At present, due to the consideration of intensified competition between China and the United States, all countries and regions want to hold semiconductors, which can be regarded as an important factor related to the technological hegemony competition of various countries (regions) and ensure economic security, in their own hands.
At the same time, in order to achieve economic recovery from COVID-19, the importance of digitalization is increasing, and considering that the demand for semiconductors will continue to expand significantly in the medium to long term, it can be said that the competition for obtaining a growth market has officially begun.
China & Japan Exchanged Opinions on Japan Semiconductor Export Control
Wang Shouwen, China International Trade Representative and Vice Minister of Commerce, met with the Japanese Ambassador to China Hideo Tarumi, in Beijing on the 12th. The two sides exchanged views on Sino-Japanese economic and trade relations and topics of respective concern.
Wang Shouwen emphasized that China is highly concerned about Japan's plan to impose export controls on 23 types of semiconductor manufacturing equipment, and urges Japan to respect market rules, listen to the voice of enterprises, abide by WTO rules, and jointly maintain the stability of the global semiconductor industry chain supply chain and promote healthy bilateral economic and trade cooperation. Hideo Tarumi said that Japan and China have close economic and trade relations and great potential for cooperation.
The Japanese embassy in China is willing to strengthen exchanges with the Ministry of Commerce of China to create a suitable environment for Japanese companies to cooperate economically and trade with China. The Japanese side is willing to maintain dialogue and communication with the Chinese side on relevant issues to promote the further development of the economic and trade relations between the two countries.
Japan Overweight Semiconductor Investment
In order to return to the world's top semiconductor camp, the Japanese government has continued to invest. On April 10, Japan's industry ministry finalized a plan to give state-backed chipmaker Rapidus an additional 300 billion yen ($2.27 billion) in funding to build a semiconductor factory on the northern island of Hokkaido. Previously, Rapidus had received initial funding of 70 billion yen from the Japanese government.
Japan has sharply boosted spending on chips in a bid to boost its position in the global semiconductor market. Recently, according to the data of the International Semiconductor Industry Association (SEMI), Japan is expected to invest 7 billion US dollars in fab equipment next year, an increase of 82% from this year, and the growth rate ranks first in the world.
However, while the semiconductor investment became overheated, It is worth noting that the current global chip industry is in a crisis of surplus. According to the Semiconductor Industry Association (SIA), global semiconductor sales in February were approximately US$39.7 billion, down 20.7% year-on-year and 4% month-on-month.
By region, sales in the Americas fell 14.8% year-on-year and 5.3% month-on-month; European sales fell 0.9% year-on-year and 0.3% month-on-month; sales in Japan increased 1.2% year-on-year and fell 0.3% month-on-month; Asia-Pacific sales fell 22.1% year-on-year, down 3.6% month-on-month.
Judging from the data in the fourth quarter of last year, Samsung Electronics' profit in the fourth quarter of 2022 fell by 69% year-on-year to 4.3 trillion won. This is the first time in nearly eight years that Samsung Electronics' single-quarter profit fell below 5 trillion won. Profit fell 91.2% year-on-year to 65.5 billion won, falling below 100 billion won for the first time since the fourth quarter of 2018.
Japan's semiconductor industry was also hit. According to data from the Semiconductor Manufacturing Equipment Association of Japan (SEAJ), in February this year, sales of semiconductor manufacturing equipment in Japan recorded a month-on-month decline for five consecutive months. According to the report of the association, sales of semiconductor equipment made in Japan will drop by 5% from the previous fiscal year in 2023 to 3.4998 trillion yen, which is lower than the previous year for the first time in four years.
China’s Semiconductor Stock Market Exploded This Friday
After several days of speculation, as of the close, China's semiconductor stock market exploded this Friday. PowerTECH, Piotech, and NEXTOOL had a daily limit of 20%, KINGSEMI rose slightly by more than 18%, and many stocks such as JHT Design Co., Ltd, PNC, China Wafer Level CSP Co., Ltd., and NAURA Technology also reached the daily limit.
The current international environment is not very favorable to China's semiconductor industry, including geo-trade frictions and the US government's blocking measures against Chinese IC suppliers. Under such circumstances, China's continuous increase in investment in local semiconductor companies is also a relatively sober and long-term measure.
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