Computer

This is China’s plan to dominate global chip manufacturing

Made the law, made the trap, but if you also put intelligence to the matter you can get a more than interesting benefit and even bend your rival. China is not going to be able to compete in the race for nanometers unless a catastrophe changes everything, but the plot twist is not surprising as such, but it is very ingenious.

China’s Plan and World Chip Domination

Neither ASML, nor KLA, nor Applied Materials can sell state-of-the-art scanners to China due to the aforementioned prohibitions, so if you as a country are not going to work to manufacture the best and most innovative, how will you dominate the world of semiconductors and chips? ?

Plan-China-Scanners

Well, by subjugating the industry attached to them, that is, if you cannot manufacture the highest level processor but you can control the manufacturing of all the chips attached to the motherboards, memories and SSDs, then you indirectly generate a much larger volume than your rival and make them depend on you to make their product work.

Simple and tremendously effective. To achieve this, two things are needed, high-volume FABs and, above all, scanners. The problem? No company can currently manufacture more, they are at 100% capacity and wait times are through the roof. The solution is even more ingenious and on the other hand more logical after knowing it.

4% in worldwide revenue, but 20% from manufacturing

When a large company like Intel or TSMC no longer wants to manufacture wafers at certain nanometers such as 90nm, what do they do with the scanners? Well, there are two ways out, they sell or rent them through third-party companies.

And here comes China in this matter, since these scanners can be obtained within a month and even less, when the new ones are already for the year. Logically, when you buy something in large volume and empty the stock quickly as China has done, what happens is that the price begins to rise and this begins to be a problem, because Korea and Taiwan have seen their rival’s move and have undertaken the same path.

Wafers-2024

Thus, purchases of scanners and equipment attached to them have gone to the 29 billion for China in 2021, an increase of 58% compared to what was seen in 2020. Korea has also moved fast and now has a spending of almost 25 billion (+55%), while Taiwan has backtracked and is copying this strategy by raising a Four. Five% until the 24.9 billion.

The rest of the world, with the US and the EU as the main affected countries, have very low levels (7.61% Y 3.25%) which means that they are not interested in this market and want to focus on innovation and design as such. The problem is that in the end Asia will dominate the 200mm wafer industry for chips like PMICs, which will grow by 2024 a twenty-one% to reach a record number of 6.9 million of units per month. We will see if again delegating the manufacture of key components like these to Asian countries and especially China is a smart move on the part of the West, or if it will take its toll on us instead.

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