“China and South Korea Strengthen Cooperation in Semiconductor Supply Chain Amid US-China Conflict”

On the 26th (local time), (from left) Deok-geun Ahn, head of the Ministry of Trade, Industry and Energy, and Wang Wentao, Minister of Commerce of China. A screenshot of the website of the Ministry of Commerce of China
Amid the deepening conflict between the US and China over the semiconductor supply chain, the Chinese government announced that it had agreed to strengthen cooperation with South Korea in the semiconductor supply chain, drawing attention to the content and background.

On the 26th, the Ministry of Commerce of China announced on its website that Deok-geun Ahn, head of the trade negotiations headquarters at the Ministry of Trade, Industry and Energy, and Minister of Commerce Wang Wentao (Minister) of China met at the APEC trade ministers’ meeting in Detroit, the United States, to discuss pending trade issues between the two countries. revealed

The two discussed issues such as the stability of the industrial chain and supply chain between the two countries, and the Ministry of Commerce of China said in a statement that “both sides agreed to strengthen dialogue and cooperation in the field of semiconductor industry and supply chain.”

According to China’s announcement, it is significant that such an agreement was reached through a high-level meeting between Korea and China at a time when the conflict between the US and China over the semiconductor supply chain is deepening after Chinese authorities recently imposed sanctions on US semiconductor companies.

On the 22nd, right after the G7 meeting, which adopted a joint statement with the main content of public containment led by the United States, the China Internet Security Appeal Office (CAC) made a ‘failure’ decision as a result of the security review of Micron products. It issued a ban on the purchase of Micron products by major information facilities in China.
yunhap news
In response, the US strongly protested and announced that it would respond to market distortion along with key allies and partners. Later, Mike Gallagher, chairman of the US-China Strategic Competition Special Committee (Republican Party), also pressured, saying, “South Korea, an ally that has directly experienced China’s economic coercion in recent years, must act to block (Micron’s) from filling the vacancy.” put in

Therefore, the Korean government, as well as semiconductor companies such as Samsung Electronics and SK Hynix, seem to be in a state of trembling as to which tune they should tune to.

In a situation where semiconductor exports are declining and the trade deficit continues for 14 months, regulations on US semiconductor companies are a good thing, but it is difficult to take advantage of this opportunity due to US pressure. However, it is difficult to simply reject the demand from China, the largest exporter of semiconductors, because the U.S. is paying attention.

In this situation, attention is focused on what the specific contents of the ‘Agreement to Strengthen Cooperation in the Semiconductor Supply Chain Field’, which came out at a high-level meeting in the field of trade between Korea and China, are being drawn. In particular, it is of utmost interest whether the agreement includes alternative supplies from Korean semiconductor companies due to Micron sanctions.

However, the press release of the Ministry of Trade, Industry and Energy related to this meeting contained content such as “Director Ahn requested interest and support from China for facilitating trade and stabilizing supply and demand of key raw materials and components.” There is also a point of view that the Chinese side only exaggerated the parts that were advantageous to them in that they were not included.

In fact, on the 22nd, Vice Minister Jang Young-jin of the Ministry of Trade, Industry and Energy said on the issue of alternative supply, “It is not something that the government can say (to companies), but it is a matter for companies to judge.” There is a drawn bar.