Samsung Wants ‘Common Denominator’ In US-China Chip War

World’s second-largest technology company by revenue, Samsung Electronics Company, is on the look out for a ‘common denominator’, even as the South Korean company navigates restrictions on the United States tech exports to China where it produces its chips.

One of Samsung’s potential challenges is bringing in new chip-making equipment, with Reuters reporting last month that the U.S. looking at limiting their shipments to memory chip makers in China in a bid to whittle down the influence of it’s rivals in the tech market, while also protecting U.S. firms.

Chief Executive Kyung Kye-hyun, who incidentally heads Samsung’s chip business department at a media tour of the firm’s chip-making facilities at Pyeongtaek, South Africa had hammered on the possible challenges when he said:

“There could be some difficulties in the long run when we have to put new equipment into our factory in China”.

“We are not riding on the conflict between the U.S. and China but we are trying to find a win-win solution”,  he said.

Kyung added that it would be difficult for the company to give up the China market, which he posits supplies more than 40 percent of the global IT industry.

Ever since the United States Government under Donald Trump sanctioned Chinese telecommunications equipment makers over national security concerns, the U.S and Chinese authorities have had an acrimonious relationship in the tech sphere.

Tension rose over disagreement between the two countries stance on the Taiwan chip making centre, with the United States last week banning advanced artificial intelligence chips exportation.

Samsung CEO Kyung has expressed strong reservations on a Chip 4′  chip alliance proposal by the U.S which would also include Japan and Taiwan in the alignment. The alliance mandates South Korea to seek the understanding and go ahead of China before any negotiations.

Kyung says Samsung is on the move to find a ‘common denominator’ which would benefit all interested parties including global supply chains.

He noted that the recent reduction in chip demand will likely continue next year adding that Samsung will try to adjust investment to improve profit margins.

He says the company will be needing to build a big hotel to secure big customers, adding that couple of chip design firms are firmly interested in the $17 billion facility Samsung is building in Taylor, Texas where production is expected to begin in 2024.

Samsung, the current largest chipmaker by revenue in the world, on Wednesday announced that it has started production of NAND flash memory chips at it’s third chip line in Pyeongtaek, in what it dubbed as the world’s largest semiconductor production facility.

The Korean giant also plans to make DRAM chips while offering contract manufacturing on the third line, with the chipmaker having started foundation work for a fourth line in Pyeongtaek.