China's 'Folding Technology' Closes Gap in Advanced Chip Processes; Memory Disparity Narrowing

South Korea's dominance in the semiconductor industry faces a growing challenge from China, which is making rapid strides in advanced manufacturing processes, according to semiconductor expert Professor Kwon Seok-jun of Sungkyunkwan University. Kwon warns that the technological gap, particularly in memory technology, could narrow much faster than anticipated, similar to the trajectory seen in the battery and solar panel industries.

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In the past, just like with batteries and solar panels, the memory technology gap could narrow rapidly.

Kwon highlights China's innovative "logic folding" technology, developed by Huawei's subsidiary HiSilicon, as a prime example. This technique allows Chinese firms to bypass US export restrictions on advanced semiconductor equipment. By vertically stacking chips manufactured with older equipment, they can achieve performance levels comparable to cutting-edge processes, effectively circumventing limitations on miniaturization.

While this technology faces challenges such as increased power consumption and heat generation, Kwon believes China's primary goal is not immediate global market entry but to buy time while developing its own advanced equipment. He also points out the significant potential for this stacking and bonding technology to be applied to high-bandwidth memory (HBM) for AI, posing a direct threat to South Korea's memory market leadership.

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The US export ban has given China the justification and motivation to build a self-sufficient ecosystem.

Furthermore, Kwon suggests that US export controls, aimed at hindering China's technological advancement, have paradoxically provided China with the justification and motivation to build a self-sufficient semiconductor ecosystem. He notes that China's authoritarian system facilitates rapid technological integration across companies, supported by a vast domestic market and government backing. This, combined with China's past success in rapidly improving manufacturing yields, suggests that the memory technology gap could shrink dramatically.

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The biggest problem is that despite astronomical capital investment, the actual profit signals generated by AI services are still unclear.

To counter these threats, Kwon urges South Korea to adopt a "rebuild the Gyeongbu Expressway" mindset, emphasizing national-level support and rapid development of infrastructure, including power and water resources. He also describes the development of a "sovereign AI" as a necessary evil for national digital sovereignty, even if its performance is not yet on par with global leaders. The article also touches upon the sustainability of AI investments, noting the unclear profit signals despite massive capital投入.

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The memory market is currently the biggest bottleneck in the AI semiconductor market.