Due to the disputes between the US and China, several tech companies are left in trouble and confusion. Samsung is looking for a way to deal with this escalating situation. Similarly, SK Hynix is also evaluating the possible options amidst this clash. In this scenario, a recent report from TrendForce (the Taiwanese market research firm) ignites some hope for Samsung. It indicates that Samsung could benefit from the US CHIPS Act (Creating Helpful Incentives to Produce Semiconductors). Since the Act provides various subsidies.
As per the report by TrendForce, the global DRAM share of South Korea is expected to increase from 64% to 65% during the time period of 2023-2025. The US CHIPS Act states that for a timespan of ten years, semiconductor manufacturers can’t expand their production facilities in China. This move will impact semiconductor manufacturers in several ways. Where on the one side they are restricted from expanding in China, on the other hand, they will have chances of aggressive expansion in the US and South Korea.
In order to benefit from the policies, new production facilities are anticipated to be constructed in South Korea and the US. Additionally, the South Korean government has already offered local semiconductor firms like Samsung and SK Hynix it’s full backing. The Korean government will offer a number of incentives and tax breaks to increase the earnings of its local manufacturers and keep them afloat during this downturn in the sector as a whole.
Given the government initiative and offerings of the US CHIPS Act, Samsung could take advantage of the situation. In all this scenario, it is speculated that the production share of China will drop from 14% to 12% during that time period. South Korean shares could increase in the NAND market from 33% to 43%, while China’s share could drop from 31% to 18%.
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