Trade tensions between the US and China may not seem to have a direct impact on the semiconductor industry, but subsequent developments of the row – if the two giants fail to make peace – will certainly have profound impact on the chipmaking sectors in both countries, Digitimes Research believes.
Raising import tariffs willl have insignificant impact on China-based chipmakers given that the country exported only US$4.9 billion worth of ICs to the US in 2017. Companies affected by the tariffs row are usually non-China-based ones who operate factory sites in China.
Taiwan-based pure-play foundries and backend houses usually have their fabs in China mainly satisfy demand from their local clients mostly targeting the domestic market. Backend firms such as ASE Technology have manufacturing facilities not only in China but also Taiwan, Singapore, Malaysia, Japan and South Korea, which will allow it to mitigate the impact of the US-China tariff war.
Nevertheless, if the trade disputes between the two nations worsen into a US export ban on key semiconductors and chipmaking tools to China, then players in both sides’ semiconductor sectors, including materials suppliers, could all suffer.
China consumes over US$200 billion worth of semiconductors per year, with nearly half of the chips produced by US-based companies. US customs figures may not truly reflect the actual amounts of US IC exports to China, as many US firms sell their chips to China through their overseas operations.
As for chipmaking tools, China’s IC industry relies heavily on US-made equipment. Applied Materials, for example, has about 20% of its revenues generated from the China market. A US ban on equipment exports to China would hit both China-based chipmakers and their US-based fab tool suppliers.
A US ban on exports of AI-related and other advanced chip solutions to China would also impact not only China-based system device vendors but also upstream chip and related materials suppliers in the US.