Japan And South Korea Continues To Intensify The Impact Of The Global Semiconductor Industry Chain Geometry?

The global epidemic is still spreading. According to the report in February 26th, the total number of confirmed infections in South Korea reached 1261, and the number of new Japanese crown pneumonia cases was 862.

The fierce outbreak of Japan and South Korea in a narrow strip of water also affects the pulse of the global semiconductor industry, because two countries are in the key position of semiconductors. Among them, Korea is located in the semiconductor technology subduction zone, and has huge investment in the fields of memory and panel. Japan is the core technology node in the industrial chain, and semiconductor materials and machinery and equipment are second to none.

In these areas, we pay more attention to memory and upstream materials. And the panel industry, China has larger capacity, there are alternatives, production equipment has higher market share of European manufacturers can choose.

At present, Japan and South Korea's semiconductor giant Samsung, SK Hynix and so on have not stopped work, are in operation. In the short term, the impact is not obvious, but once the epidemic continues to deteriorate, the shortage of key supplies will bring huge losses to the global industrial chain.

According to the reporter, Samsung confirmed that the employees were in the mobile phone factory, and the test line, the staff were not many, had little impact on the whole. Samsung Electronics said the company's chip and panel factories in South Korea were unaffected.

Recently, a new employee of SK Hynix factory in Lichuan, Korea, had close contact with confirmed cases in Daegu. SK Hynix said that the staff's nucleic acid test results were "negative", and for safety reasons, they were quarantined until March 1st. The 800 personnel contacted by the staff were unconditionally isolated. SK Hynix has more than 18 thousand employees in the Lichuan plant. The operation of the plant will not be affected by this.

A number of semiconductor industry insiders told the twenty-first Century economic news reporter that the intervention of the Japanese and Japanese governments is not so big now that the factories are operating normally and need to keep dynamic tracking.

Memory prices rose slightly

A mobile phone practitioner once told reporters that storage has exceeded the screen and CPU, becoming the biggest cost of mobile phone, and the cost of storing it in mobile phone reaches 25%-35%, which shows its importance. Samsung and SK Hynix occupy a monopoly position in the field of memory.

According to the survey of DRAMeXchange, NAND ranked the first place in the fourth quarter of 2019, and the market share reached 35.5%. SK Hynix ranked sixth and the market share was 9.6%. In the fourth quarter of 2019, the global DRAM factory ranked the first in its own brand memory revenues, Samsung ranked first, the market share was 43.5%, SK Hynix was second, and the market share was 29.2%.

On the whole, in the field of NAND, Samsung plus SK Hynix, Korea accounted for 45.1% of the manufacturers, nearly half of the country; in the DRAM field, Samsung and SK accounted for 72.7%.

Among them, Samsung has factories in addition to South Korea, and has also built factories in Xi'an, China. There are hidden worries about the impact of the epidemic due to the expansion of its production schedule. However, it is still planned according to the original plan. SK Hynix has factories in Wuxi, China, and is affected by the Sino US trade war and epidemic situation. In addition, NAND big factory armor Xia and Western data, in Iwate, Japan and Mie have factories, also affected by the epidemic.

Wu Yating, an analyst at Ji Bang consulting, responded to the twenty-first Century economic report, saying that due to the highly automated memory factory, the production has not been affected by the epidemic. As for the demand side, affected by the epidemic, notebook computers and smart phones have been shipped down for repair. However, whether DRAM or NAND Flash, they are now turning to tight supply market, but the purchase intention of the purchasing side is still very strong.

It should be pointed out that the production of the semiconductor industry is basically continuous throughout the year, and its manufacturing process is special. Once it stops, it will cause significant losses, so the factory will not stop production or reduce production capacity easily. From the end of last year, the supply and demand of memory are changing, and the superposition of the epidemic will lead to further shortages, and the price of storage will rise.

Chi Bang consultancy pointed out that, from the global supply side, the characteristics of the storage industry is that unless the global systemic risk is encountered, the manufacturers will not rush to cut production, and the client inventory is still insufficient. Even if the downstream customers are short of jobs and shortages, they will still maintain certain purchasing power. Therefore, Chi Bang consultancy estimates that the price of DRAM and NAND Flash will maintain a slight rise in the first quarter.

On the other hand, the industry is also concerned about the replacement of domestic memory enterprises. The most representative ones are Changjiang storage, Hefei Changxin and Jinhua storage. At present, the Yangtze River storage announced that the company has started mass production of 3D NAND flash memory, which is China's first 64 tier 3D NAND flash memory. According to Changxin's official website, the newly listed Changxin notebook and desktop memory are all 8GB and the rate is DDR4-2666. The company also plans to build two other fabs.

The two companies have made breakthroughs in the field of NAND and DRAM, but the domestic storage industry is still in the catch-up stage, and the gap between the two companies is quite large.

Many materials and products can not be replaced.

At present, there is no outbreak in Japan for factories, but Japan's position in the upper reaches of the semiconductor industry is detached. If the outbreak has led to the interruption of raw materials, it will undoubtedly be a heavy blow to the global and Chinese semiconductor industry.

Semiconductor manufacturing processes are mainly divided into three parts: design, manufacture and sealing. In the latter two steps, key equipment and materials are needed. They are also the upstream cornerstones for ensuring the smooth production of chips.

And Japan's hard core capability is on the upstream raw materials and hardware equipment, many technical threshold is very high, especially in terms of materials, many Japanese enterprises products can not be replaced.

According to the global semiconductor output data released in 2018 by IC Insights, semiconductor materials account for about 11% of the total output value and about 12% of equipment. The two add up to 23%, accounting for about 1/4 of the semiconductor industry.

Although the overall volume of materials and equipment is not large, high barriers make few players, and the difference between high play and ordinary players is very large. Japan is a high player. In the field of raw materials, Japanese enterprises occupy half of the world's semiconductor materials market.

For example, in the field of silicon with the highest cost in materials (more than 30%), Japan's Xinyue chemical has the first market share, followed by Japan's SUMCO (MITSUBISHI Sumitomo), China Taiwan global wafer, Germany Siltronic, and SK Hynix of Korea. Southwest Securities report shows that in 2018, the global market share of the top four silicon suppliers reached 94%, of which 28% of Japan's Xinyue chemistry accounted for 25% and that of Japanese MITSUBISHI Sumitomo accounted for 25%.

In the field of photoresist, Japan JSR, Tokyo chemical industry, Sumitomo chemical, Dow, Fuji electronics and other enterprises monopolized. In the field of target, Japan's mining metals, Honeywell, Dong Cao and plex occupy most of the market.

In addition, Japan's well-known semiconductor materials suppliers include Sumitomo chemical, Showa electrician, DAIKIN industry, Stella Chemifa, Morita chemical industry, Japan relief printing Co., Ltd.

In terms of equipment suppliers, Tokyo electronics, one of the five largest equipment giants in the world, is a Japanese company. In terms of technology, the Japanese Nikon and Canon can produce, though the production and market share is not as good as that of Holland's ASML.

In addition to the most powerful materials and equipment, Japanese chip suppliers have also made contributions in the field of segmentation. For example, Renesas electronics is the world's top three automotive semiconductor manufacturers, this year with 6 billion 700 million U.S. dollars to complete the acquisition of chip IDT. Although SONY is faced with problems such as architecture integration and factory closures, only CMOS sensor chip is in the field of image capture.

In these areas, no matter China or other countries, there are few complete industrial chains to replace them. Guotai Junan Securities's report also pointed out that the electronics industry, OEM manufacturing and sealing materials in the field of materials, Japanese companies occupy an absolute advantage. Japanese companies have been deeply cultivated for many years in the field of material research and development, and have reached the stage of technological perfection. Japanese enterprises occupy more than 50% of the important fine molecular domains, such as silicon wafer materials, light shield and target materials. China has not yet been able to achieve major breakthroughs in this field.

Compared with China, the semiconductor industry chain of Korea and Japan focuses on the upper and middle reaches, and the intelligence intensity is higher. But we still can not ignore the risks brought by the outbreak. If further aggravated, the industrial chain will be impacted.

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