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The US CHIPS Act could benefit Samsung’s semiconductor situation

Business
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Last updated: April 17th, 2023 at 08:24 UTC+02:00

Last month, we reported how Samsung is looking for a way around the restrictions imposed by the US on China. Besides Samsung, SK Hynix, another major semiconductor player from South Korea, is also weighing its options between the US and China amidst the dispute. The latest report by Taiwanese market research firm TrendForce suggests that the US CHIPS Act (Creating Helpful Incentives to Produce Semiconductors) could hugely benefit Samsung, thanks to the subsidies provided.

TrendForce (via BusinessKorea) noted that the South Korean global DRAM share is speculated to increase from 64% to 65% from this year to 2025. According to the US CHIPS Act, semiconductor manufacturers are restricted from expanding their operations and production facilities in China for ten years. Although this will impact the current semiconductor operations of players like Samsung, it will also make way for aggressive expansion in the US and South Korea.

New production facilities are likely to be built in South Korea and the US to take advantage of the policies

Also, the South Korean government has already extended its full support to local semiconductor companies like Samsung and SK Hynix. The Korean government will provide various incentives and tax cuts to boost the profits of its local manufacturers and anchor them in this industry-wide slump.

So, taking advantage of the South Korean government's support and the various offerings of the US CHIPS Act, Samsung could benefit from the situation. As a result, China's production share in the market is forecasted to drop from 14% to 12% in that period. And in the NAND market, the share of South Korea could rise from 33% to 43%, while China's share could dip from 31% to 18%.

Business ChinaDRAMSamsung FoundrySamsung SemiconductorSK HynixSouth KoreaTaiwanUSA

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