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China to increase semiconductor purchases in us?

Time:2019-02-25

China plans to increase its semiconductor purchases in the United States to $200 billion (225.9 trillion won) in the next six years, about five times the current level, according to businesskorea.

However, many experts say the us, eager to curb China's semiconductor ambitions, is unlikely to accept China's proposal because it would increase its reliance on semiconductors.

South Korean companies are wary of the plan for two main reasons.

First, China did not say what kind of semiconductor it would buy. "China has not said what kind of semiconductor chips it will import, whether memory, central processing unit (CPU) or system semiconductor chips," said a senior official at a south Korean semiconductor company. In this case, it is difficult to predict the impact on Korean companies.

Another senior official said, "even memory chips are hard for the us. Micron plans to triple or triple its supply to China in six years. A memory production line alone would take more than two years and cost 20 trillion to 30 trillion won ($17.71 billion to $26.56 billion). It has been pointed out that because of the oligopoly in the memory industry, it is almost impossible to increase production in a short time.

In this context, if the reported plan is true, China could increase imports of qualcomm or system-level chips. "Samsung electronics makes NAND flash memory chips in xi 'an, China, and SK hynix makes DRAM chips in wuxi," an industry insider said. Even if China increases its imports of memory semiconductors from the United States, the companies are unlikely to take a hit.

It is worth noting that the us side has responded negatively to China's proposal. The Wall Street journal quoted John Neuffer, President and CEO of the semiconductor industry association of America (SIA), as saying the proposal is aimed at "made in China 2025."

"The United States has banned the export of semiconductor equipment to fujian jinhua integrated circuit co., LTD. (JHICC), a DRAM manufacturer, and punished huawei technologies and ZTE Corporation in the name of national security," said an industry observer. The us is unlikely to take China's offer lightly.

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