Korean companies likely to be affected
The hegemonic conflict between the United States and China over the supply chain of semiconductors and key minerals is intensifying. When the United States, which has been regulating the export of state-of-the-art semiconductors to China since October of last year, announced on the 21st (local time) its intention to regulate even low-cost general-purpose semiconductors made in China, China also ‘fought back’ by saying it would ban the export of processing technology for rare earth elements, a strategic material. I put it. Korean semiconductor companies operating in both the U.S. and China also seem unable to avoid the fallout in any way.
The U.S. Department of Commerce said on this day, “Starting next month, we will begin a survey to determine how U.S. companies are procuring general-purpose semiconductors,” targeting about 100 companies in high-tech industries such as automobiles, aerospace, and defense, and asked about their general-purpose semiconductors. He announced that he would check the supply and demand situation. Secretary of Commerce Gina Lermondo also said, “We have seen worrisome signs that China is expanding its own companies’ production of commodity semiconductors, preventing US companies from competing in the market,” and added, “We have seen foreign governments’ threats to the US commodity semiconductor supply chain.” “Countering (non-market) behavior is a matter of national security,” he emphasized.
China increased its market share by focusing on the older general-purpose semiconductor market as the U.S.’s advanced semiconductor regulations blocked the way to enter the market. Accordingly, a Biden administration official also told Bloomberg News that U.S. sanctions on general-purpose semiconductors “may include tariffs or other trade measures.” This can be interpreted as an attempt to reduce dependence on China by significantly raising tariffs on Chinese general-purpose semiconductors imported by U.S. companies.
On the same day, China’s Ministry of Commerce and Ministry of Science and Technology announced a revised version of the ‘China Export Prohibition and Restriction List’, which includes restrictions on the export of manufacturing and refining technologies such as high-performance magnets using rare earth elements. Reuters predicted that this measure would have a significant impact on the supply and smelting of rare earth elements, especially those used in electric vehicles, medical devices, and weapons.
There is an analysis that when the survey on the status of general-purpose semiconductors in the U.S. begins, there is a high possibility that Korean companies that have entered the U.S. market will also be included in the target. An official from the Ministry of Trade, Industry and Energy said, “No specific investigation scope or plan has been announced yet, but we will cooperate with the U.S. government considering the impact on our companies.”
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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.