Access to the Chinese Market is elEasier for Korean Companies
The Financial Times reports that the issue of South Korea’s participation in the “Chip 4” alliance against China is almost a foregone conclusion, as major Korean chip manufacturers will not find arguments to resist the will of overseas partners, even taking into account the heavy dependence of the entire South Korean economy on the supply of semiconductor products to the United States – last year, this export direction accounted for almost 40% of South Korea’s revenue. Samsung Electronics and SK hynix have two large solid-state memory enterprises in China.
The steps that both companies have taken towards expanding their presence in the US already allow the authors of the publication to talk about their intentions to qualify for government subsidies. The latter, we recall, are provided on the terms of the recipient’s refusal to expand its production capacity in China for a period of ten years, if we are talking about technologies from 28 nm and thinner.
The problem for Korean chip makers is their heavy reliance on technology, software, and hardware from the US, Japan, and Europe. Without this technological base, Korean manufacturers will not be able to function as before, so they will have to participate in an alliance against China even if they threaten to lose some of this market. Former South Korean Trade Minister Yeo Han-koo made it clear that Korean suppliers will try to replace the Chinese market with something, but without American technology, they simply will not be able to continue to produce their products.