Among the top 10 in the world, Korea is 0… A warning to get rid of the illusion of a semiconductor powerhouse Kang Kyung-ju IT Cafe

Nvidia CEO Jensen Huang [사진=로이터 연합뉴스]

It is being pointed out that the Korean semiconductor industry is facing an all-round crisis. Breaking away from the myth of success in memory semiconductors, the opinion that intensive investment and national support are urgently needed in fields with high growth potential such as fabless (semiconductor design company) and foundry (semiconductor consignment production) is gaining strength.

Managing a Korean company in the world’s top 10 fabless

According to TrendForce, a global market research institute on the 2nd, sales of the top 10 fabless companies in the world totaled US$127.4 billion (regarding 155 trillion won) last year, up 48% from the previous year, recording the highest growth rate among the entire semiconductor market. As chip prices surged due to a shortage of semiconductors last year, sales of fabless designing them have increased significantly.

The United States and Taiwan, which lead fabless, benefited greatly, but Korea, which is mainly focused on memory semiconductors, did not receive good news in this field. 1st place in terms of sales Qualcomm(146.99 -3.81%)Semiconductor design sales of last year were $29,333 million (regarding 35.6 trillion won), a 51% increase from the previous year. Smartphone system-on-chip (SoC) sales increased by 51% and Internet of Things (IoT) chip sales increased by 63%, driving the earnings.

2nd in sales nvidia(267.12 -2.10%)(US$24.885 billion and 30.26 trillion won), the total sales jumped 61% from the previous year, as sales in the gaming graphics card and data center divisions increased 64% and 59%, respectively. 3rd place Broadcom(626.98 -0.43%)(USD 21.26 billion, KRW 25.6 trillion) Sales also increased by 18% and ranked sixth Novatec(39,100 +0.13%)($4.836 billion, 5.9 trillion won) Sales increased by 79%, recording the highest rate of increase among the top 10 companies.

The progress of Taiwanese companies was also outstanding. MediaTek, in fourth place, earned $17.619 billion (21.4 trillion won), an increase of 61%, and was ranked in the top 10. Novatec(79%), Realtek (43%) and Himax (74%) also showed record increases.

MediaTek Headquarters

Of the 17 semiconductor companies with global sales of more than $10 billion last year, 4 of them all grew by more than 50% compared to the previous year.Qualcomm·nvidia·Mediatech·AMD). Among the top 10 fabless companies Qualcomm·nvidia·BroadcomSix companies, including AMD, Marvell, and Xilinx, are American companies, and MediaTek,Novatec· Realtek and Himax are four Taiwanese companies.

TrendForce said, “High-performance computing and network communication, high-speed transmission, servers, automobiles, and industrial Apple(174.31 -0.17%)As the demand for high-spec products such as applications increased, good business opportunities were created for fabless companies, and overall profits increased.”

The sales growth rate of 48% for fabless is significantly higher than that of other semiconductor markets. According to market research firm Omdia, the overall semiconductor market recorded a 21.1% year-on-year increase in sales last year, but only half compared to fabless.

On the other hand, domestic companies’ fabless competitiveness is at a disastrous level. According to Omdia, the proportion of Korean companies in the global fabless market is 1.5%, far less than that of the US (56.8%) and Taiwan (20.7%), and the gap with China (16.7%) is wide. Samsung(69,100 -0.72%), SK hynix(116,000 -1.69%) Although it is leading the global memory semiconductor market through Expensive but promising AppleThe design of high-performance semiconductor chips such as application processors (APs) Qualcomm It is a situation where American companies are monopolizing.

Korea is focusing only on semiconductor production… Need to build a comprehensive ecosystem

Most of Korean fabless companies are small and medium-sized enterprises (SMEs), and their growth is currently stagnant. Cooperation with foundry companies is essential for fabless companies, but as fabless orders are pouring into top 10 foundry companies amid the global semiconductor boom, small Korean fabless companies have no place to stand.

Jaeyong Lee, Vice Chairman of Samsung Electronics [사진=뉴스1]

It is pointed out that such a structure will become an obstacle to fostering the Korean semiconductor industry in the long term. Usually, a fabless company designs semiconductors, entrusts production to foundries, and then supplies them to customers such as information technology (IT) and automobile companies. It is evaluated that competition in Korea, which is heavily weighted only on the Korean market, has become relatively unfavorable.

While the Taiwanese semiconductor industry is strengthening its internal linkage from design to foundry to post-processing, the United States is also Intel(48.11 -2.93%)As the foundry service begins, synergy with American companies strong in design is expected. In the market, American companies that are holding the global fabless market Intel If you drive it to the foundry, the yield (percentage of good products) is lower than that of TSMC in Taiwan. Samsung The foundry is expected to face a major crisis.

especially recently SamsungSigns of a crisis are already appearing as TSMC loses its supplies to TSMC every day. nvidiaFollowing the failure to win the order for the core chip (H100 GPU) for data center from TSMC, reports are continuing that the consumer graphics card (GPU) chip also suffered from TSMC. In particular, older models of GPUs SamsungThe weight of the sense of crisis is different in that it has been consigned production.

China, which dreams of becoming a semiconductor, started building an independent semiconductor ecosystem led by the government. Companies such as Hi-Silicon (Fabless), SMIC (Foundry), and YMTC (Nand Flash) are the main pillars, and recently, they are tightening the reins in raising semiconductor equipment companies. In 2014, China created a national semiconductor industry investment fund worth 24 trillion won, and added an additional 36 trillion won to the fund in 2019. China has decided to waive 25% corporate tax for semiconductor companies with advanced technology for 10 years and to waive tariffs on imported equipment.

“It should be nurtured with will at the government level.”

What is the domestic situation? 23rd of last month SamsungYong-in Park, general president of the System LSI Division, which is in charge of design and development of system semiconductors in Samsung While communicating with the employees of the semiconductor division (DS), he mentioned the importance of fabless.

In September 2019, Samsung Electronics held the ‘Samsung Foundry Forum (SFF) 2019 Japan’ to introduce new technologies and roadmaps for the foundry (semiconductor consignment production) business at the Shinagawa Intercity Hall in Tokyo. figure. 2019.9.4 [사진=연합뉴스]

President Park said, “The System LSI Division is the only company that has various solutions that require hyper-connection and super-intelligence through the intelligence of objects and machines, such as APs, modems, and image sensors. We will make it,” he emphasized. After memory semiconductor, ‘No. 1 in system semiconductor’ SamsungIt is read that the goal of the

He also expressed that the most important thing in fabless is people. He said, “The System LSI business is the same as drawing a picture on a blank piece of paper. If a member of the department has an idea and has the ability to implement it, they can achieve results in any area, so the System LSI business unit is investing in people.”

In January, the AI ​​semiconductor ‘Sapion’ roadmap was unveiled and cast a vote for fabless. SK hynixis considering a merger and acquisition (M&A) of ARM. ARM, the UK’s largest fabless Samsung·Apple·Qualcomm It has AP design technology for information and communication technology (ICT) devices sold by others. Currently, regarding 95% of mobile devices worldwide use ARM technology.

Park Jeong-ho SK hynix At the 74th regular general shareholders’ meeting on the 30th of last month, Vice Chairman said, “We are discussing ways to invest in the ARM acquisition by forming a consortium with other companies.” At the SK Square shareholders’ meeting on the 28th of last month, he said, “Semiconductor companies are reviewing M&A plans from large to small companies, and ARM is also being considered (for acquisition).” Even from now on, we will continue to discuss in Silicon Valley,” he said, expressing his will to foster fabless.

Vice Chairman Park Jeong-ho is explaining the company’s vision to shareholders at the 1st regular general shareholders’ meeting of SK Square held at the Supex Hall of SK Square’s headquarters on the 28th. 2022.3.28 [사진=SK스퀘어 제공]

An industry official said, “As a company capable of designing a 3-nano semiconductor, which is a state-of-the-art process, Samsung, Qualcomm, Apple, nvidia.

He said, “The state must step aside from the illusion that Korea is a semiconductor powerhouse.” “The US, Europe, Taiwan, China, and Japan are all nurturing semiconductor fields such as fabless, foundries, and equipment and materials with the state at the center.”

By Kang Kyung-joo, reporter at Hankyung.com [email protected]