China bans US micron semiconductor purchases
Items that can be replaced with Korean products
U.S. pressure to join Chinese regulations growing
The Korean semiconductor industry is ignited as the U.S. and China head-on over the Chinese authorities’ first imposition of sanctions against a U.S. semiconductor company.
The U.S. Department of Commerce issued a statement on the 21st (local time) and said it “resolutely opposes” the Chinese authorities’ ban on buying Micron semiconductors from the U.S. “The U.S. will continue to work with its allies to prevent chaos in the semiconductor industry.” revealed The US administration of Joe Biden requested that domestic semiconductor companies such as Samsung Electronics and SK Hynix refrain from expanding memory semiconductor sales in China if China imposes a ban on Micron semiconductor purchases prior to the Korea-US summit last month.
Regarding this, Chinese Foreign Ministry spokesman Mao Ning criticized it at a regular briefing on the 22nd, saying, “Restricting Chinese exports by threatening other countries is a serious violation of the principles of market economy and international economic trade rules.” “This is entirely to protect the hegemonic interests of the United States,” he added. “We resolutely oppose this practice.”
On the 21st, Chinese authorities said that Micron’s products “have serious network security problems” and that “operators of important information infrastructure in China should stop purchasing Micron products.” Micron, the largest memory company in the US and the third largest in the world, occupies 14.5% (3rd) of the Chinese DRAM market and 4.6% (6th) of the NAND flash market as of last year. Most of them are general-purpose products and can be easily replaced with products from Samsung Electronics or SK Hynix.
Following the head-on collision between the US and China, the US pressure on South Korea to participate in semiconductor regulation is expected to intensify. US Ambassador to Korea Philip Goldberg also replied in an exclusive interview with the Dong-A Ilbo that same day, “If the sanctions become a reality, we will discuss the same topic with our allies, including South Korea, as we discuss with other countries.”
Substitutable Micron Products Regulated
Analysis of the ‘disking’ card for the US
When China imposed a sales ban on Micron, the largest memory semiconductor company in the United States, on the 21st, the US Commerce Department immediately issued a statement on the same day and refuted that it was a “groundless measure.” In effect, it was defined as China’s economic retaliation. In particular, there are various interpretations of China’s targeting of an attack on a representative US semiconductor company at a time when the US-China high-level dialogue is about to be restored.
“This action, taken along with recent raids and targeted investigations of other U.S. companies, contradicts China’s assertion that it is committed to open markets and transparent regulation,” the U.S. Commerce Department said in a statement. Previously, China raided the Beijing office of Mintz Group, a real-time company headquartered in New York last month, and arrested five Chinese nationals. The Shanghai office of Bain & Company, a famous US consulting firm, did something similar. This means that China’s sanctions on Micron are seen as de facto retaliatory measures that were carried out as an extension of such a surprise investigation.
Some observe that China may have tried to use the partial sales ban on Micron as leverage in negotiations ahead of the resumption of high-level talks with the United States.
US President Joe Biden said in a press conference after the G7 summit that day, “Relations with China will soon begin to thaw.” U.S. Commerce Secretary Gina Lamondo, who is in charge of semiconductor regulation, plans to visit China soon, along with U.S. Trade Representative Catherine Tai. Lamondo said the reason for his recent visit to China was “to stabilize the business environment for US companies in China.”
While the US is moving to strengthen regulations on semiconductor exports to China, there is also an analysis that China has started de-risking the US. This means that it is trying to minimize future damage by stopping sales of Micron products that can be replaced with products from Korean or Chinese companies before the US export restrictions are further strengthened.
Graham Webster, a researcher at Stanford University, diagnosed with the New York Times (NYT), “China may have tried to derisk by reducing its dependence on American semiconductors in response to additional US semiconductor regulations.”
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Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.