The chief executive of JSR, one of the world’s largest suppliers of a material critical to semiconductor production, said that China’s lack of industrial infrastructure will make it “very difficult” to develop cutting-edge chip-making technology despite striving for self-sufficiency.
Eric Johnson, a rare American executive at a Japanese semiconductor company, also said in an interview that he expects supply shortages in the chip sector to continue into 2023.
US export restrictions on technology needed to make the most advanced chips have prompted China to invest heavily in building its own semiconductor supply chain.
But Johnson said China will struggle to master sophisticated chip-making technology, which is based on a technique known as extreme ultraviolet, or EUV, lithography.
“I think China would also like to develop its own EUV competence, its ecosystem for these things. Honestly, I think it’s going to be very difficult for them to do that,” Johnson said.
Semiconductors, essential for products ranging from smartphones to washing machines, have become a focal point of competition between Washington and Beijing. Joe Biden began his first trip to Asia as US President on Friday by visiting a Samsung chip factory in South Korea and emphasizing his desire to secure semiconductor supply chains.
EUV lithography is an extremely sophisticated process that uses light to etch tiny integrated circuits onto silicon wafers.
Even if China “got a paper on what exactly the chemistry was . . . to make that in purity, and it’s really difficult to get that precision and repeatability,” Johnson said. “It’s not that easy, and they don’t have the supply chain to support that.”
Based in Tokyo, JSR is a leading supplier of photoresists, thin layers of material used to transfer circuit patterns onto semiconductor wafers. Analysts said that JSR has about 30-40 percent of the global market for photoresists used to make advanced chips, and counts Samsung, Taiwan’s TSMC and US-based Intel among its customers.
China is the world’s largest importer of chips and has invested heavily in semiconductor initiatives as part of its Made in China 2025 push, which calls for 70 percent self-sufficiency of key components for critical technologies by 2025.
But Johnson said: “It takes decades and a lot of money to develop leadership skills. . . You really need apps like the iPhone to pay for that stuff.”
Still, Johnson stressed that Beijing is investing aggressively in less advanced chip-making technologies, which are also important, and that China is a big part of JSR’s growth strategy.
He said he wanted to balance the ability to serve customers in China “respectfully” and “responsibly” with “sensitivity to US government concerns and concerns about protecting interests in Japan.”
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“It underestimates how many opportunities there are in China that don’t depend on these cutting-edge capabilities,” he said.
Johnson said it would take until next year to resolve the global chip supply shortages that have been eroding the global economy.
“It just takes time to bring new capacity online, and that new capacity probably won’t really have an impact until later this year or next,” Johnson said.
He said he expected the sector to be particularly “tough” to meet demand for automotive semiconductors, as they use less advanced chips that are less profitable and attract less investment.