Categories
Supply Chain

Korea Japan trade relations

Chipmaker material suppliers in Korea have been earning
more from domestic semiconductor companies who have been looking for local suppliers.

Domestic supply

Since export restrictions were put in place by their
neighbours, Korean chipmakers like Samsung Electronics have been using local suppliers. This has led to suppliers in Korea more than doubling their earnings in the last four years.

Japan’s restrictions affected areas including photoresist
chemicals and hydrogen fluoride used in chip manufacture. Fluorinated polyamide for organic light-emitting displays was also affected.

The restrictions were first changed back in mid-2019, and
since then 16 Korean materials companies saw combined sales grow by approximately $15 billion between 2018 and 2022.

The affect

Korea Semiconductor Industry Association VP and COO, Ahn Ki-hyun, said Korean companies weren’t damaged by the restrictions. He said, however, the restrictions may have impacted Japanese companies attempting to export to South Korea.

One of the toughest materials to re-source was hydrogen
fluoride gas, used for etching in display production. Much of this has been replaced since 2018 to lower-purity gas produced in Korea.

Despite some of the restrictions now being lifted, the
domestic suppliers that have been adopted may stay for good.

Recent relations

Just last month the two countries came together and agreed
to lift many of the restrictions. Korea has continued to promote using domestic suppliers even if restrictions are eased.

In general the chip industry has not changed much, other
supplies and exports between the countries have stayed the same. In light of the changes it will be interesting to see how the Asian chip market now develops.

The US Chips Act will also affect these new business
relationships. Market shares might change, and only time will tell how the industry will shift as a whole.

Global presence

 

Cyclops Electronics supplies to countries and partners all
over the world. We pride ourselves on our accessibility and level of customer service. If you’re struggling to find electronic components or reliable distributors, contact Cyclops today and see first-hand how a good business
partnership can benefit you. Email us at sales@cyclops-electronics.com, or call us on +44 (0) 1904 415 415. 

Categories
Electronic Components

Price of semiconductor equipment increasing

The price of chip manufacturing is increasing. From skyrocketing raw material prices to continual high demand for semiconductors, it/ is an expensive business right now. Semiconductor manufacturing prices are also on the rise.

Global manufacturers are announcing price hikes to combat the expected rise in inflation, passing the cost onto the customer.

Is reshoring reassuring?

Aside from the supply chain issues and raw material shortages, the drive for reshoring will drive up the cost and demand of semiconductor manufacturing equipment.

In both the US and the UK, new legislation is in the works to provide funding for the electronics industry. It comes alongside a push to reduce reliance on semiconductors sourced from Asia, especially powerhouses like Taiwan and China.

The Chips Acts

In the west’s new legislation, funding and incentives are offered to domestic and international companies looking to build fabs. One such company was TSMC itself, which was rumoured last year to be opening a branch in Germany.

While these grants and investments will go some way to covering the cost of new semiconductor manufacturing equipment, it will only be part of the massive price manufacturers pay.

A new challenger

This may not be the only international development affecting the price increases of semiconductor equipment. New competitors are throwing their proverbial hat in the semiconductor manufacturing ring. One of the countries that is beginning to manufacture more is India.

As the US and Europe are already heavy-hitters in the industry, India will have to make hefty investments into manufacturing. Bulk-buying machinery and technology for facilities will mean more demand, and distributors putting on a bigger price tag. Taiwanese manufacturer Foxconn announced it would be setting up a fab in the country.

Other costs

The cost of making the semiconductor manufacturing equipment also comes into play. As companies are persuaded to move west, the cost of their manufacturing will increase. Many companies based in the east have access to cheaper labour but European and US labour costs will be higher.

Outside of Asia, in areas that are reshoring, there will also be the struggle of finding highly qualified employees. Since there was no need for skilled individuals when there were no fabs, there is a gap in the industry. It will take some time to catch up with industry standards of education.

Kit up

As the chip shortages continue, there’s no guarantee when the cost increase of semiconductor manufacturing equipment might slow down. As with all things, we’ll have to wait and see.