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Chip industry globalisation under threat says chief of China's YMTC - Reuters

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SHANGHAI, June 29 (Reuters) - Geopolitics and the national security concerns of some countries are threatening the globalisation of the world’s chip industry and its future growth, the chairman and acting CEO of memory chipmaker Yangtze Memory Technologies (YMTC) said on Thursday.

Chen Nanxiang said in a speech at the opening ceremony of the Semicon China conference in Shanghai that this made him doubt whether the global semiconductor industry could realise an earlier forecast that it could see $1 trillion in sales by 2030.

"There is a lot of government intervention, and a lot of political content is added in the middle," he said, adding that he fully agreed with comments the founder of Taiwan's TSMC, Morris Chang, made in March about how globalisation in the chip sector was "dead".

He did not name any countries.

"Our industry itself is cyclical, and each practitioner has his own way of dealing with the cycle. However, the high degree of uncertainty we face is precisely due to the destruction of globalisation," he said, adding that he personally felt that the global industry was entering a "period of turmoil".

Modern chipmaking involves more than a thousand steps and requires complex intellectual property, tools and chemicals from around the world.

China is one of the largest chip markets and the country has been trying to build up its domestic manufacturing capability but in recent years has come under pressure from the United States which is keen to undercut these efforts.

YMTC is among key Chinese firms caught in the crossfire, after Washington enacted export control curbs against it and over a dozen other players in the Chinese artificial intelligence chip sector on a trade blacklist last year over fears it could divert American technology to previously blacklisted Chinese tech giants Huawei Technologies Co Ltd (HWT.UL) and Hikvision (002415.SZ).

The move barred YMTC's suppliers from shipping U.S. goods to it without a difficult-to-obtain licence.

Chen hinted at YMTC's own troubles during his speech, with a direct appeal to equipment suppliers in attendance.

"For YMTC that I manage, we can no longer procure parts and components for equipment we had legally bought. If it is fair, please set up some fair rules to buy back the equipment," he said.

Additional Reporting by Shanghai Newsroom and Casey Hall; Editing by Muralikumar Anantharaman and Christina Fincher

Our Standards: The Thomson Reuters Trust Principles.

Thomson Reuters

Brenda Goh is Reuters’ Shanghai bureau chief and oversees coverage of corporates in China. Brenda joined Reuters as a trainee in London in 2010 and has reported stories from over a dozen countries. Contact (used only for Signal): +442071932810

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