China's semiconductors face oversupply crisis

China's semiconductors face oversupply crisis

China's spending on chipmaking equipment is forecast to fall an average of 4% annually through 2027, signaling the country's semiconductor industry is facing a glut crisis.
What opportunities does Vietnam have in the semiconductor industry race?

What opportunities does Vietnam have in the semiconductor industry race?

Dr. Nguyen Tue Anh, co-author of the book "Semiconductor Battlefield - China's Strategic Competition and Innovation Autonomy in the 21st Century" gives a perspective on Vietnam's opportunities and challenges in the semiconductor industry race.
Vietnam becomes an important link in the global semiconductor supply chain

Vietnam becomes an important link in the global semiconductor supply chain

Semiconductors are a fundamental, key industry that Vietnam has identified as a focus for promotion with the goal of becoming an important link in the global supply chain.

Remove working hours limit

The South Korean government has proposed a special chip law to subsidize chipmakers and exempt them from nationwide working hour limits, in a bid to address potential risks from measures taken by incoming US President Donald Trump.

The semiconductor industry is vital to the trade-reliant economy , Asia's fourth-largest, with chips accounting for 16% of total exports last year.

Last week, South Korean President Yoon Suk Yeol warned of risks arising from Mr Trump’s threat to impose high tariffs on Chinese imports, which could prompt Chinese rivals to cut export prices and weaken South Korea’s chip industry overseas.

The bill will need to be approved by parliament before becoming law. Seoul’s move comes as chipmakers such as Samsung Electronics prepare for increased competition from rivals in China and Taiwan.

https d1e00ek4ebabms.cloudfront.net production 53ca073e 911b 425e 8c7a eb24ed191eee.jpg.jpeg
Trump's election poses an uncertain future for the Chip Act's subsidy policy. Photo: FT

One part of the bill would allow employees involved in research and development in the semiconductor industry to work more than the 52-hour maximum per week set by current labor law.

South Korea's largest conglomerate by market capitalization - Samsung Electronics is lagging behind rivals such as TSMC and SK Hynix in taking advantage of the booming AI demand.

Meanwhile, in October, Mr. Trump threatened to cut federal chip subsidies, including for Samsung and South Korea’s SK Hynix, in favor of imposing import tariffs.

$65 billion subsidy

Another East Asian country, Japan, is preparing to propose a $65 billion plan to provide multi-year financial support to domestic semiconductor companies.

This is part of an effort to strengthen control of the chip supply chain in the face of global shocks, including US-China trade tensions.

The plan is specifically aimed at foundry joint venture Rapidus and chip suppliers in the artificial intelligence sector, the sources said.

Rapidus is aiming to mass produce advanced chips on Japan's northern island of Hokkaido from 2027 through a partnership with IBM and Belgium-based research organization Imec.

Last year, the Japanese government said it would allocate about 2 trillion yen ($13 billion) to support the chip industry.

Tokyo's comprehensive economic package is expected to be approved on November 22, calling for a total of 50 trillion yen in investment in the semiconductor sector over the next 10 years, with an expected economic impact of 160 trillion yen.

(Synthetic)

China 's semiconductor industry faces overcapacity crisis China's spending on chipmaking equipment is forecast to fall by an average of 4% per year through 2027, signaling that the country's semiconductor industry is facing a overcapacity crisis.