Merck Group expects the US’ semiconductor export restrictions on China to have a “low” impact on the company’s electronics business, given China’s minimal exposure to the global cutting-edge semiconductor material market, a company executive said yesterday.
In China, a mere 5 percent of its total semiconductor capacity is leading-edge technology — an insignificant portion of the world’s leading-edge technology market, Merck Electronics CEO Kai Beckmann told reporters in Taipei.
“It is increasing, but it is still a very small basis,” Beckmann said.
Photo: Lisa Wang, Taipei Times
Since the US’ curbs on semiconductor exports limit leading-edge technology, manufacturing tools and materials, the impact on Merck “is low,” he said. “Complying with changing rules is part of our DNA.”
“We are complying with different rules. We are not overly nervous about this one,” he said.
On top of that, Merck has been pursuing a model of creating solutions for strong local supply resilience long before the US chip restrictions, he said.
This model is aimed at proximity to customers, rather than being a response to politics, he said.
“We have a highly localized approach in running our business,” Beckmann said. “We are able to supply our customers locally.”
Such a business strategy has allowed Merck to catch every single order, unhampered by the COVID-19 pandemic lockdown or logistics congestion, he added.
As Taiwan is the world’s biggest consumer of leading-edge semiconductor materials, Merck has built a significant presence, Merck said.
Taiwan makes up 70 percent of the world’s leading-edge semiconductor materials, followed by South Korea, which has a 30 percent share, it said.
The leading-edge technologies refer to 7-nanometer process technology and more advanced technologies, it said.
Merck in February held a groundbreaking ceremony for a new semiconductor solutions mega site in Kaohsiung, as the German company looks to bolster supply chain resilience and growth. The first phase of the site is to start operations in 2026.
When asked about Germany’s budget crisis and its potential impact on bringing new semiconductor capacity expansion in the country, Beckmann said he was “not concerned at all.”
“Eventually the investments to Germany will happen,” he said. “The government will eventually get the budget right.”
Germany’s budget crisis has ignited concerns that Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) could delay or even cancel its plan to build a manufacturing fab in Dresden if no subsidies are available. TSMC has not commented on the matter.
TSMC announced in September that it planned to build a 12-inch wafer fab in Dresden to make automotive chips in partnership with major customers, including Robert Bosch GmbH, Infineon Technologies AG and NXP Semiconductors NV.
Total investment is expected to exceed 10 billion euros (US$10.78 billion), consisting of equity injections, borrowing and support from the EU and German government, TSMC said at the time.
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