The current state of semiconductor chip manufacturing technology in different countries worldwide

In today’s world, semiconductor chips are ubiquitous, found in every smart device such as phones, computers, servers, and military applications. This highlights the significance of semiconductor chip manufacturing technology to the global economy. At present, countries worldwide are heavily investing in and developing this industry. In this article, let’s delve into the emerging global semiconductor chip manufacturing landscape, exploring both the market trends and the potential future of this promising industry with the support of RX Tradex.

1. A global overview of the semiconductor chip market.

What is the emerging global semiconductor chip manufacturing market? According to technology research firm Gartner, global chip revenue is estimated to have increased by 1.1% to $601.7 billion in 2022. This is a significant decrease from the 26.3% growth in 2021, where the revenue reached $500 billion. [1] This signals that the semiconductor chip manufacturing industry is starting to feel the impact of complex developments stemming from the global economic crisis in recent years. Specifically, consumer spending limitations and reduced demand for high-tech products like personal computers and smartphones have contributed to this trend. Additionally, supply chain disruptions have somewhat affected chip prices, limiting production capacity and consumer buying.

However, Gartner also indicates that the revenue for non-memory chips increased by 5.3%, while analog and discrete chips recorded growth rates of 19% and 15%, respectively. This indicates that the semiconductor chip market remains vibrant, focusing mainly on the automotive and industrial sectors. This trend stems from the rise of electric vehicles, industrial automation, and energy transition.

According to Richard Gordon, Vice President of Gartner’s technology research, short-term semiconductor revenue is projected to decline due to the rapid global economic downturn and reduced consumer demand. This will directly negatively impact the non-memory chip market in 2023. Global semiconductor revenue is expected to decrease by 3.6% this year. Simultaneously, consumers’ preference for spending on areas such as travel, leisure, and entertainment has significantly affected technology product sales. On the other hand, markets catering to businesses in sectors like industrial transportation, healthcare, and commerce are showing stability due to strategic infrastructure investments by corporations to enhance their competitive advantage.

2. The global emerging semiconductor chip manufacturing technology in the fierce race today.

2.1. The current state of semiconductor chip manufacturing technology in the Asia Region.

Hiện nay, châu Á đang được xem là khu vực thống trị ngành sản xuất chip toàn cầu. Trong đó, TSMC và Samsung Electronics kiểm soát hơn 70% thị trường sản xuất chất bán dẫn tính tới năm 2021. [3] Cụ thể, thực trạng của các quốc gia hàng đầu trong lĩnh vực công nghệ sản xuất chip châu Á là:

Asia is currently regarded as the leading continent in the global semiconductor chip manufacturing industry. As of 2021, TSMC and Samsung Electronics together hold more than 70% of the market for semiconductor production. [3] The following summarizes the situation of the Asian nations that are at the forefront of semiconductor chip manufacturing industry:

2.1.1. Taiwan

At present, Taiwan is regarded as the number one powerhouse in semiconductor chips with the presence of Taiwan Semiconductor Manufacturing (TSMC), the world’s most important semiconductor company with a significant impact on the global economy. TSMC’s advanced technology has reached a point where the company currently produces around 92% of the world’s most sophisticated chip output. With a market capitalization of around $550 billion, TSMC ranks as the 11th most valuable company globally. [10]

However, despite the presence of such giants in the industry, this country still faces numerous difficulties in chip production. Specifically, other superpowers, notably the United States and China, are actively competing with TSMC due to the company’s immense influence on the global economy. Additionally, the electronics industry is being impacted by global recession, leading to reduced spending by consumers, which has resulted in challenges for Taiwan in terms of semiconductor production volume, especially in products such as air conditioners, televisions, personal computers, and phones. Nevertheless, in the overall outlook, Taiwan is expected to remain one of the leading powerhouses in global semiconductor chip manufacturing technology.

2.1.2. China

According to The Wall Street Journal, in China, top corporations such as Huawei and Alibaba are delving into cutting-edge AI development techniques by amalgamating various chip types to reduce dependence on a singular hardware element. [4]

Furthermore, China has injected over 1 trillion CNY (140 billion USD) into the semiconductor industry, fostering growth opportunities for local manufacturers and state-sponsored research initiatives. Looking ahead, the nation might seek to exert influence over the market by incorporating legacy semiconductor chip manufacturing technologies alongside their prowess in producing 28nm and 14nm chips. In tandem, as the automotive industry races forward, China is vigorously investing in vehicular chips, with the potential to yield billions in revenue in the long run.

2.1.3. Korea

As indicated by the Semiconductor Equipment and Materials International (SEMI) report, South Korea could increase investment in equipment and semiconductor chip manufacturing technology by an additional 41.5%, reaching 21 billion USD by 2024. [6] With this investment surge, Korea rises to the second spot in chip manufacturing expenditure, surpassing another Asian tech giant, China, which currently holds third place. Additionally, to propel the domestic chip manufacturing sector, the Korean government is extending various forms of support, including tax reductions, lowered interest rates, relaxed regulations, policies, and infrastructure enhancements. These forms of support are anticipated to bolster the competitive edge of Korean chip manufacturers on the international stage. [7]

Moreover, propelled by the determination to lead the global chip race, Korea has been actively channeling investments into semiconductor chip manufacturing technology, augmenting capabilities and workforce quality. Notably, the country has collaborated with numerous regions, including Vietnam, to establish manufacturing, supply, and assembly facilities for high-tech electronic chip products.

2.1.4. Japan

Formerly a leading powerhouse in microfabrication semiconductor chip manufacturing technology, Japan is currently waning in the face of rapid global developments. According to the Ministry of Economy, Trade, and Industry (METI) of Japan, the fading of the chip manufacturing industry in Japan can be attributed to multiple factors, including the US-Japan trade disputes concerning memory chips, the absence of a horizontal integration manufacturing model, delayed digitization, and a lack of self-sufficiency. [8]

METI also highlights that domestic chip fabrication facilities are outdated and incapable of producing advanced chips, contributing to the current predicament. In response, the Japanese government is funneling billions of USD into the domestic chip industry, providing substantial subsidies for joint ventures with companies from Taiwan. The hope is that these efforts will catalyze positive growth in the semiconductor manufacturing industry in the future.

2.1.5. India

At present, India ranks as the world’s fifth-largest economy, standing out for remarkable advancements in science and technology over the past years. Given this position, it’s unsurprising that the nation aims to become a chip powerhouse in the future. According to the Vietnam Chamber of Commerce and Industry (VCCI), alongside countries like the US, India is working on establishing strategic alliances in semiconductor component manufacturing. This endeavor seeks to bring advanced semiconductor chip manufacturing technologies to the country, considering India lacks competitive semiconductor component manufacturers on the global market. [8]

Additionally, India currently imports 100% of its semiconductor chip manufacturing technology and equipment, with an annual import value equivalent to around 24 billion USD. To attain semiconductor manufacturing autonomy, the country has implemented policies to financially support the setup of front-end chip manufacturing centers. Concurrently, the Indian government is proactively promoting the establishment of assembly and testing facilities (back-end) to foster a comprehensive domestic semiconductor industry.

2.2. The emerging state of semiconductor chip manufacturing technology in the United States.

In a bid to regain prominence in the global semiconductor manufacturing race, on August 9, 2022, the United States enacted the CHIPS and Science Act, with a substantial budget of 280 billion USD, including provisions to incentivize domestic chip fabrication facilities. [11] Notably, leading American manufacturers such as Intel, Micron Technology, and Texas Instruments are being supported to expand production capacities. Furthermore, over 40 projects with nearly 200 billion USD committed investments have been announced by the U.S. government for the establishment of new manufacturing facilities.

Additionally, the ongoing chip shortage is disrupting operations in various critical industries within the United States, including automotive, consumer electronics, medical devices, and advanced weaponry. Consequently, the U.S. is concentrating on investments and policy improvements to bolster this pivotal industry. Concurrently, efforts are being directed towards training and retaining skilled talent to prevent brain drain within the semiconductor sector, especially retaining high-ranking executives, professors, and leaders of top companies. It is anticipated that the semiconductor battle between the United States and China will remain tense in the future; however, with the colossal investments from these two superpowers, the chip manufacturing industry is poised for even greater achievements.

2.3. The emerging state of semiconductor chip manufacturing technology in the European area.

For several years, Europe has been trailing in semiconductor chip manufacturing technology, particularly in fields such as automotive, smartphones, and personal computers. To catch up with technological powerhouses like China and the U.S., Europe has taken robust strides to foster the development of the semiconductor manufacturing sector. Notably, on April 18th, 2023, the European Union achieved consensus on a semiconductor industry development plan aimed at reducing reliance on Asia in this strategic domain. [12] With an investment of 43 billion euros, Europe sets a target to capture 20% of the global market share by 2030, doubling the current figure.

Furthermore, Europe possesses an advantage in the production of intricate materials and sophisticated chemicals, highly customizable and integral to advanced chip manufacturing. Additionally, the region hosts one of the world’s foremost research centers, IMEC, focused on nano-technology located on the outskirts of Brussels, where chip manufacturers utilize its facilities for prototyping. Consequently, Europe has a solid foundation to establish itself as a major supplier of high-end processors in the world’s future.

3. Summary.

From this article, it is evident that the current state of semiconductor chip manufacturing technology in different countries worldwide is marked by significant fluctuations resulting from substantial investments and competitive pressures among global superpowers. With the long-term plans of these developing nations, the world can anticipate more robust advancements in chip manufacturing technology in the future. Furthermore, to support businesses in exploring advanced methods and technologies in manufacturing, RX Tradex is organizing the top 4 leading international exhibitions in the region: Vietnam Manufacturing Expo, METALEX Vietnam, NEPCON Vietnam in this year, and Waste and Recycling Vietnam in the upcoming time.

Note:

[1]: Doanh thu ngành bán dẫn toàn cầu chỉ tăng 1,1% trong năm 2022.

[2]: Toàn cảnh dự báo về doanh thu chất bán dẫn toàn cầu năm 2023.

[3]: Châu Á đã thống trị ngành sản xuất chip như thế nào?

[4], [5]: Đừng đánh giá thấp khả năng tự sản xuất chip của Trung Quốc.

[6]: Hàn Quốc sẽ vượt Trung Quốc về đầu tư thiết bị sản xuất chip.

[7]: Tham vọng dẫn đầu thế giới về sản xuất chip của Hàn Quốc.

[8]: Ấn Độ có kế hoạch trở thành cường quốc chip trong bối cảnh cuộc chiến công nghệ Mỹ-Trung.

[9]: Ấn Độ “trải thảm đỏ” 10 tỷ USD thu hút các nhà sản xuất chip toàn cầu.

[10]: Thế bá chủ của nhà sản xuất chip Đài Loan đe dọa nền kinh tế toàn cầu.

[11]: Chính sách trợ cấp chất bán dẫn của Mỹ.

[12]: Liên Hiệp Châu Âu đạt đồng thuận về sản xuất chip bán dẫn.

[13]: Vũ khí bí mật của châu Âu trong cuộc đua bán dẫn toàn cầu.