Once Samsung and SK Hynix, which account for 61% of the global market share, cut production, they will raise the price of smartphones in everyone’s hands.
This week, in order to counter Japan’s trade control measures against South Korea, South Korea has also moved Japan out of the trade concession whitelist. In addition, South Korea also announced that it will invest 7.8 trillion won (about 6.5 billion US dollars or 44.9 billion yuan) in research and development of domestic semiconductor materials in the next seven years, reducing dependence on Japan.
The semiconductor industry tracking company TrendForce said that Samsung and SK Hynix, two Korean chip makers, generally hold about 2.5 months of hydrogen fluoride inventory. It is now one month since Japan announced its export controls on South Korea on July 1. South Korean media estimated that the inventory of the two companies may only be enough to support 1.5 months.
In the global NAND flash memory market, Samsung and SK Hynix are the No. 1 and No. 5 companies in terms of market share. Hydrogen fluoride is a necessary material for making NAND flash memory, while Japan accounts for 90% of the world’s hydrogen fluoride production. Samsung and SK Hynix are very dependent on imported hydrogen fluoride from Japan.
But I can’t get it now. On July 1, the Japanese government announced that it will impose strict semiconductor export restrictions on South Korea, and control the three chemicals used in the manufacture of mobile phone screens, fluoropolyimides for OLED panels, photoresists for semiconductor manufacturing, and high-purity hydrogen fluoride. Purchase contract for raw materials.
For these three important raw materials, Japan has an absolute advantage in the international market. Japan accounts for about 90% of the world’s fluorinated polyimide and hydrogen fluoride, and 70% of the photoresist. Moreover, such raw materials are difficult to store in large quantities, hydrogen fluoride is corrosive and highly toxic, and photoresists have a short shelf life, and the quality quickly deteriorates. So Samsung and SK Hynix don’t have much inventory.
In August, the relationship between the two countries has not improved. On August 2, the Japanese cabinet meeting decided to remove South Korea from the white list of trade preferences, and control the export of up to 857 materials, which was officially implemented on August 28.
Samsung and Hynix must find alternatives as soon as possible, which is no easy task. South Korea’s Korea Times quoted an executive in the semiconductor industry as saying that it would take at least two to six months for semiconductor companies to find alternatives to Japanese products because of the need to source materials from other countries and complete a series of tests.
Nearly shutting down hydrogen fluoride is just the beginning of this war. The production of semiconductor chips requires 19 or so materials, most of which have extremely high technical barriers. Japanese companies in silicon wafers, synthetic semiconductor wafers, reticle, photoresist, target materials, protective coatings, lead frames, ceramic plates, plastic plates, TAB (tape-type automatic bonding), COF (film composite ), welding wire, packaging materials and other 14 important materials accounted for more than 50% of the share.
According to the estimates of the Korea Economic Research Institute, Japanese control measures will cause HanThe country’s GDP will decrease by 2.2%, while Japan will reduce by 0.04%. If South Korea also implements countermeasures, it will increase Korea’s GDP growth to 3.1%, compared with 1.8% in Japan.
The Korea SME Committee conducted a survey of 269 Korean SMEs affected by the control, and found that 59% said it was difficult to support for six months, and only 20% of companies reported that they could survive for one year.
Of course, it is not only Korea that is affected. US media CNBC analysis believes that once Samsung and SK Hynix, which account for 61% of the global market share, will cut production, it will push up the price of flash memory chips around the world, and then spread to all smartphone companies, and finally push up the smartphones in everyone’s hands. price.