Due to Japan's supply of raw materials, Samsung introduced 7 nanometer chips or delayed


Samsung Electronics' ambition to launch its state-of-the-art processor chips early next year could be delayed because of stricter Japanese export controls on semiconductor materials critical to the South Korean industry, people familiar with the matter said on July 11.

(Tokyo Ohka Kogyo), Shin-Etsu Chemical and JSR--, the three main suppliers of photoresist chemicals for Samsung's latest, cutting-edge chip manufacturing projects, told Nikkei News (Nikkei) that they did not know if their supplies would continue to function properly after Japan introduced new controls on July 4.

Japanese companies have been asked to stop all shipments until orders are approved by the government, a senior Japanese government official said. The approval process may take 90 days or more, he said, and each order may be different.

A person familiar with Samsung's advanced chip manufacturing program said that part of the Samsung research project has been affected. The source said, "In order to ensure that the critical photoresist supply in the future can be guaranteed, the company has to temporarily put aside the chip development work related to EUV (extreme ultraviolet)."

Ambition or frustration

EUV photoresist is a coating product for extreme ultraviolet lithography that is critical to the most complex semiconductors. If there is any disruption in the EUV photoresist supply, Samsung's plan to launch a 7-nanometer chip around the end of the year may be frustrated.

Advanced mobile and networking processors are critical to Samsung's flagship smartphones and their 5G telecom devices to be launched next year. They are also important to the company's ambitious plans. It plans to more than double the market share of advanced contract chips from less than 10 percent to 25 percent by 2023, challenging market leader TSMC.

Analysts expressed concern about the schedule of Samsung's advanced chip projects. "We are still worried about whether Samsung can get enough high-end photoresists for its cutting-edge chip production projects in time," said Mark Li, senior semiconductor analyst at Bernstein Research. Replacing photoresist suppliers is extremely challenging."

``If this limitation cannot be resolved quickly, it will certainly slow Samsung's production of its own new processor chips for smartphones. ``It could also undermine'' its ambition to launch state-of-the-art chip production technologies and...its ability to capture market share from TAIC, he added. ``.

According to industry sources, the severity of this impact depends on the duration of the dispute between Japan and South Korea. Japan has acknowledged that its export restrictions on South Korea’s core industries are in retaliation for the country’s inaction on the court’s ruling on compensation claims during World War II.

Japan unexpectedly imposed restrictions on the export of three semiconductor-related materials – photoresist, fluorinated polyimide and hydrogen fluoride – this month, and people are worried about the impact on the global economy. Samsung Electronics and SK Hynix are the world's two largest suppliers of memory chips, controlling more than 70% of the global DRAM (dynamic random access memory) market and more than 40% of the NAND flash market. Most of these important chip manufacturing materials rely heavily on Japanese suppliers.

Raw material supply is unknown

Tokyo Ying Chemical, a supplier of EUV photoresist, said it was "not sure" whether its planned new plant in South Korea would continue to go into production by 2020, as originally scheduled. The factory is designed to support its customers' advanced chip manufacturing projects. JSR, another EUV supplier, is also unsure whether its Belgian factory can supply goods to South Korean customers because some of the technologies are purchased from Japan.

Shin-Etsu, who also supplies EUV photoresist to Samsung, told Nikkei News that the company only produces EUV photoresist in Japan and is therefore applying for an export license. A spokesperson admitted that this may take up to 90 days.

A number of sources said that although Samsung has allegedly accumulated three months of hydrogen fluoride inventory, it is more difficult to maintain EUV photoresist coatings that are important for advanced chip manufacturing. They say that this type of inventory will be ineffective within a few weeks of its launch, and the storage conditions are very demanding, and long-term mass storage is unrealistic.

A chip industry executive said, "It is very rare for chip makers to store these things."

It is also impractical to replace Japanese EUV photoresist suppliers with other sources. ``Replacing Japanese suppliers is not entirely impossible, but it takes a year, because the chip manufacturing process and chip design must be retested, '' said one person familiar with the matter. ``.

Only a few large chipmakers, such as Samsung and TSMC, have the expensive and complex technology needed to make 7 nanometers. TSMC will take the lead in bringing EUV chips to market by the end of this year.

Samsung has long been a global leader in DRAM and NAND chips, producing chips for its own products and external customers. Sources told the Nikkei Asia Review that Japan’s export controls did not seem to have a serious impact on Samsung’s memory chip production, which has been affected by oversupply and prices have fallen in the past year.

However, a number of sources said that if the situation continued, the supplier failed to get the export license quickly, and the company's ambition to challenge the company's position as the world's largest producer of the maker's chip could be delayed.

The South Korean company announced in April this year that it plans to invest 133 trillion won (about $113 billion) by 2030 to strengthen its non-storage logic chip business. The move is widely seen as a challenge to TSMC's global leadership.

Samsung and TSMC dispute

Samsung and TSMC, the world's two largest semiconductor manufacturers, have long competed to develop state-of-the-art chip production technologies to support cutting-edge processors, artificial intelligence and modems.

Chip designers such as Apple, Huawei, Samsung, Qualcomm and NVIDIA often choose to support different camps when preparing new technologies such as 5G, artificial intelligence (AI) and autonomous driving. According to sources, Apple and Huawei are customers of TSMC, while Qualcomm and Nvidia prefer to place orders with TSMC and Samsung at the same time.

Qualcomm did not respond to a request for comment on the "Asian comments". In a statement, the company said the company was looking for a chip, a "We plan to continue to use the two generation plants in the future.", and a Samsung manufacturing chip.

Samsung did not respond to requests for comment. Nikkei News reported earlier that Lee Jae-yong, vice chairman of Samsung Electronics, traveled to Japan on Sunday to meet with executives from major Japanese banks and business partners.

According to Reuters, South Korean President Wen said on Wednesday that executives from 30 Korean business groups including Samsung said, "Although we are solving problems through diplomatic efforts, we cannot rule out the possibility that this situation will continue. "(Lebang)

Discontinued raw materials Samsung launch 7 nano chip delay

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