. Says Lee Kyung-mook [李允默], a professor of business management at Seoul National University: 'They may now have more power than OPEC did going forward, because at least oil producers were spread all over the world.

Note:
(a)
(i) Quotation (c) ("A report"/ supplying a link to the report) and (e) ("the BCG report"/ notice the definite article) refer to

Antonio Varas, Raj Varadarajan, Jimmy Goodrich and Falan Yinug, Government Incentives and US Competitiveness in Semiconductor Manufacturing. BCG and SIA, September 2020.
https://web-assets.bcg.com/27/cf ... turing-sep-2020.pdf
(A) The same report also appears at SIA (semiconductor Industry Association) website.
Kevin Curran, Is Taiwan a Ticking Time Bomb in the Semiconductor Supply Chain?  TheDiplomat.com, Feb 27, 2021
https://thediplomat.com/2021/02/ ... uctor-supply-chain/
(B) I went through this report, which did not mention change in market shares such as these.   
(ii) However, view the graphic immediately after quotation (c).
(A) Kevin Curran, Is Taiwan a Ticking Time Bomb in the Semiconductor Supply Chain?  TheDiplomat.com, Feb 27, 2021
https://thediplomat.com/2021/02/ ... uctor-supply-chain/
("according to the Semiconductor Industry Association, the US share of global semiconductor manufacturing has steadily declined from 37 percent in 1990 to just 12 percent in February 2021")
(B) The graphic has a heading: "Share of Global Semiconductor Manufacturing Capacity" (among Taiwan, South Korea, Japan, China, US, Europe and "Other"/ "Data: Boston Consulting Group, Semiconductor Industry Association")

SIA website sells its research reports. So I can not find out where data underlying the graphic comes from.
(C) But it is easy to surmise that the graphic includes both logic and memory chips, if not IC design, packaging or testing (the three categories Taiwan also excels). And it is indeed the case, which show Taiwan's "semiconductor" "share" -- I am quoting the heading of the graphic -- shrank a bit since 2014 (when it peaked in Taiwan).

Overview on Taiwan Semiconductor Industry (2020 Edition). Taiwan Semiconductor Industry Association (TSIA), July 3, 2020.
file:///C:/Users/WPL/Downloads/2020%20Overview%20Edited%20v01.pdf
(paragraphs 1 & 2: "This Overview on Taiwan Semiconductor Industry is a translated excerpt from an ITIS (Industrial Technology Information Services) publication, which provides an overview of Taiwan semiconductor industry in 2019. * * * ITIS is a market research project, which is supported primarily by the Taiwan government. For semiconductor portion of the project, research was conducted in Industrial Economics & Knowledge Center [(IEK); 產業經濟與趨勢研究中心 (產經中心)] of Industrial Technology Research Institute [(ITRI); 財團法人 工業技術硏究院 (工研院)] (IEK/ITRI)" )

At page 4 is "Table 1 Revenue of Taiwan IC Industry, 2019" whose rightmost column displays revenue changes between 2019 and 2018 in billions of New Taiwanese dollars: memory decreased by "20.4%."

(b) Pyeongtaek  平澤市
https://en.wikipedia.org/wiki/Pyeongtaek  
(a city in Gyeonggi Province 京畿道; was elevated to city status in 1986 and is home to a South Korean naval base and a large concentration of United States troops)
(i) Google Maps shows it is about 35-mile air distance south of Seoul.
(ii) Compare English spelling: Pyongyang  平壤直轄市.

choi

2020 State of the US Semiconductor Industry. SIA, June 2020.
https://www.semiconductors.org/w ... Industry-Report.pdf

Note:
(a) Only view illustrations, which is quite informative.
(b) Page 7 illustration (heading: "2019 GLOBAL SALES MARKET SHARE") has China 5%, just behind Taiwan's 6%. Korea's 19% is the second to US 47%.
(c) Page 8 has two illustrations.
The first is a bar chart (heading: "U.S. SEMICONDUCTOR INDUSTRY MARKET SHARE (by Subproduct)"), where you can see that China sold chips to US (in 2019), too, in logic, analog and "discrete" -- but not in memory (chips).
The second is a table (heading: "US SEMICONDUCTOR INDUSTRY MARKET SHARE (by Business Model)") where US had (in 2019) "10% Global Pure-Play Foundry Market." How come? It alludes to
• Samsung's logic fab in Austin, Texas, and
•  GlobalFoundry's fabs, neither of which is owned by Americans.

Austin, Texas has, Besides Samsung's, two other, much smaller semiconductor manufacturing facilities: NXP and Infineon (the two are not pure-play foundries for logic chips). During the deep freeze a couple of weeks ago, Austin Energy orderd its industrial customers to shut off electricity. To date, the three still are unable to re-start semiconductor manufacturing, before they complete the cleaning of the mess.
(d) Page 11 has two bar charts, both SHARES the same bar: US "semiconductor 16.4%."
(e) Bottom half of page 13 is a map of US continent (heading: "SEMICONDUCTOR MANUFACTURING ACROSS AMERICA").
(f) Page 14 text has the heading: "Semiconductor manufacturing capacity in the United States has been stable," with a graphic to show.
(g) Page 15 has
text: "US exports of semiconductors totaled $46 billion in 2019, fifth-highest among US exports behind only airplanes [$25B], refined oil [$94B], crude oil [$65B], and automobiles [$48B].
a pie chart (heading: "PERCENT OF US-HEADQUARTERED FIRM SEMICONDUCTOR WAFER CAPACITY BY LOCATION") includes China (5.6%) and "All others" (5.0%).

With respect to Intel's Dalian facility, Wall Street Journal reported on Oct 20, 2020 that Intel Sold its NAND Flash Business To SK Hynix.

"All others" includes Intel's Malaysian operations.