South Korean President Yoon Suk-yeol (L) and U.S. President Joe Biden (R) inspect a Samsung Electronics chip plant in Pyeongtaek, some 70 kilometers south of Seoul, on May 20, 2022. (Yonhap)
SEOUL, Sept. 1 (Korea Bizwire) — South Korea’s chip industry, heavily dependent on China for production and exports, faces a dilemma due to the United States government’s policy of promoting sanctions against Beijing, a report showed Thursday.
The global chip supply network is projected to undergo reorganization between 2025 and 2030, aligning with the anticipated impact of the U.S. CHIPS and Science Act and the European Union’s European Chips Act, according to a report issued by the Korea International Trade Association (KITA).
In the case of South Korea, Samsung Electronics Co. and SK hynix Inc. plan to invest 217.1 billion won (US$164 million) and 15 billion won, respectively, in semiconductor facilities in the U.S. over the next decade.
The challenge lies in meeting stringent criteria, including restrictions on investments in China, the redemption of excess profits, and the submission of sensitive information to qualify for semiconductor subsidies from the U.S.
From a medium- and long-term perspective, these companies might also face pressure from the U.S. to reduce connections with China, which could potentially impose a greater burden.
Choosing not to receive U.S. subsidies could lead to isolation from the global semiconductor alliance led by Washington. Given these factors, companies find it challenging to make a decision.
“Significantly expanding semiconductor facilities in major countries makes acquiring core talent and maintaining a stable workforce critical tasks for businesses,” said Lee Jung-ah, a senior researcher at KITA and co-author of the report.
“Both the government and the chip industry should spare no effort in investing to nurture talent.”
J. S. Shin (js_shin@koreabizwire.com)
