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Competition has sparked in the middle and lower ranks of the semiconductor foundry market. There is a lot of interest in whether SK Hynix will be able to reach the global top 10after acquiring Key Foundry. China's foundry industry has also emerged as an opponent to watch out for,after they made large-scale facility investments.

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If SK Hynix completes their acquisition of Key Foundry, the combined sales with SK Hynix System IC, a subsidiary of the foundry, would have exceeded 1 trillion won last year. DB HiTek's sales reached 1.56 trillion won last year, and the battle for the second place after Samsung Electronics in the domestic foundry is expected to intensify. SK Hynix System IC and Key Foundry's 8-inch wafer-based semiconductor production capacity will also surpass DB HiTek with 185,000 units per month.
Growth in sales is also expected once SK Hynix System IC operates its Wuxi plant in China this year. SK Hynix System IC's sales reached 700 billion won last year, a slight decrease from the previous year despite a surge in demand for 8-inch semiconductors. This is because their production volume was adjusted after moving major facilities from the Cheongju plant to the Wuxi plant. Relocation has been completed, and they will expand their market share by resuming operations in the factory.

SK Hynix is ​​in the process of obtaining approval from major countries to acquire Key Foundry. The industry expects that the acquisition will be completed within the first half of this year or within this year at the latest. After the acquisition, 'SK Hynix Foundry (SK Hynix System IC + Key Foundry)' is expected to compete with DB HiTek and China's Nexchip for the top 10th spot in the global foundry rankings. According to TrendForce, a market research firm, DB HiTek consistently occupied the10th spot. However, in the fourth quarter of last year, it forfeited its spot to China'sNexchip.
China's aggressive investment is also a subject of caution. In addition to Nexchip, SMIC (5th) and Huahong Group (6th) are also significantly increasing their production capacity with large-scale facility investments. SMIC made a facility investment of $2.13 billion (about 2.6 trillion won) in the fourth quarter of last year. This is a 97% increase compared to the previous quarter.

Huahong Group also invested $382 million (460 billion won) in the fourth quarter, up 51% from the previous quarter. An official from the semiconductor equipment industry said, "Chinese foundry companies, are investing heavily into larger processes, since it is virtually impossible for them to convert to advanced processes," adding, "Imports of semiconductor equipment are also the highest they have ever been."
On the other hand, domestic companies seem hesitant to expand their capacity. This is due to the uncertainty on how long the market demand will continue. They are slightly increasing their production capacity by installing semiconductor equipment inunused spaces and improving operational efficiency. Even though DB HiTek's facility investment last year was the largest ever, at 115.2 billion won, their investment is not large compared to China's foundries.
Attention is also being paid to the ninth-ranked Tower Semiconductor. Last month, Intel acquired Tower and officially entered the 8-inch semiconductor foundry market. As Intel continues its aggressive investments, the possibility of expanding its Tower production capacity cannot be ruled out.

By staff reporter Dong-joon Kwon (