US and China Race to Build the Post-ASML Chip Machine

The United States is pressing hard to rebuild its dominance in semiconductors. The clearest example is the Terafab project declared by Tesla CEO Elon Musk. Musk expects demand for the artificial intelligence chips used by SpaceX and Tesla to grow to the terawatt scale, and he has set a long-term goal of producing one million wafers a month. That is roughly 70% of TSMC's entire production capacity today.

What deserves more attention is his attempt to change the technological landscape. The most advanced chips require extreme ultraviolet (EUV) lithography machines made by the Netherlands' ASML. These machines use short-wavelength light to etch tiny circuits onto wafers. Because supply is limited, chipmakers around the world fight fiercely to receive them even a day sooner.

Even if Musk completes Terafab, cutting-edge chips would remain out of reach for now without ASML's EUV machines. Well aware of this, Musk is pursuing a technology to replace ASML's equipment. The alternative is the free-electron laser (FEL), which produces light by accelerating electrons with a particle accelerator. The idea is to switch the method of generating EUV light to an FEL. Research FELs can stretch more than a kilometer in length, but there is hope that shrinking one for chipmaking and attaching an energy-recovery linear accelerator (ERL) could lower the cost. If it succeeds, it would open a path to mass-producing cutting-edge chips without relying on ASML's EUV machines.

This trend is a serious threat to Korea's chip industry. The core of the gap between Korean and Chinese chipmakers is the technological edge that Korean companies have built up, but U.S. export controls on advanced equipment to China have also played a part. China, in fact, is also researching accelerator-based EUV light sources.

While the United States and China compete in innovation over future chip dominance, the situation at home looks entirely different. Regions continue to clash over hosting chip plants, and labor-management disputes over bonuses are still under way. In the middle of a war, the industry is draining its strength on internal conflict.

This is no time for turf battles inside the well. The United States and China have already entered the "post-ASML" race. Korea's labor, management and government must likewise focus on innovation in technology and productivity. Otherwise, the dazzling achievements built by Samsung Electronics and SK hynix could end up as nothing more than a moment of past glory.