The United States’ recent decision to ban the export of U.S. tech components, software, and goods to Fujian Jinhua Integrated Circuit, a Chinese semiconductor manufacturer, has sent ripples through the industry.
One of the immediate concerns is whether the ban will affect the global supply and price of DRAM circuits, a type of semiconductor chip that’s used to power virtually all computers and electronic devices.
Fujian Jinhua was months away from mass-manufacturing its own DRAM chips, Chinese media reported. The industry anticipated that such a development would immediately affect global DRAM chip prices.
But the U.S. Department of Commerce put a stop to those plans with its announcement of an export ban on Oct. 29, arguing that Fujian Jinhua “poses a significant risk of becoming involved in activities that are contrary to the national interests of the United States.” The Chinese firm—along with much of China’s semiconductor industry—relies on foreign components to manufacture its products.
On Nov. 1, U.S. authorities followed up with an announcement from the Department of Justice that Fujian Jinhua, UMC, and three Taiwan individuals had been indicted in federal court on charges of conspiring to steal trade secrets from Micron, related to the development of DRAM chips.
U.S. Attorney General Jeff Sessions unveiled the indictment at a news conference on Nov. 1, where he also announced that the department is launching a new initiative to pursue cases of Chinese economic espionage more aggressively, highlighting the importance of DRAM technology.
Park Yu-ak, an analyst at Kiwoom Securities, a South Korean financial-services provider, said the ban likely won’t have a substantial impact on the global DRAM industry and prices, according to a Nov. 1 online article published by South Korean magazine Smart PC Love.
That’s because Fujian Jinhua isn’t currently producing DRAM chips, so the ban likely will only make the designing, testing, and manufacturing phases more difficult, Park said.
Chinese semiconductor firms make up a minuscule portion of the world’s DRAM market share. South Korea has the world’s top two DRAM makers, Samsung and SK Hynix, with the former having a market share of 44.9 percent in the first quarter of this year, with the latter at 22.9 percent, according to research firm Trendfore. U.S. memory chip maker Micron, at 22.6 percent, is No. 3.
