"We must not evaluate China’s memory semiconductor (hereinafter 'memory') technology catch-up speed based on our conventional wisdom. China effectively utilizes one year as if it were two to three years."
Professor Baek Seo-in of Hanyang University's Department of Global Culture and Trade stated this in an interview with MoneyToday on the 4th, emphasizing that attention should be paid not only to the level of China’s memory industry technology but also to its "catch-up speed." His analysis indicates that support policies from central and local governments, the domestic market, and the research ecosystem are working together to accelerate technological accumulation. Professor Baek is recognized as an expert in science and technology and industrial policy, having majored in precision mechanical engineering at Tsinghua University in China and served as head of the Science and Technology Diplomacy and Security Research Team at the Korea Institute for Science and Technology Policy.
Professor Baek particularly evaluated that China’s central government industrial policies are focused on "demand creation." He explained that the Chinese government provides incentives to companies adopting domestic semiconductors, and even products with low initial yields are absorbed by the public sector to create a market. He stated, "Chinese companies do not prefer domestic chips when performance is considered alone," but added, "Because the government creates demand and covers costs, companies can buy time to accumulate technology."
In fact, alongside demand policies, the Chinese government has simultaneously implemented industrial support covering taxation, finance, research and development (R&D), and talent development. A representative example is the "High-Quality Development Policy for Integrated Circuit and Software Industries" announced by the State Council of China in 2020. This comprehensive support plan covers eight areas: finance and taxation, financial investment, R&D, import/export, talent, intellectual property, market utilization, and international cooperation. Chip production companies applying processes of 28 nanometers (nm) or below were granted corporate tax exemptions for up to 10 years. Additionally, large-scale long-term funding was supplied through so-called "Big Funds," investment funds. Professor Baek emphasized, "Moving beyond the simple method of providing subsidies alone, China has created an environment where domestic chips can be produced, improving the quality of its semiconductor industry."
He further suggested that considering China’s catch-up speed, Korea must also re-examine the direction of its industrial policies. He pointed out that it is urgent to create an environment where companies can continue investments and R&D without political logic interfering. He noted, "In Korea, even debates over fab (factory) locations reflect political interests," and added, "Korea has players like Samsung Electronics and SK Hynix that are best positioned to compete in the global market." He stressed, "Support that allows companies to shorten time and costs is crucial."
Moreover, China is actively implementing support measures that go beyond tax benefits to directly lower corporate investment costs. Equipment purchase costs are covered with cash support, and the scale of support expands for more advanced processes. Local governments also provide support for research personnel, housing, electricity, and water supply. Professor Baek introduced this as, "In short, it is a method that reduces corporate cost burdens while directly increasing incentives."
However, he clearly pointed out China’s weaknesses. He predicted that in core areas such as EUV (extreme ultraviolet) lithography equipment, the gap will be difficult to narrow in the short term due to the impact of U.S. export controls on China. Regarding recent Chinese achievements in developing DUV (deep ultraviolet) lithography equipment, Professor Baek stated, "EUV is a field requiring a global supply chain involving hundreds of companies and decades of accumulated component technologies," and diagnosed that "it will take quite some time to narrow the gap."
He also identified securing competitiveness in overseas markets as a challenge for Chinese memory companies. He said, "Even if they do not overtake Korean memory companies, China’s market share will gradually expand," but added, "The key point to watch is whether they can gain market share outside of China." Finally, he remarked, "There is still insufficient deep analysis or evaluation of China, so 'knowing the enemy and knowing oneself' remains elusive," and concluded, "Government policies must be established based on proper judgment."
in INDUSTRY
