Global tech giants Tesla and ARM are reshaping the semiconductor landscape by establishing independent ecosystems, signaling a major supply chain shift.
Tesla, ARM Pursue ‘Semiconductor Independence’
Global big tech and semiconductor companies are breaking down existing business boundaries and moving to establish ‘independent semiconductor ecosystems,’ hera
www.businesskorea.co.kr
Global big tech and semiconductor companies are breaking down existing business boundaries and moving to establish ‘independent semiconductor ecosystems,’ heralding a reorganization of the supply chain.
As Tesla pursues semiconductor self-sufficiency, from design to production, and ARM declares it will move beyond being an IP (intellectual property) firm to directly commercialize products, domestic semiconductor companies are busy calculating their gains and losses.
According to industry sources on March 27, the British semiconductor design company ARM recently made its direct debut in the product market for the first time in 35 years, selling its self-designed ‘AGI CPU’ under its own brand.
With ARM, which previously only handled chip design, and Meta, which will actually deploy these chips on a large scale, deciding to collaborate, a shift in the landscape of the server CPU market, long dominated by Intel and AMD, has become inevitable.
This change is expected to have different impacts on each of Samsung Electronics’ internal business divisions. First, for the System LSI Business, which is in charge of semiconductor design, it could become a direct competitor.
Samsung Electronics has been buying ARM’s design blueprints (IP) to create and sell its ‘Exynos’ chips to manufacturers. However, with ARM now entering product commercialization itself, it has effectively turned into a market competitor.
On the other hand, for the Foundry Business, both opportunities and crises coexist. Although ARM has started selling its own chips, it maintains a fabless model without its own production facilities.
As ARM recently stated that it is “also reviewing the possibility of production through Samsung Foundry,” analysis suggests this could be a new opportunity to secure orders that have been concentrated at TSMC.
The impact on the Memory Business is positive. This is because if a new platform like ARM is added to the server CPU market alongside Intel and AMD, the demand for memory such as HBM and DDR5 will increase.
From the perspective of SK hynix, a pure-play memory company, ARM’s entry can be interpreted positively. This is because ARM’s debut could lead to the diversification of the HBM supply structure, which is currently concentrated on NVIDIA.
Supporting these industry expectations, Vice Chairman Jeon Young-hyun of Samsung Electronics and President Kwak Noh-jung of SK hynix sent congratulatory video messages at ARM’s new product announcement event, hinting at strengthening memory cooperation.
President Kwak stated, “High-capacity, high-bandwidth memory is essential for AI data centers,” and “The ARM-based platform will play an important role in expanding AI infrastructure.”
The impact of the ‘TerraFab’ project pursued by Elon Musk’s Tesla also varies. Musk recently unveiled the ‘TerraFab’ plan, involving Tesla, SpaceX, and xAI.
For Samsung Electronics, there are concerns that a client that used to entrust its chips to the foundry is now moving into direct manufacturing, potentially turning a former customer into a competitor.
However, even if Tesla manufactures its own chips, it is realistically difficult for it to produce memory as well. In this respect, it can be expected to have the effect of diversifying demand, which is currently concentrated on NVIDIA.
For SK hynix, which holds a strong competitive edge in the HBM field, this could also act as an opportunity to preemptively capture the newly opening memory market in line with the expansion of demand.
However, the industry believes that big tech’s manufacturing self-reliance will be difficult to achieve in the short term. This is because semiconductor factories require advanced process know-how, as well as astronomical investment and time.
Separate from the technical feasibility, the most immediate threat is talent drain. This past February, Musk posted 16 South Korean flag emojis on his X (formerly Twitter) account to announce a job opening.
He showed a strong interest in South Korean semiconductor talent by leaving the message, “If you are in Korea, join Tesla.”
This is pointed out as a tangible risk that increases the labor cost burden for domestic companies and leads to the departure of key technical personnel.
Professor Lee Jong-hwan of the Department of System Semiconductor Engineering at Sangmyung University noted that while it would be difficult for big tech to achieve manufacturing self-reliance in the short term, he identified talent drain as the most immediate threat.
Professor Lee said, “Companies like Tesla will use their immense capital to suck in key talent,” and “The concern over the outflow of design and process personnel is the most critical risk for our companies