A US semiconductor customer appears to be refusing to supply products from China. Even if it was designed by a Korean semiconductor fabless, it is demanding ‘certificate of origin’ that it was not manufactured by a Chinese foundry. It is interpreted as a move to minimize the damage caused by the US government sanctions. As a ‘post-China foundry’, it is expected to affect the semiconductor production supply chain.
Company A, a domestic power semiconductor company, recently received a request from a US customer (manufacturing parts) to prove that it did not produce semiconductors in China with a ‘certificate of origin’. Supply conditions have become stricter, such as having to attach the semiconductor country of origin indication to the contract. Domestic fabless company B, which supplies semiconductors to the US market, withdrew its mass production plan for Chinese foundry Zhongxin Guoji (SMIC). This is because of concerns about US export restrictions.
A semiconductor industry official said, “From July to August, the demand for proof of origin of semiconductors to exclude Chinese-made products has been spreading in the fabless industry. It seems to be done,” he said. Some of them are known to prove the country of origin by changing the Taiwanese foundry production site to ‘Taiwan’ (Taiwan) instead of ‘Republic of China’. If ‘China’ is indicated, supply to the US may be blocked, and it is interpreted as a result of reflecting the request of an actual US customer.
The demand for proof of origin to avoid Chinese products has been around since the US-China trade conflict intensified. However, the scope of application was limited, such as demonstrating only certain parts. Recently, it is unusual to prove the country of origin even to the semiconductor at the bottom of the finished product.
The move to reject ‘Made in China’ semiconductors is expected to have a ripple effect on the domestic fabless and foundry industries. This is because many domestic fabless use domestic foundries such as Samsung Electronics, DB Hitech, and Key Foundry. Even if they mass-produce products overseas, most of them use Taiwanese foundries such as TSMC and UMC. “The foundry supply chain used to respond to American customers is highly likely to be reorganized,” said Seogyu Lee, chairman of the Korea Fabless Industry Association.
Fabless companies that have turned their eyes to China are highly likely to return to Korea and Taiwan due to domestic foundry bottlenecks and price hikes. In fact, when looking at SMIC’s sales by region in the second quarter of China, the proportion of Asia, Europe, and North America including Korea continues to decrease. It is analyzed that the U.S.’s move to exclude Chinese products as well as restrictions on exports of materials, parts, and equipment (minor general manager) has had an impact. On the other hand, SMIC’s share of China and Hong Kong continued to increase.
[SMIC 지역별 파운드리 매출 비중 변화]
By Kwon Dong-jun, staff reporter [email protected]