S. Korea considers taking part in Chip 4 alliance

기사입력 : 2022-08-09 09:48

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President Yoon Seok-yeol and U.S. President Biden. Photo=NEWSIS
President Yoon Seok-yeol and U.S. President Biden. Photo=NEWSIS
As South Korean government is considering participating in Chip 4 alliance, the U.S.-led semiconductor supply chain cooperation, attention is being paid to what decision the government will make.

Regarding the participation in the Chip 4, President Yoon Suk-yeol said on the 8th, “The government will carefully discuss with related ministries and protect our national interests.”

The government has decided to participate in the Chip 4 preliminary meeting, involving South Korea, the U.S., Japan and Taiwan, but it will keep approaching carefully in consideration of China’s protest.

In order to secure semiconductor super-gap technology, it is necessary to join the Chip 4 alliance, but at the same time, the government should set up cooperative strategies with China, analysts said.

The Chip 4 is a semiconductor supply chain alliance proposed by the U.S. government to Korea, Japan, and Taiwan in March.

The U.S. fabless companies such as Qualcomm and NVIDIA dominate the global market, and Korea’s Samsung Electronics and Taiwan’s TSMC are competing for the No. 1 position in global foundry market.

Japan is leading the global semiconductor material market.

The Chip 4 was proposed to counter China’s influence in chip supply chain by strengthening semiconductor cooperation between Korea, the U.S., Japan and Taiwan.

The government has reportedly expressed its intent to join in the Chip 4 preliminary meeting to the U.S.

The preliminary meeting, which is expected to be held at late August or early September, is expected to focus on setting the detailed agenda and define the scope of participation.

The deadline for the decision to join Chip 4 was reportedly at the end of this month, but the Korean government said the deadline has not been set.

An official from the Industry Ministry said, “There is no specific deadline for decision, and the government will not clearly confirm until the end of August.”

Considering that the U.S. is the world’s largest semiconductor powerhouse, South Korea is highly likely to join the Chip 4 alliance. It is difficult to reject the U.S. proposal to cooperate with Japan and Taiwan to secure semiconductor super-gap technology, analysts said.

In addition, there are some opinions that it is necessary to join the Chip 4 in to participate in the stable semiconductor supply chain cooperation and secure standards and technology assets.

Rep. Ahn Cheol-Soo of the People Power Party noted on his Facebook on the 4th, saying, “We should consider carefully and objectively the size of the national interest loss when we refuse to join Chip 4. For now, the government should accept the proposal of the U.S. while focusing on preparing for measures to reduce side effects.”

The Korean government is still carefully approaching the Chip 4 alliance as China strongly resists.

The U.S. is the world’s No.1 country in chip design, but China is Korea’s largest chip importer.

China continues to convey its opposition, saying that Chip 4 is intended to counter China’s influence in the semiconductor supply chain.

Zhao Lijian, Chinese Foreign Ministry spokesman, said at a regular briefing on July 26, “Promoting openness and cooperation of industrial and supply chains and preventing fragmentation are in the interest of all relevant parties and the whole world. China opposes moves to forcibly push for industrial relocation and decoupling, undermine international trade rules and split the global market.”

Then he presented figures of increased trade volume between Korea and China.

There are also concerns that if the U.S. bans exports of key AI chip design and manufacturing software to China, it may affect Korea’s exports to China.

Korean semiconductor experts said it is inevitable to join in Chip 4, but recommended to set up strategies to cooperate with China.

Lee Jong-hwan, a professor of Department of System Semiconductor Engineering at Sangmyung University, said, “If China retaliates by restricting exports of semiconductor raw materials, it will directly hit the domestic semiconductor industry. The government should set up strategies to appease China.”

“However, the participation of Chip 4 is expected to strengthen chip technology cooperation with major countries and expand global customers,” he added. “While joining in Chip 4, the government should find ways to minimize China’s opposition.”

Park Jae-geun, a professor of Convergence in Electronics at Hanyang University, said “South Korea should join Chip 4 after Taiwan,” and recommended to avoid taking the lead in joining Chip 4.

“The government needs to get a guarantee that we will stably receive semiconductor equipment and materials from the U.S. and Japan after the participation in the Chip 4 alliance,” He added. “It should strongly insist that we cannot join the Chip 4 unless the U.S. promises the stable production at Chinese factories.”

Cho Joong-hwi, a professor of Embedded-Systems Engineering at Incheon University, said, “From a long-term perspective, we should also discuss ways to secure competitiveness in materials, parts, and equipment fields and exchange human resources for semiconductor industries.”

Korean chip makers such as Samsung Electronics and SK Hynix have not officially expressed their opinions on participating in the Chip 4.

An industry official said, “As both Samsung Electronics and SK Hynix have chip plants in China, it is cautious to participate in Chip 4. We are closely watching the situation because there are no details confirmed yet.”

By Global Economic Reporter Myeong-seok Chae ; Translate by Gounee Yang