Changxin Memory Technologies (CXMT), China's largest DRAM company, will raise 66.6 billion yuan (14.6 trillion won) through a listing on the Shanghai Stock Exchange on the 27th. Analysts expect that based on this fundraising, CXMT will chase Samsung Electronics (DS Division) and SK hynix, leaders in the global DRAM market, while accelerating the development of advanced semiconductor technologies such as high-bandwidth memory (HBM). At a research facility in Shenzhen, China, a prototype of an extreme ultraviolet (EUV) lithography machine—needed for the fine semiconductor processing that the United States has banned from export to China since 2019—has been built and is undergoing performance testing. In response to this Chinese pursuit, some point out that urgent efforts are needed to maintain the wide gap in the semiconductor industry.
Lee Byung-chul, a visiting research fellow at the Sejong Institute, expressed concern in a recent interview with the Seoul Economic Daily at the Sejong Institute in Jongno-gu, Seoul, saying, "China has made fostering its semiconductor industry a major national task and is aggressively bringing in talent, such as scouting engineers from ASML to develop its own EUV lithography machines." Lee joined Samsung Electronics and is a China expert who worked at Samsung Group's China operations for 15 years, from 2005 to 2020. He was also in charge of major Samsung Group projects, including the construction of a semiconductor plant in Xi'an, a semiconductor industry hub in western China. After leaving Samsung Electronics, he received a doctorate in international politics from Ajou University last year and is conducting industry research from a geopolitical perspective.
Lee emphasized that since the competitiveness of the semiconductor industry ultimately depends on talent, top talent must be protected through a "four-part package." "We must make it so that semiconductor researchers can establish themselves as a more attractive profession than doctors or financial company employees," he said, adding, "To this end, semiconductor research personnel must be given fair performance-based compensation." He also explained, "Stock options should be boldly granted to employees who contributed to the growth of high-bandwidth memory (HBM) and other fields, and we must actively pursue military service exemptions to nurture young talent," adding, "In addition, it is necessary to improve the R&D environment for researchers leading innovative semiconductor technologies."
Lee diagnosed that Korea must view China's semiconductor pursuit soberly and hold a sense of crisis. "China is a country that developed atomic bombs, hydrogen bombs, and satellites—the so-called 'Two Bombs, One Satellite'—even under the technology blockade by the United States and the Soviet Union (now Russia) in its early days as a nation," he said. "Now its R&D capabilities, including manpower, investment scale, and use of artificial intelligence (AI), have grown incomparably to those days, so we must not conclude that China's own development of EUV lithography machines will take as long as it did for ASML in the past." He forecast, "If the trend of increasing demand that has followed AI development in the global semiconductor industry slows, and China's mass supply floods the market, the operating profits of Samsung Electronics and SK hynix could drop sharply."
Late last year, Lee wrote a book, "K-Semiconductor Wide-Gap Strategy," which contains ways for Korea's semiconductor industry to maintain its wide gap. He explained that since the semiconductor industry serves as a "chokepoint" for the Korean economy, next-generation technology development is needed to maintain the wide gap. "Just as Iran resisted the United States by blockading the Strait of Hormuz, a 'chokepoint' competition centered on geopolitical strategic points is unfolding," Lee said. "We must not be intoxicated by victory in HBM supremacy. We can only protect the chokepoint by taking leadership in next-generation AI memory such as processing-in-memory (PIM), Compute Express Link (CXL)-based memory, and optical memory." PIM is a next-generation chip that combines computation and memory, while CXL is a next-generation interface that boosts communication speed between graphics processing units and memory.
He also stressed the need to prevent technology leaks. "No matter how advanced a technology is, the wide gap collapses if it leaks," Lee said. "In fact, there was an incident in which DRAM technology from Samsung Electronics and SK hynix leaked to China's CXMT, and an attempt to leak HBM packaging technology was also caught." He continued, "Among the industrial technologies leaked overseas over the past five years, semiconductors were the most numerous, and the damage reaches tens of trillions of won." Emphasizing the need to strengthen penalties for technology leaks, as in Taiwan and the United States, he said, "Since the espionage law was revised this year, it must be strictly applied to industrial spies."
The United States can impose prison sentences of up to 30 years or more for the overseas leaking of national strategic technologies, and Taiwan punishes such cases on par with espionage. A Taiwanese court recently sought a heavy sentence of 14 years in prison for engineers who handed over blueprints and data for TSMC's 2-nanometer process to a Japanese company. Korea recently revised its laws to allow espionage charges to be applied to industrial spying, but some point out that whether active application and punishment will be possible remains uncertain.
Lee also proposed the need for a technology alliance with friendly nations such as the United States, the Netherlands, and Japan. "China has a political system that can strongly push policies despite opposition from stakeholders," he said. "It holds overwhelmingly favorable conditions for competing with global Big Tech through tax benefits and the concentrated deployment of research personnel." He continued, "As major countries such as the United States strengthen export controls against China, we must slow the pace of China's semiconductor rise through a technology alliance with these nations."
