The sudden collapse of Japan’s chip giant! China’s semiconductor industry has truly shaken the world this time.
Who would have thought that JS Foundry, once celebrated as a beacon of hope for the revival of Japan’s semiconductor industry, has recently filed for bankruptcy in a Tokyo court? This company, once touted by Japanese media, has now become another casualty on the path of China’s chip rise.
▶ From Industry Star to Bankruptcy Restructuring
The collapse of JS Foundry came swiftly and brutally. At the beginning of 2024, a crucial negotiation with a Taiwanese company fell through, becoming the last straw that broke the camel’s back. A look at their financial records is even more alarming—losing $120 million in 2022, and their production capacity is now less than 30% of what it used to be.
The worst part is their core competency—automotive power semiconductors, which are now being crushed by Chinese manufacturers. Here are some data to illustrate:
In 2020, JS Foundry had a global market share of 8%, but by 2023, it had dropped to just 3%.
During the same period, Chinese companies like Hua Hong and Silan Microelectronics saw their market share soar from 12% to 25%.
“It’s like trying to compete with Huawei in the smartphone market while holding onto a Nokia. An industry expert made a vivid analogy, saying, ‘Their 28nm process is like a small workshop facing the industrial revolution of Chinese companies.'”
▶ The Counterattack of Chinese Chips
The bankruptcy of JS Foundry is not an isolated incident; it reflects the comprehensive explosion of China’s semiconductor industry. In 2023, China’s chip self-sufficiency rate surpassed 30%, an increase of 10 percentage points from three years ago. This speed has even prompted foreign media to exclaim, ‘China’s speed is terrifying.’
Let’s take a look at our trump card:
The National Big Fund has invested 500 billion yuan to support leading companies like SMIC.
Local governments are also striving to build ‘chip towns’; Shanghai’s ‘Oriental Chip Port’ has already taken shape.
In the field of power semiconductors alone, China’s 12-inch wafer fabs account for 28% of global capacity.
A Taiwanese executive, who wished to remain anonymous, complained, ‘Chinese manufacturers are quoting prices at a 30% discount for the same chips; who can withstand that?’
▶ The Awkward Situation of Japanese Semiconductors
The tragedy of JS Foundry is not an exception in Japan. Today’s Japanese semiconductor industry resembles a student with poor grades:
High-end processes are entirely dependent on TSMC, and they cannot handle technologies below 7nm.
The mid-to-low-end market is also being battered by price wars from Chinese companies.
Although materials like photoresists and silicon wafers still account for 50% of the global market, the manufacturing segment has dwindled to just 10%.
The Japanese government has not been idle; in 2021, it invested 2 trillion yen in a ‘semiconductor revival plan.’ Unfortunately, this distant water cannot quench the immediate thirst, as local company Rapidus’s 2nm technology won’t be mass-produced until 2027. A professor from the University of Tokyo bluntly stated, ‘By the time their 2nm is out, China will likely already be working on 1nm.’
▶ A Global Reshuffle in the Chip Landscape
This bankruptcy case has sounded the alarm for the entire world: the rules of the semiconductor industry have been completely rewritten by China.
The U.S. has invested $52 billion in the CHIPS Act, but Intel’s factories won’t be operational until 2025.
Europe’s ‘chip autonomy plan’ is even more laughable, with costs so high that even their own people can’t stand it.
On the Chinese side? SMIC’s 14nm is already in mass production, and the 7nm R&D is nearing completion.
Industry leaders predict, ‘In five years, 70% of the global mature process capacity will be in China. By then, companies from Europe, America, and Japan will either have to transform or shut down.’
▶ Challenges and Opportunities for Chinese Chips
However, we shouldn’t celebrate too early; there are still three major mountains to climb:
The U.S. may further tighten the noose, with key equipment like EDA tools and lithography machines potentially being cut off at any time.
With 32 wafer fabs under construction nationwide, we must be careful not to create an oversupply.
Core areas like IP cores and high-end lithography machines still need significant effort.
The suggestion is simple: in the short term, focus on domestic markets like new energy vehicles and photovoltaics; in the long term, we must strive for advanced processes and maintain good relations with equipment giants like ASML.
This chip war has already entered a heated stage. As industry insiders say, ‘In the past, Japan taught the world how to make semiconductors; now it’s China’s turn. The collapse of JS Foundry is just the beginning; the best is yet to come!’