Semiconductor Chip Wars: China Speeds Up, Global Race Intensifies

China is rapidly strengthening its semiconductor capabilities in many key technology areas, according to a recent report from the Korea Institute of Science and Technology Evaluation and Planning (KISTEP).

Notably, research from KISTEP shows that China has surpassed South Korea in core competencies in most areas of semiconductor technology, including memory chips, where Korean companies were previously considered unrivaled.

Semiconductor industry landscapeThe world is undergoing major changes.

The KISTEP report sheds light on a dramatic shift in the global semiconductor landscape. According to the study, China has now surpassed South Korea in the memory chip technology sector, where South Korean conglomerates such as Samsung Electronics and SK Hynix have dominated for decades.

China currently ranks second globally in memory technology, behind only the United States. This is a big step up from KISTEP's 2022 report, when South Korea remained second behind the United States, while China ranked third in memory technology and fourth in advanced packaging technology.

"Even in the memory market, where South Korea once held an almost unshakeable position, Chinese semiconductor companies are still rapidly increasing their market share," the latest report stressed.

In addition, China is also expanding production of older generation chips at a rapid pace, gradually narrowing the technology gap with the world's leading manufacturers.

Measuring China's Semiconductor Dominance:Index of technology level and production capacity

A comprehensive assessment conducted last year showed that China is narrowing the gap with leading semiconductor powers, even surpassing them in some areas.

In high-density resistive memory technology, an area that Korea has long dominated, China achieved 94.1 percent (compared to the maximum benchmark of 100 percent), surpassing Korea's 90.9 percent. This is a remarkable result, as resistive memory remains the most important pillar of the Korean semiconductor industry.

The report also highlighted China's rapid progress in many semiconductor fields. In high-performance, energy-saving AI semiconductor technology, China achieved 88.3%, surpassing South Korea's 84.1%.

China achieved 79.8% in power semiconductors, far exceeding South Korea's 67.5%, and in next-generation high-performance sensor technology, China achieved 83.9% compared to South Korea's 81.3%.

Both countries are only at parity in advanced packaging technology, with the same 74.2% share of basic capabilities. However, Taiwan leads in the commercialization of packaging technology, while the US dominates all other technology areas, both in terms of core capabilities and commercialization prospects.

The KISTEP report also analyzed the technology life cycle of the semiconductor industry, pointing out that South Korea still holds an advantage in mass production processes, while China leads in design capabilities and core technologies.

Notably, design and core competencies are South Korea's weakest points in the semiconductor value chain, ranking lowest among the countries assessed.

Chinese memory makers have made significant strides in closing the technology gap with the world's leading companies. ChangXin Memory Technologies (CXMT), one of China's leading dynamic random access memory (DRAM) makers, has developed commercial chips using 16-nanometer process technology.

Although still lagging behind Samsung, SK Hynix (South Korea) and Micron Technology (USA), which have used 12nm and 14nm technology in the production of the latest generation of RAM (DDR5), this progress shows that China is gradually catching up with global competitors.

Notably, China's robust expansion of the semiconductor industry comes despite US export restrictions designed to limit China's access to advanced chip technology.

To address these challenges, Beijing has rolled out a national strategy aimed at achieving full self-sufficiency in the semiconductor industry. One of the most important moves was the creation of the largest chip investment fund ever last year, aimed at boosting domestic research, development and production.

Not only has China not been held back by sanctions, it has accelerated investment and innovation, laying the foundation for a new era of competition in the global semiconductor industry.

Challenges and opportunities in the chip raceglobal semiconductor

The report highlighted deep concerns about the impact of geopolitical tensions on the South Korean semiconductor industry, especially the risk of declining exports or even being pushed out of the Chinese market due to US controls.

In addition, the industry faces many other challenges, from the displacement of key talent, the increasingly fierce race in the AI ​​semiconductor field, to Korea's domestic market-first policies and rapid fluctuations in the global supply chain.

The findings paint an alarming picture for South Korea, a country that has built its economy on its leadership in the semiconductor industry. If it wants to maintain its competitive edge, it must quickly address weaknesses in core technology and chip design.

Meanwhile, Taiwan remains the leader in commercializing advanced packaging technology, while the US continues to dominate the global semiconductor industry thanks to its superior advantages in both fundamental capabilities and commercial applications.

However, China's strong rise, despite sanctions and restrictions from the West, has demonstrated the effectiveness of the national strategy to achieve technological self-reliance.

The rapid development of China's semiconductor industry, especially in the memory sector, which was previously a weak point, is profoundly changing the global market landscape.

With significant advances in core technologies, China is gradually breaking down barriers imposed by export controls, moving closer to its goal of becoming a self-sufficient semiconductor powerhouse.

Phan Van Hoa