Japan curbs blight Samsung’s system chip vision

Samsung Electronics’ goal of becoming the top logic chip provider by 2030 might be seriously hampered by Japan’s restrictions on exports of hi-tech materials, if the two governments fail to ease the diplomatic tensions soon, according to industry sources Thursday.

The tech giant’s April announcement to be the world’s No. 1 in the system-on-chip market beyond memory chips is the first official task of its de facto leader Vice Chairman Lee Jae-yong.

However, the latest Japanese curbs on semiconductor materials might hinder its goal, because its success depends on the photoresist materials essential for extreme ultraviolet lithography infrastructure. 

Samsung is pilot-running a small EUV line in Hwaseong, Gyeonggi Province, for its foundry clients to produce chips on the 7-nanometer process, and is constructing another larger line with a schedule to launch operations in September.

Samsung’s key customers like Qualcomm and Nvidia will be cranking out high-performance computing chips on this new EUV line, starting next year. Japan is nearly monopolizing production of photoresists and also blank masks needed for photolithography.

According to experts, Japan could expand the curbs further to several other materials including blank masks, which will directly hit Samsung’s EUV facilities.

“It’s not an exaggeration to say that the EUV technology can determine the future of Samsung’s chip business,” said an industry official. “There are no immediate concerns, because the EUV line is only doing trial runs, but it is almost impossible to procure substitutes of the Japan-made photoresists.”

Samsung heir Lee who hopped on a jet to contact the company’s chip material suppliers on Sunday stayed in Tokyo for five days.

Although his whereabouts were not made public, there are speculations that he contacted several shareholders of photoresist makers in Japan, including JSR.

“Lee’s urgent trip to Tokyo implies how desperate he is about the system chip business,” said a market watcher. “Advancing the EUV technology is the only way Samsung can overtake rival TSMC.”

By Song Su-hyun (song@heraldcorp.com)