Semiconductor Week in Review (Nov 24 - 30) :
Chinese chipmakers challenge Korean memory dominance while TSMC and Samsung tighten restrictions on Chinese clients' access to 7nm technology. As Commerce Secretary Raimondo races to finalize CHIPS Act funding, Korean giants commit US$44 billion to AI memory production. Qualcomm and MediaTek pursue divergent paths beyond mobile markets, targeting edge computing and cloud services respectively.
Chinese chipmakers challenge Korean dominance with aggressive pricing
China's semiconductor industry is experiencing unprecedented growth, with SMIC leading the charge by crossing US$2 billion in quarterly revenue while Chinese memory makers aggressively compete on pricing. The transformation from a negligible presence a decade ago to a formidable force is evident as companies like SMIC, YMTC, and CXMT make significant technological strides, backed by government support and a massive domestic market.
While still trailing global leaders, SMIC has notably achieved 7nm process capability, reminiscent of TSMC's 2018-2019 technology, through strategic talent acquisition despite US export controls. In the memory sector, CXMT and YMTC are rapidly closing the technology gap with Korean giants Samsung and SK Hynix, with Morgan Stanley projecting CXMT's DRAM market share to exceed 10% in 2024.
The industry's ambitions extend to cutting-edge technologies, with Chinese firms actively developing high-bandwidth memory for AI applications, suggesting a comprehensive push to challenge the established semiconductor hierarchy dominated by Taiwan, South Korea, and the United States.
Chip restrictions tighten noose on China's AI ambitions
In a strategic move to curtail China's artificial intelligence advancement, TSMC and Samsung have initiated a stringent verification process for their Chinese clients seeking 7nm chip manufacturing capabilities. The new restrictions, implemented on November 11, specifically target high-performance AI chips by limiting specifications such as chip sizes over 300mm², HBM implementation, or transistor counts exceeding 30 billion.
While "whitelisted" Chinese clients maintain their existing partnerships, the policy particularly impacts emerging AI chip manufacturers, forcing them to downgrade specifications or seek alternative solutions. The measures reflect an escalating US strategy to maintain control over advanced semiconductor technology, with industry experts anticipating potential further restrictions after January 2025, especially in areas like packaging, equipment, and design.
China chip sector faces fresh hurdles as TSMC pulls AI tech
In a significant blow to China's semiconductor ambitions, TSMC has suspended advanced AI chip production at 7nm and below for Chinese customers, while domestic players scramble to adapt amid escalating US-China tensions. The move, coinciding with TSMC-made chips being found in Huawei devices and potential tougher sanctions under an incoming Trump administration, has sparked both concern and determination within China's chip sector.
At IC China 2024 in Beijing, industry leaders including Shenzhen Basic Semiconductor and Moore Threads outlined strategies to navigate the challenges, from localizing supply chains to exploring alternative manufacturing techniques. Despite China remaining the world's largest chip consumer and Beijing's latest economic stimulus measures offering some relief, the country's struggle to access cutting-edge technology underscores a widening technological gap with the West, particularly in the crucial AI sector.
Qualcomm and MediaTek chart divergent paths in non-mobile expansion
As chipmakers increasingly look beyond smartphones, Qualcomm and MediaTek are pursuing distinct strategies in their diversification efforts. Qualcomm CEO Cristiano Amon projects a $900 billion edge computing market by 2030, targeting US$8 billion in non-mobile revenue by 2029, with a significant focus on the automotive and IoT sectors.
While both companies are expanding beyond mobile, their approaches differ markedly: Qualcomm emphasizes branded platforms in automotive, PC, and spatial computing, while MediaTek focuses on cloud ASICs and networking services, maintaining a stronger emphasis on mobile.
Industry experts note that despite MediaTek's successful mobile market disruption, Qualcomm maintains a significant lead in emerging sectors like automotive and edge computing, with its Copilot+ PC initiative showcasing its technological advantage. The strategic divergence highlights the evolving competitive landscape in the semiconductor industry as companies seek new growth avenues beyond traditional mobile markets.
Foundries' self-policing hints at deeper China tech restrictions ahead
In an unprecedented move that signals potentially tighter restrictions on China's semiconductor access, major foundries like TSMC and GlobalFoundries have begun self-regulating their Chinese customers' access to 14nm chip technology even without formal US government mandates.
This proactive industry response, coupled with incoming Secretary of State Marco Rubio's criticism of previous enforcement gaps and the CHIPS Act's classification of 14nm as an "advanced process," suggests the incoming Trump administration may use this voluntary compliance as a blueprint for more stringent controls.
The developments are particularly significant for China's semiconductor ambitions, as domestic manufacturers like SMIC already struggle with limited advanced manufacturing capacity and fierce competition, leaving Chinese chip designers increasingly vulnerable to future restrictions on international foundry access.
Commerce chief races to lock in chip deals before Trump transition
US Secretary of Commerce Gina Raimondo is mounting a last-minute push to cement billions in semiconductor subsidies before a potential Trump administration takes office, directing staff to work overtime and personally intervening with tech executives to accelerate deals under the $50 billion CHIPS Act.
While TSMC and GlobalFoundries have already secured binding agreements, the Commerce Department is scrambling to finalize terms with industry heavyweights like Intel, Samsung, and a host of other manufacturers in the coming months. The stakes are particularly high for Intel, which has been offered $19.5 billion in combined funding and loans but faces delays in meeting program milestones, despite its strategic importance to US semiconductor independence.
With the transition of power looming as a hard deadline, Raimondo aims to lock in these transformative investments before Howard Lutnick, Trump's pick for Commerce Secretary, takes the helm, though she expresses confidence the program will survive under new leadership.
Korean chipmakers bet big on AI memory amid Chinese competition
In a strategic pivot that reflects the evolving semiconductor landscape, South Korean memory giants SK Hynix and Samsung Electronics are channeling their 2025 investments toward upgrading existing facilities and expanding high-bandwidth memory capabilities, rather than adding new production lines. The companies are collectively earmarking approximately US$44 billion for advanced manufacturing processes and HBM expansion, betting heavily on artificial intelligence-driven demand while navigating the challenge of emerging Chinese competition.
While the Korean manufacturers' "natural attrition" strategy of transitioning to more complex processes could help maintain market balance, the rapid expansion of China's CXMT – projected to become the world's third-largest DRAM supplier by 2026 – threatens to disrupt their carefully calculated approach.
Meanwhile, surging AI-related demand has prompted analysts to revise 2025 HBM projections upward from 15 to 25 exabytes, suggesting the bet on advanced memory could pay off despite the competitive pressures.
