Bracing for a new turning point

Home > Opinion > Editorials

print dictionary print

Bracing for a new turning point

Samsung Electronics has achieved its best first-half revenue of 129 trillion won ($112 billion), largely owing to semiconductors. Of 12.57 trillion won in operating income for the second quarter, nearly 7 trillion came from chip operation. Given such amazing performance, Samsung remains a gigantic chip flag carrier. It has been the primary force behind Korea’s memory supremacy over the last three decades.

But the legend faces another serious challenge. The third chip war has been triggered by the tech hegemony contest between the United States and China. During the first war, the U.S. chip hegemony was lost to Japan. Japan stole the upper hand in chips backed by its world-best materials, parts and equipment industry in the 1970s-1980s. But the tide changed after America introduced import quotas on Japanese companies.

The loss was a gain for Korea. When Japan struggled against U.S. import barriers, Samsung Electronics developed the first 64-mega DRAM. Since the turning point on Sept. 25, 1992, the chip industry turned in favor of Korea. Japan tried in vain to catch up with the speedy and unrelented expansion by Samsung Electronics. The company has stayed at the top ever since. Korea has been leading in both technology and market share.

The rise of U.S. and Taiwanese contenders in the third chip war cannot ensure Samsung’s lead regardless of its revenue streak. The gallop by TSMC is most threatening. The pure-play foundry with unrivalled expertise in production of consignment chips has been flying in the age of the fourth industrial revolution. The Taiwanese company is building six factories in the United States alone. Intel is also building up production lines.

Intel is the pioneer of chips. But due to its focus on CPU, the company has been relatively passive in memory chip production. Now it plans to directly produce chips because high-performance memory chips have become indispensable in the age of automation and digitalization. The U.S. government has pledged $50 billion investment in reinforcing America’s chip infrastructure. The United States plans to muster all of its capabilities to outpace Samsung Electronics in technology. If America is serious, it could easily humble Korea as it did with Japan in the 1990s. It could take less than five years. The government, the producers and people must unite to protect the country’s chip industry.
Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
s
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)