Forty years after bringing down Japan's chip industry, the United States has set its sights on South Korea.
In 1985, the Plaza Accord between the US and Japan ended Japan's semiconductor hegemony.
Forty years later, South Korea also stands at a similar crossroads.
Some time ago, the US planned to revoke the "Validated End-User (VEU)" system for South Korea, requiring South Korean enterprises to apply for individual licenses for each import of US equipment.
From the original green channel where there was no need to apply for a license on a case-by-case basis to having to submit for review every time they use the equipment, the tightening of US supervision over South Korea has made South Korea feel extremely suffocated.
Over the years, South Korea's semiconductor chip industry has been deeply tied to the US. Although it can use US technology and equipment, it cannot carry out iterative upgrades.
On the surface, the US has brought prosperity to South Korea, but in fact, it is a cruel technological stranglehold.
01 South Korea vs. Japan: 65 Years of "Seeking Favor"
Initially, South Korea should thank its "arch-rival" Japan for the development of its semiconductor chip industry.
After World War II, the US strongly supported Japan, and Japan became an important global technological power.
By 1972, Japanese enterprises such as Toshiba and Hitachi improved US technology, enabling the yield rate of DRAM (Dynamic Random Access Memory) chips to surpass that of the US.
Toshiba advertisement on the streets of Harbin
Once they gain strength, they will explore new boundaries.
In 1982, Japan committed the most serious "betrayal" - the Konigsberg Incident.
Against the backdrop of the Cold War between the US and the Soviet Union, Japan secretly sold important military equipment to the Soviet Union.
At that time, both the Soviet Union and Japan had their own difficulties.
First, the Soviet Union urgently needed to develop new submarine propellers because the noise of its submarine propellers was so loud that the US military could track its position 200 nautical miles away, but there was no production equipment in the country.
On the Japanese side, the export orders of enterprises such as Toshiba decreased dramatically, and they faced a serious business crisis.
In desperation, the Soviet Union, in its characteristic boldness, offered to buy the "MBP-110S nine-axis five-linkage CNC machine tool" needed for propeller production from Japan at ten times the price.
Toshiba then secretly provided four CNC machine tools to the Soviet Union through Kongsberg Gruppen (translated as "Konigsberg" in Russian), which helped improve the stealth of Soviet submarines by ten times. It also forged export documents to avoid review.
Seven-bladed propeller for submarines processed by Soviet using Japanese precision machine tools
This was a big problem.
At that time, Japanese cars accounted for 22% of the US market, and Japan's global share of semiconductors exceeded 48%, replacing the US as the world's largest semiconductor producer.
Japan took advantage of the opportunity, while the US was nurturing a potential threat.
Coincidentally, South Korea had completed the technological accumulation of integrated circuits and gradually shifted its industrial focus from packaging to wafer manufacturing.
Wafer
In the 1980s, South Korea promulgated the "Semiconductor Industry Development Plan". Samsung paid $3 million to Micron, a US enterprise, to obtain the design license for 64K DRAM. SK Hynix introduced equipment and processes from Texas Instruments.
When IBM sold chip production technology to Samsung, Wall Street capital behind it invested in Samsung through preferred stocks, becoming an important part of its 53% foreign capital.
As a result, the orders for Japan's DRAM chips began to decline.
Taking advantage of the fierce competition between Japan and South Korea, the US developed the 256K DRAM memory chip in 1982 in an attempt to consolidate its position as the global technology leader.
However, Japan launched chips of the same level at a lower price, defeating US enterprises with extremely high cost - effectiveness.
Angry US capital implemented semiconductor trade counter - measures against Japan in 1985 on the grounds of national security:
It launched the largest - scale anti - dumping investigation on Japanese chips in history, forcibly restricted the export share of Japanese chips, and ordered Japanese chips to increase in price by 100% through the US - Japan Semiconductor Agreement.
Finally, under the influence of the Plaza Accord, Japan adopted an aggressive monetary easing policy to cope with the impact of the appreciation of the yen and quickly entered the "Lost 30 Years".
Group photo of representatives of the five countries signing the Plaza Accord
By 1995, Japan's global share of semiconductors had fallen to less than half of what it was a decade ago.
On the contrary, South Korea's semiconductor industry achieved rapid expansion.
In 1992, Samsung launched the world's first 64M DRAM, and in 1996, it mass - produced 1GB DRAM, pushing South Korea's share in the global DRAM market from less than 5% in the 1980s to over 30% in the mid - 1990s.
The US's help and South Korea's loyalty formed a positive cycle of cross - border industrial cooperation in the short term.
However, this situation was soon broken again.
02 The Global Game "Made by the Chinese"
The current awkward situation of South Korea's chip industry is not only due to the influence of Western countries but also a result of trends.
Let's recall a day in 1988 when Andy Grove, the CEO of Intel, visited TSMC's Hsinchu factory.
Andy Grove
Andy Grove was a colleague of Morris Chang, the founder of TSMC, when they worked at Texas Instruments.
He came to TSMC at the invitation of Morris Chang for an inspection in preparation for an important chip foundry business.
When working at Texas Instruments, Morris Chang realized that the technical content of the chip manufacturing process was no less than that of the design process, and the upfront investment cost was astronomical.
Therefore, Morris Chang judged that splitting the upstream and downstream of the semiconductor chip industry and providing foundry services for multinational giants would be very promising.
However, to make a name for himself, he needed the strong support of Intel, a super - large enterprise.
For this reason, Morris Chang led a large - scale upgrade and rectification of TSMC, increasing the yield rate from 50% to 80%.
Morris Chang
Since then, TSMC, a "pure foundry", has become one of the most unique players in the global chip industry.
On the one hand, it only engages in foundry business and does not sell chips itself.
It only focuses on two things in its life: one is to produce chips, and the other is to keep secrets.
On the other hand, TSMC is a "master of cost" in the chip industry.
While replacing the traditional IDM model with the foundry model, it not only saves money for technology companies but also adds a quality inspection link between enterprises, improving the quality of chips and ultimately helping enterprises significantly improve the cost - effectiveness of chip procurement.
In just a few years, TSMC has become firmly embedded in the production link of the semiconductor chip industry like a backbone.
Imagine that there are countless clothing brands in the world, and dozens of the top ones all find a single factory for production. This factory not only keeps secrets for each brand but also remains low - key and focuses on production.
What does this mean?
It's like the "hidden master" in the chip world.
TSMC has actively participated in industrial chain innovation, taking on all aspects of manufacturing. All those US technology companies only need to focus on design and marketing. Such a good thing is hard to come by.
Therefore, whether it's Qualcomm and NVIDIA, which make chips, or Apple and Tesla, or the most cutting - edge OpenAI today, they all rely on TSMC's foundry services.
Jensen Huang and Morris Chang
Back to the main topic.
Under the overall planning of Western powers, TSMC was able to enter the market smoothly because it provided new rules to replace the old ones, thus changing the cost structure of the semiconductor industry and showing new possibilities to the upper - level of the industry.
Therefore, when South Koreans look back at the development history of the semiconductor industry, they find that history always repeats itself.
Only this time, the target locked by Western powers has changed from its neighbor Japan to itself.
And its original position will be shared with TSMC.
However, TSMC also poses another threat to the West, which is the rise of China's chip industry.
In 2020, the US pressured TSMC to stop manufacturing 7nm Kirin chips for Huawei.
By 2025, the restrictions were further tightened. The US prohibited TSMC from producing chips with a process of 16nm or less for Chinese enterprises and required these orders to be completed through packaging factories designated by the US.
Moreover, the US forced TSMC to invest in building a high - cost wafer factory in Arizona to promote the transfer of the semiconductor supply chain to the US.
The purpose of these actions is self - evident.
Looking at it this way, whether it's Japan, South Korea, or TSMC, they all face the same dilemma:
The US chip industry can provide mature technology and equipment to the world, but if you want to move up and gain a higher status, there is no way.
As the saying goes, when the birds are gone, the good bow is put away.
The Asian forces have long seen the situation clearly.
Whether it's Sony and Tokyo Electron in Japan or Samsung and SK Hynix in South Korea, they all hope for a stable way out when the US abandons them after achieving its goals.
Let's look at some easily overlooked comparisons.
In 1969, when South Korea's semiconductor industry was just starting, the country's GDP was only $7.676 billion, less than 5% of Japan's.
However, South Korea, with only 1/98 of the US's land area, has become a key player in the global semiconductor chip industry, and its strength should not be underestimated.
Today, South Korea's GDP has reached $1.86 trillion, a 242 - fold increase.
One may wonder why a country with such strength is being controlled like this?
After decades of hard work, why has South Korea been unable to break through the technological blockade of Western powers?
What South Korea lacks may not be technology at all, but the determination to break out of the historical cycle and move towards independence.
In the global chip industry ecosystem, there are only a few major players, each with its own advantages.
The Netherlands has ASML, the only company in the world that can produce EUV lithography machines, almost monopolizing the global high - end chip market.
Although Japan seems to be on a downward trend, when it was suppressed, it continuously struggled to move upstream in the industrial chain and finally became the main supplier of semiconductor materials and photoresists. About 70% of global chip - manufacturing enterprises use Japanese photoresists.
China, although its chip industry started relatively late, has rare - earth resources and can even use rare - earths to counter US chip sanctions.
Among them, only South Korea has few inherent advantages.
It is not only restricted by the US in terms of technology and equipment but also has a lot of technological overlap with TSMC, lacking irreplaceability.
Perhaps the only thing it can offer is the market it has built over decades of development:
Data shows that South Korea accounts for about 14% of the global semiconductor market and dominates more than 50% of the global market share in DRAM and NAND flash memory fields.
However, it now seems that South Korea may lose this market at any time under the US's policy restrictions.
Firstly, without US technology and equipment, South Korea's semiconductor industry cannot survive independently.
US companies such as Applied Materials, Lam Research, and KLA - Tencor have long provided technology and equipment to South Korea's semiconductor industry.
Even Samsung's Xi'an factory and SK Hynix's Wuxi factory use US equipment, and the proportion of US - related technology exceeds 70%.
Secondly, Chinese orders support half of South Korea's semiconductor industry, which is not what the US wants to see.
Since the establishment of diplomatic relations between China and South Korea in 1992, the semiconductor trade volume between the two countries has increased rapidly. In 2013, China surpassed the US to become South Korea's largest semiconductor export market.
In 2020, South Korea's semiconductor exports to China accounted for more than 35%, and in the field of memory chips, its dependence on China increased to 42%.
Even in the context of the Sino - US technological game in 2024, although South Korea's semiconductor exports to the Chinese mainland decreased from 40.2% in 2020 to 33.3%, South Korean enterprises still maintained product exports to China through re - exports via Vietnam.
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