Micron Technology, the biggest U.S. memory chipmaker, has been targeted by China in response to Washington’s efforts to restrict Beijing’s access to key technology. This move could benefit Micron’s key rivals – South Korea’s Samsung Electronics and SK Hynix – in the near term. However, the growing geopolitical tensions cast a shadow over the industry as firms need to navigate rising uncertainties that could impact investment and supply chain management.
The White House has asked South Korea to urge its chipmakers not to fill any market gap in China if the sale of Micron products were restricted. This is a stark reminder of the risks facing the global chip industry as it braces for escalating Sino-U.S. trade tensions. Companies have to address both production and sales, and it is becoming increasingly difficult to make investment decisions.
The industry is one of the most capital-intensive manufacturing sectors, requiring construction of clean rooms and purchase of sophisticated chip manufacturing tools. In China, Samsung and SK Hynix have invested billions of dollars in their chip factories, which import some equipment such as etching machines from the United States.
It is clear that the U.S.-China hegemony war is here to stay, and now it’s chips, later it will be rare earths, raw materials. Companies must accept the rounds of Sino-U.S. trade war as status quo, while roundabout ways of importing memory chips may emerge in response to any further geopolitical pressure.