Two of Korea’s major chip companies, Samsung Electronic and SK Hynix, want to put the breaks on the US CHIPS and Science Act. The US has frustrated semiconductor companies by unilaterally imposing sanctions on the sale of technology into China, mostly as a protectionist measure to stop what the US believes is in its national security interests.
While there are clear reasons for the US to be concerned about China’s access to technologies that could be used against it, it has also created uncertainties for semiconductor companies long used to working in China.
The US has previously granted a waiver to Korean companies for a temporary period so that they could continue to sell chip making equipment to the Chinese. Both Samsung and SK Hynix have billions of dollars in investment planned for the chip making operations in the US over the next decade, plus those lovely tax breaks. In what is essentially a trade war between the US and China, Korean manufacturers stand to lose big time because 20% of their exports come from chips, and China is a big buyer of those chips.
According to data from the Ministry of Trade, Industry and Energy, Korea’s chip exports reached $6 billion in January, down 44.5 percent from the same period a year ago, due to weak demand from China. Chip exports to China fell 35.6 percent in November last year, 36.8 percent in December and 46.6 percent in January.
Pulse
