According to Nikkei, because China is both a US technological competitor and a market that American companies dream of, chip makers like Western Digital must move forward in this controversial business environment.
Semiconductors are indispensable for the iPhone and Tesla that consumers desire, as well as the advanced radar and precision-guided weapons required by the military. However, under the leadership of US President Joe Biden, the US pressure to restrict China’s access to the US supply chain shows no signs of abating.
In the latest interview with Nikkei, Western Digital CEO David Goeckeler said that governments around the world have gradually adapted to the importance of semiconductors, but it will not be easy to decouple the US chip industry from China or any market. thing.
Goeckeler said that in the semiconductor field, “you want to enter the global market” and “use this scale to reinvest in R&D.”
He said: “This is how you move on.” “Therefore, you have to be careful not to limit the market you serve.”
China is the world’s second largest economy, with such a large technology group, Alibaba Group Holdings, Tencent Holdings and Huawei Technologies, as well as many smaller players, so this number has doubled here. Goeckeler said that Western Digital will take big steps to restrict the export of US technology. (Goeckeler said Western Digital will take US technology export restrictions in stride.)
A former Cisco network executive said that China “is a very important market for us, and we will continue to pursue this market.”
He said: “Currently, our sales locations in China are subject to some restrictions…. The U.S. government has some regulations on whom we can and cannot sell to, and we will follow these regulations.”
Regarding the possible conflict between national security and the goal of running a multinational company, the CEO of Western Digital said that technology has brought a better life for everyone. He added: “Therefore, I think this is very important, but there are also extremely important national security issues.”
Western Digital hopes that it can solve national security issues, “Don’t fork the technology roadmap we are pushing, but this is a complicated environment,” he also said.
The Biden administration stated at a summit with Asian leaders that ensuring US chip technology is a top priority.
Biden and Japanese Prime Minister Yoshihide Suga reached an agreement in April that the United States and Japan will “form a sensitive supply chain (including semiconductor) alliance to promote and protect key technologies vital to their safety and prosperity.” This month, during a visit to the United States by South Korean President Moon Jae-in, he announced that Samsung Electronics plans to spend US$17 billion to build a new US chip factory.
The world’s largest contract chip maker TSMC and US chip maker Intel also have their own plans for a new US fab. This will mean that the world’s three major chip manufacturers will have new production capacity in the United States, thereby promoting Washington’s goal of transferring the technology supply chain to the country.
China, eager for semiconductor devices and also committed to self-reliance, also established Yangtze Memory Technology Co., Ltd. This company, which only appeared in 2016, is considered to be the main force in China’s creation of the domestic semiconductor industry.
When asked about the prospects of these Chinese competitors catching up, Goeckeler said: “Business is difficult.” “Technology is difficult. To engage in technology business requires a lot of energy and technology.”
Goeckeler went on to say: “And all of us must invest a lot of money in order to maintain the leading position of leading technology.” He said: “Of course I respect all my competitors, but they have a mountain to climb, new entrants. there’s still a long way to go. “
Japan’s semiconductor industry has fallen from the commanding heights it once occupied in the 1980s. In terms of chip technology, one of the few remaining leaders in Japan is Kioxia. NAND flash memory was also invented by Japanese companies in the 1980s. The Western Digital-Kioxia partnership is based on NAND, which is an indispensable part of today’s digital economy, used in data centers and personal computers and other equipment.
Goeckeler said that although the demand for another memory DRAM is also growing, “I think NAND flash memory is the fastest growing part of the entire semiconductor industry.
The CEO said that Western Digital sees Kioxia as “a model of U.S.-Japan cooperation in the very important semiconductor field.”
Kioxia was spun off from Toshiba, allowing foreign investors to own a majority stake in the industrial group, which is one of the crown jewels of Japanese companies. But Kioxia’s engineering talent can still be said to be an asset of Japan-which may have a strong appeal to the United States.
When asked whether Western Digital has received a request from the US government, Goeckeler said: “I won’t go into all the details of dealing with the government, but I think governments all over the world are seeking to understand the semiconductor field better.”
The Wall Street Journal reported that Western Digital and American counterpart Micron Technology are both considering a deal with Kioxia. Goeckeler declined to comment on “rumors” about the company’s acquisition strategy.
Due to the emergence of the pandemic, automakers have been forced to cut production due to insufficient chip supply, which has aroused greater concern in the industry.
Goeckeler also said: “We have seen a shortage of semiconductors and realized that we need to invest more in this area.” He pointed out that the Biden government “has been very supportive” of the industry.