As former U.S. President Donald Trump appears likely to have the upper hand in the upcoming U.S. presidential election in November, there are concerns that the Korean semiconductor industry could face difficulties.
As the U.S.-China dispute intensified, the U.S. government increased the level of sanctions against foreign companies’ factories in China, but Samsung Electronics and SK Hynix were put on hold when they received an indefinite suspension of export controls in October last year. However, there is a possibility that this decision will be overturned.
According to the industry on the 24th, Bloomberg News recently reported that if former President Trump is re-elected, many of the measures taken by the Biden administration are likely to be overturned, including decisions regarding Samsung Electronics and SK Hynix’s factories in China.
In October last year, the Biden administration designated Samsung Electronics and SK Hynix’s semiconductor factories in China as ‘verified end users (VEUs)’ in accordance with U.S. export control regulations, making it a final decision that they can supply U.S. equipment in the future without separate licensing procedures or restrictions. I made a decision.
At the time, Samsung Electronics and SK Hynix welcomed this decision, saying, “Through close consultation between the two governments, much of the uncertainty regarding the operation of the Chinese production line has been resolved.”
However, there are concerns that uncertainty may increase again if former President Trump, who prioritized the development of domestic industries and had an angle with China, returns to power.
The Trump administration revised the Export Administration Regulations (EAR) in 2020 to strengthen regulations on semiconductors in China. The decision to block semiconductor transactions with China’s Huawei was also made at this time.
Former President Trump also made clear his country-first stance through a recent media interview, targeting Taiwanese foundry (semiconductor consignment manufacturing) company TSMC, saying, “Taiwan has taken away all of our semiconductor business.”
Currently, Samsung Electronics makes 40% of NAND flash at its plant in Xi’an, China, and SK Hynix makes 40% of DRAM and 20% of NAND at its plants in Wuxi and Dalian, China.
It is pointed out that the nature of the semiconductor process requires continuous equipment upgrades, and considering China’s share of the Korean semiconductor market, as the US-China dispute intensifies, sparks may fly to Korean companies.
An industry official said, “As the NAND recession continues, the deepening of the conflict between the U.S. and China could be adding insult to injury,” and expressed concern that “foreign companies with factories in China may continue to experience difficulties.”
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.