{"id":145828,"date":"2023-02-03T08:00:00","date_gmt":"2023-02-03T00:00:00","guid":{"rendered":"https:\/\/www.mediaintel.asia\/?p=913165"},"modified":"2023-02-03T08:00:00","modified_gmt":"2023-02-03T00:00:00","slug":"after-japan-and-netherlands-the-us-goes-after-south-korea-to-block-their-chip-trade-with-china","status":"publish","type":"post","link":"https:\/\/www.chinalegalblog.com\/en\/2023\/02\/03\/after-japan-and-netherlands-the-us-goes-after-south-korea-to-block-their-chip-trade-with-china\/","title":{"rendered":"After Japan and Netherlands, the US goes after South Korea to block their chip trade with China"},"content":{"rendered":"
\"MediaIntel.Asia\"<\/a><\/div>\n

South Korea and China have a very solid trade relationship around semiconductors. The robust semiconductor trade flows between China and South Korea, however, are now under pressure as Washington strives to exclude Beijing from global tech supply networks. With that being said, analysts say the US stance would hurt Korea\u2019s chip titans.
\nSeoul has so far not joined the US-led Chip 4 alliance, an initiative with Tokyo and Taipei aimed at undermining China\u2019s role in chip supply chains. South Korea has also not followed Japan and the Netherlands in restricting exports of chip-making technology to China. Still, the once-thriving memory chip trade between the two Asian neighbours is showing signs of deterioration.
\n\u201cIf the US imposes sanctions on Korean companies for doing business in China, it will be difficult to go against them,\u201d said Kim Yang-paeng, a senior researcher with the Korea Institute for Industrial Economics and Trade. This is mainly because US holds the patent of some key aspects as well as some core technology that is essential for the chip-making process.
\nChina\u2019s push for semiconductor self-sufficiency has curtailed imports of several Korean products, adding to the country\u2019s trade deficit. According to a report in the South China Morning post, China\u2019s imports of integrated circuits fell 15.3 per cent in 2022 for the first time in 18 years, a dramatic contrast to double-digit increases in prior years.
\nAt a time when otal exports in Korea grew by 6.1 per cent in 2022 to an all-time high, shipments to China, the country\u2019s main trade partner, declined by 4.4 per cent, the report quoted Korean customs statistics.
\nHowever, Korean chipmakers such as Samsung Electronics and SK Hynix are finding it difficult to grow production in China as a result of Washington\u2019s restrictions on China\u2019s access to modern chip manufacturing equipment.
\nThese early indications of decoupling may become more visible in 2023, when Seoul will be forced to match its semiconductor trade and investment policies with those of Washington, given that the US is Korea\u2019s principal military ally.
\nFollowing the tightening of export controls on advanced chip design and manufacturing technologies to China by the Biden administration last October, Korean chip makers were forced to apply for a one-year grace period in order to continue importing the necessary equipment for their existing facilities in mainland China.
\nIn another step to restrict China\u2019s access to advanced chip manufacturing technologies, the Netherlands and Japan reportedly agreed with the US to restrict exports of certain equipment to China, including some deep ultraviolet (DUV) lithography systems manufactured by ASML, the Dutch equipment maker with a monopoly on the high-end extreme ultraviolet (EUV) machines required to make chips at the 5-nanometer node.
\nWashington\u2019s semiconductor export controls will damage the China businesses of South Korean chip makers like Samsung and SK Hynix by reducing output at their China plants. Up to 50 per cent of production at these China plants are for mainland-based customers, so the Korean companies will have no choice but to cut output if they cannot import certain materials, parts and equipment into China.
\nIn China, Samsung Electronics has two chip manufacturing facilities: a wafer fab in Xian, the city of central Shaanxi province, and a chip packaging factory in Suzhou, near Shanghai.
\nThe Xian plant opened in 2014 as the company\u2019s first foreign memory chip fab, employing over 3,000 people. According to China\u2019s official Xinhua news agency, it represents for up to 40% of Samsung\u2019s total NAND flash manufacturing and is expected to have generated over $14.8 billion in chips.
\nSamsung\u2019s Suzhou plant is in charge of assembling and packaging the die cut from silicon wafers so that the individual chips may be connected to electrical circuit boards.
\nSimilarly, SK Hynix has three factories in China, two wafer fabs for DRAM and NAND flash chips, and a packaging plant in the southwestern city of Chongqing.
\nA recent chip oversupply caused by sluggish consumer demand has harmed the two Korean tech giants. Samsung\u2019s semiconductor unit reported a 97 per cent year-on-year drop in operating profit to 270 billion won in the fourth quarter, while SK Hynix recorded an operating loss of 1.7 trillion won.
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This data comes from MediaIntel.Asia's Media Intelligence and Media Monitoring Platform<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

South Korea and China have a very solid trade relationship around semiconductors. The robust semiconductor trade flows between China and South Korea, however, are now under pressure as Washington strives to exclude Beijing from global tech supply netw…<\/p>\n","protected":false},"author":253,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[65,144,586,755,931,477,693,1607,194,483,759,409],"tags":[10320,10468,1935,10334,3312,2274,3556,2724,1845,2127,10315,2240,10339,10332,6811],"class_list":["post-145828","post","type-post","status-publish","format-standard","hentry","category-beijing","category-china","category-economy","category-factory","category-india","category-investment","category-japan","category-manufacturing","category-news-chinese-law","category-patent","category-samsung","category-shaanxi","tag-biden","tag-bollywood","tag-chongqing","tag-decoupling","tag-electronics","tag-entertainment","tag-export","tag-exports","tag-facebook","tag-import","tag-media-intelligence","tag-military","tag-netherlands","tag-sanctions","tag-semiconductor"],"_links":{"self":[{"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/posts\/145828","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/users\/253"}],"replies":[{"embeddable":true,"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/comments?post=145828"}],"version-history":[{"count":1,"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/posts\/145828\/revisions"}],"predecessor-version":[{"id":145829,"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/posts\/145828\/revisions\/145829"}],"wp:attachment":[{"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/media?parent=145828"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/categories?post=145828"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/tags?post=145828"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}