Chinese semiconductor industry
- Thread starter Hendrik_2000
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It is more likely that SK Hynix would sell its factory if it were forced to do so.
This is gigantic fab account for 50% of SK Hynix total production.
SK Hynix would collapse if they lost this fab.
From the article:
"What is more meaningful, though, will be the alignment of China’s private sector behind China’s chip companies: TSMC didn’t only need ASML, it also needed Apple and AMD and Nvidia, end users who were both willing to pay for performance and also work deeply with TSMC to figure out generation after generation of faster chips. Tencent and Alibaba and Baidu will now join Huawei in being the China chip industry’s most demanding customers, in the best possible sense."
Yup.
I agree here. China should expand capacity with trustable and secure tools. But there is more IMO.
In Brazil when herders had to drive a herd of cattle across a river they knew to be infested with piranha they’d commonly sacrifice an animal by putting it in the water first. While piranhas attack the unfortunate beast, the others could cross safely upstream.
Here the unfortunate caw is the typical AI hardware company, like Biren and friends. While US hawks are gloating seeing they succeed stopping them, the 28nm and above big herd quietly crosses the river. Mature nodes are the pillars of China gigantic industrial /automotive complex and in this moment in time are more critical for China than advanced nodes. As long as SMEE machines are not in volume production, China needs foreign lithography machines, at any node. Current expansions plans at 28nm and above are huge and highly strategical, and should be fully executed at any cost.
Now US thinks that blocking US origin tools is enough. Same mistake they made with Huawei in 2018, it took them one year to realize they needed to block also TSMC to really cramp Huawei. Now they have still not blocked ASML, Canon, Nikon but if they see current measures are not enough they will double down for sure. So China just needs time. In 2/3 years time, things will be different.
SMEE is definitely some years late to the party. In hindsight China should have doubled or tripled down on SMEE already 5 years ago. They just gave them money and let them and their key suppliers to grow, but in a war this is not enough.
I honestly don't understand why SK Hynix came out with that now!
Selling the fab to China, eventually to YMTC, would be a total disaster for US, so US would never allow it. Moving the equipment out of China and closing a thousand people's fab is out of discussion too. China would never allow it. So why this open threat after you just received a one year waiver? It is very dangerous to threat and openly confront in this way the big guys. Maybe this SK official is just very pissed, but when you are in that position you should control better your words.
This is a chance to remove another competitor.
If there is no repercussion.
Bro maybe the demand isn't there anymore? and who will follow next Samsung? From a lower base YMTC will have a great future as the American just gifted them a huge present on a silver platter.
SK Hynix is feeling the brunt from waning demand, worsening US-China chip war.Source: Reuters
SK Hynix is feeling the brunt from waning demand, worsening US-China chip war
By | 26 October, 2022- SK Hynix Inc will be cutting its capital expenditure for next year by at least half.
- Should the situation get harder to handle, the Korean chipmaker might be forced to close its DRAM production plant in Wuxi, near Shanghai.
- The company just reported a 60% decline in third-quarter profit as memory chip demand plunged.
SK Hynix operating profit fell to 1.66 trillion won (US$1.16 billion) in the July-September quarter, from 4.2 trillion won a year earlier, missing analyst estimates of a 2.5 trillion won profit. Revenue fell 7% year-on-year to 10.98 trillion won, missing the estimated 12.2 trillion won. Making it worse, prices of DRAM and NAND storage slumped at least 20% on a quarterly basis, SK Hynix said.
Now, the company plans to cut production gradually, starting with less profitable products, and it still expects memory supply will exceed demand for the near term. The South Korean giant also said it will cut its capital expenditure for next year by at least half. At this point, it is apparent that demand is faltering across the board as chip companies are recording lackluster results. , rival to SKY Hynix, saw its third-quarter earnings slump.
Fellow memory makers also recently slashed their output plans in an effort to stabilize the market. The former even warnined of a sharp decline in PCs and smartphones sales in the coming months.
Worse case scenario for SK Hynix
As part of its countermeasures to prevent China from obtaining advanced chip technologies, the US Department of Commerce announced a new export control measure that prohibits US-based companies from exporting their semiconductor equipment to chip production companies in China.Fortunately, Samsung Electronics and SK Hynix from the US for their chip-making factories in China to import semiconductor equipment without applying for permission from Washington. However, experts are suggesting that both companies would have to come up with contingency plans after the one-year waiver expires as it would then disrupt the production plans of Samsung and SK hynix, which generate enormous amounts of profits by selling their memory chips in China. Samsung operates its Chinese plant in Xi’an while SK Hynix produces chips in Wuxi.
For SK Hynix particularly, its contingency plans for the long term would include drastic measures like closing its DRAM production plant in Wuxi, near Shanghai, because it won’t be able to import the equipment it needs to sustain and expand production. In a conference call to discuss their third-quarter earnings, SK Hynix chief marketing officer Kevin Noh shared that the company is even considering selling its memory chip production facilities in China if operating in the country gets too complicated.
Market demand increased, NTU's third-quarter net profit increased by 73.62% year-on-year
Jiwei.com news, on October 26, Nanda Optoelectronics announced the report for the third quarter of 2022. The company achieved operating income of 412 million yuan, a year-on-year increase of 54.88%; net profit attributable to shareholders of the listed company was 66.7913 million yuan, a year-on-year increase of 73.62%; The net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses was 54.2713 million yuan, a year-on-year increase of 90.74%; the basic earnings per share was 0.1233 yuan.
It is reported that the company achieved operating income of 1.259 billion yuan in the first three quarters, a year-on-year increase of 77.64%; realized a net profit of 211 million yuan attributable to shareholders of the listed company, a year-on-year increase of 70.33%; The net profit was 170 million yuan, a year-on-year increase of 80.56%. Basic earnings per share are 0.3899 yuan per share.
Regarding the growth of performance, NTU Optoelectronics pointed out that it was mainly due to the increase in market demand and production capacity during the reporting period, and the increase in sales revenue of electronic special gas and MO source products.
During the reporting period, the company actively improved product quality and opened up markets. While improving the business stickiness of existing customers, it developed new market applications in the third-generation semiconductor, IC and photovoltaic fields through research and development of new products and technological innovations to meet customer product requirements. The iterative demand has made the sales performance of MO source and hydrogen electronic special gas products grow steadily.
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