SEOUL, Sept. 22 (Korea Bizwire) — South Korea’s Industry Minister Bang Moon-kyu met with U.S. Deputy Secretary of Commerce Don Graves in Seoul on Friday and asked for addressing concerns among domestic chipmakers regarding Washington’s semiconductor export controls on China, his office said.
In October last year, the U.S. announced a set of rules that restrict exports of certain advanced semiconductor manufacturing equipment and items to companies in China in an apparent bid to slow Beijing’s technological advances.
The move sparked concerns about the disruption of businesses by Samsung Electronics Co. and SK hynix Inc. in China, as the South Korean chip giants rely on U.S. equipment for part of their production there.
They received a one-year waiver, which is to expire next month.
During the meeting, Bang stressed the need for the two countries to enhance ties on the semiconductor industry and asked for the U.S.’ active cooperation on addressing the export control issues and the guardrails of the U.S. Chips Act, according to the Ministry of Trade, Industry and Energy.
The act requires foreign chipmakers to make major concessions, such as submitting data on their cash flows and profitability, in exchange for receiving subsidies.
Graves told Yonhap News Agency on Thursday that his government understands the concerns and Washington “will do everything” to ensure that South Korean firms are able to continue their legitimate business.
Bang also called for continued close consultation between the two nations on the U.S. Inflation Reduction Act (IRA) amid lingering uncertainties.
The IRA offers tax credits of up to US$7,500 to each buyer of a new electric vehicle only assembled in North America. It also requires EV batteries to be made with a certain portion of minerals mined or processed in the U.S. or countries or regions that have free trade agreements with Washington.
South Korea calls for detailed guidance on “foreign entities of concern” rules, or FEOC, that exclude battery manufacturers from China and other nations of concern from incentives under the IRA, among other issues.
Trade Minister Ahn Duk-geun held separate talks with Graves on Thursday on pending trade issues, including export curbs, the IRA, and the Indo-Pacific Economic Framework, the ministry said.