US CHIPS Act Inspires New Investment Internationally
1. ASML’s Suppliers Explore Southeast Asian Expansion
A dozen suppliers plan to visit Singapore, Malaysia and Vietnam soon. NTS Group, Bestronics, AAE BV, BKB Precision, HQ Group, KMWE Group, Sempro, Sioux Technologies and VDL ETG are all expected to visit. Singapore is a candidate for some companies regional headquarters, while nearly all are considering Vietnam and Malaysia for manufacturing. As restrictions for China mount, factories need to be planned elsewhere.
2. Silicon Valley Bank collapse minimally impacts Semiconductor Designers and Electronics Manufacturers
The majority of effected corporate customers in software, pharmaceuticals and finance. The US government promises to make US Customers whole, this will take time however. Italian Technoprobe SPA may experience permanent loss, but only 2.5% of it’s cash reserves were held with SVB.
Technoprobe SPA, Italian Semi Design
Cohu Inc, US Semiconductor Products
Roku, Streaming device and TV manufacturer
VIR Biotechnology – US Pharma?
Sunrun – US Solar Panel
https://www.reuters.com/business/finance/global-firms-with-exposure-collapsed-svb-2023-03-13/
3. $230B in Domestic Samsung Chip Plants Planned
Samsung will develop 5 new foundry service plants in Yongin over the next 20 years in anticipation of increased demand. This firm is a leader in memory chip manufacturing, a more volatile semiconductor commodity that is highly dependent on consumer demand. Memory has been massively oversupplied this year. Samsung hopes these new semiconductor plants will increase stability in their business. In the USA, Samsung has pledged $17B to a new 2024 chip foundry in Texas, where they already operate one. This announcement comes off the back of the announcement of a government program valued at over $417B.
4. Xi and Guangzhou Automobile Group GM, Feng Xingya place focus on domestic automobile chip production.
Less than 5% of automotive chips in Chinese cars are produced in China. There is plenty of political support to support the expansion of semiconductor technology and rumors of a $146B, 5-year chip package to escalate competition with the US CHIPS Act. Recent lockdowns have impacted SMIC less than other manufacturers, indicating representatives are taking special care with the nascent, domestic semiconductor industry. As China becomes more economically isolated, leaders place more emphasis on technological self sufficiency.
https://asia.nikkei.com/Spotlight/Caixin/The-remaking-of-China-s-Science-and-Technology-Ministry
5. Battery Technology Patents at Risk in US / China Decoupling.
There were 125 US / Chinese joint patent applications filed from 2019-2022. China is a leader in battery manufacturing. Analysts speculate that China could leverage it’s onerous law treating joint filings as Chinese Technology, and strong position in the battery material and manufacturing space, against the United States in retaliation to the US’ own export restrictions. Chinese businesses do have a history of suing major American technology businesses like Apple over patent infringement.
6. South Korean President Yoon Suk-Yeol and Japanese Prime Minister Kishida Fumio pledge to improve military and trade relationship
Hi-tech Japanese semiconductor materials exports will no longer be restricted to South Korea. Neither office had visited each other’s country in 12 years. Forced wartime labor remains a significant issue in the mind of much of the Korean public.
https://www.reuters.com/world/asia-pacific/whats-table-kishida-yoon-summit-2023-03-15/
7. Mitsubishi Electric to Double Investment in Silicon Carbide Power Semiconductors
Energy efficient silicon carbide chip production will quintuple once a new $744M factory is put online. Mitsubishi is now targeting roughly $1.9B worth of investment through fiscal year 2025, up from $967M. An old LCD factory will be refurbished and expanded to produced 200nm wafers, while output and an existing 150nm facility nearby will be increased. Swiss manufacturer STMicroelectronics is currently the top producer of silicon carbide power devices.