"US and Europe Discuss Strategies to Prevent China from Dominating Legacy Semiconductor Processes"

Bloomberg Reports Citing US Government Sources
Focus on Potential Additional Regulations for Processes Above 28nm

As China focuses on legacy semiconductor processes of 28 nanometers (nm; 1 nanometer is one billionth of a meter) and above in response to the U.S.'s advanced semiconductor regulations, and moves to dominate the market, the United States and Europe are reportedly discussing strategies to block this.

Bloomberg News reported on the 31st of last month (local time), citing multiple sources, that the U.S. and European Union (EU) governments are discussing this issue. One source said that concerns have grown that China could dominate semiconductor products made with mature processes, leading the U.S. and Europe to determine that additional restrictions on China are necessary.

[Image source=Reuters Yonhap News]

In the semiconductor industry, mature processes generally refer to legacy technologies of 28 nanometers and above. Although competition in cutting-edge semiconductor technology below 3 nanometers is fierce recently, semiconductors produced with mature processes are widely used as components in everyday devices from smartphones to military weapons.

The problem worsened during the COVID-19 pandemic when there was a shortage of automotive semiconductors such as microcontroller units (MCUs) used in vehicles, which are also produced using mature processes. If a specific country dominates the semiconductor market produced not only by advanced processes but also by mature processes, dependence on that country becomes inevitable. This reflects the U.S.'s firm determination to prevent China from dominating this sector.

Legacy products account for 75% of the total semiconductor market. According to market research firm IBS, China's share of the global legacy semiconductor market is expected to increase to the 40% range by 2025.

In particular, the Joe Biden administration is known to have a strong will to prevent semiconductors from becoming a point of expanding China's influence. Given that the Chinese government is actively subsidizing mature processes at the national level to circumvent U.S. regulations and that Chinese semiconductor companies are continuously building factories, the U.S. sees a strong need to block this. The U.S. and the EU are reportedly concerned about China's moves to dominate the market for economic and security reasons.

A senior official of the Biden administration stated that while there are no immediate plans to review or take action, information is being gathered and all options are on the table for discussion. U.S. Secretary of Commerce Gina Raimondo recently participated as a panelist at an event and said, "The massive funds China is pouring in through subsidies will cause an oversupply of mature process semiconductors," adding, "This is an issue we need to consider and one that requires a response together with our allies."

This is not the first time the U.S. has tried to prevent China from dominating the mature process semiconductor market. The U.S. pressured the Dutch government to block the export of extreme ultraviolet (EUV) lithography equipment, essential for advanced semiconductor production, by the Dutch semiconductor equipment manufacturer ASML to China, and has additionally restricted the export of some deep ultraviolet (DUV) lithography equipment. DUV equipment is mainly used in mature processes.

However, the U.S. included an exception clause in the Semiconductor Incentive Act enacted last year, mentioning mature processes of 28 nanometers and above, allowing semiconductor companies receiving U.S. government subsidies to invest in facilities for mature processes even if they have factories in "foreign concern countries" such as China.

This content was produced with the assistance of AI translation services.