The Impact of US Semiconductor Interventions on Asian Allies
Introduction
The global semiconductor industry has been facing significant disruptions due to Washington’s interventions and efforts to include Asian allies in its economic security agenda. Recently, an influential South Korean lawmaker, Yang Hyang-ja, criticized the United States’ measures to curb China’s access to advanced chips. This article explores the concerns raised by Asian allies and delves into the potential consequences of these interventions.
The Criticism from Seoul
Yang Hyang-ja, a former chip engineer and Samsung executive, expressed concerns about the impact of US interventions on the semiconductor industry. As the former chair of a ruling party committee on South Korea’s semiconductor competitiveness, Yang emphasized that measures targeting China’s chip industry risk damaging relations with Asian allies. He criticized the unpredictability of US policies and urged the United States to consider the common values of humanity instead of using its strength as a weapon.
The United States has implemented legislation offering subsidies to non-Chinese chip makers to boost domestic semiconductor production. However, these subsidies come with limitations on their ability to upgrade or expand facilities in China. The Biden administration has also imposed export controls on China’s access to critical chip-making tools and barred US citizens and companies from supporting Chinese companies involved in advanced chip manufacturing.
Fears of Backlash and Disruption
There are concerns in Seoul that these US measures will provoke a backlash from Beijing, leading to disruptions in finely tuned supply chains and threatening profitability. Lee Jae-myung, the leader of South Korea’s Democratic Party, accused the conservative government of harming the country’s economic and security interests by aligning too closely with the United States and Japan against China and Russia.
Yang acknowledged that the US measures had not yet negatively impacted South Korea’s semiconductor industry. In fact, he argued that sanctions against China could reduce production and lead to higher prices, benefitting South Korean chipmakers. However, he warned that as the US intensifies sanctions against China, it could push China to make rapid technological advances and invest more in domestic support. This, in turn, could put South Korea in a crisis situation due to China’s abundance of talent and raw materials.
Yang criticized the US approach of trying to achieve its goals by disrupting the global value chain. He argued that the United States should abandon this approach and recognize the expertise of South Korean and Taiwanese chip manufacturers. Many analysts believe that by hindering the progress of Chinese competitors, the US measures have inadvertently helped South Korean chipmakers.
The Rise of Chinese Competitors
While the US interventions have provided South Korea with time to develop its own technologies, the country’s semiconductor industry is still in a precarious situation. The biggest long-term threat to South Korea’s industry comes from state-backed Chinese rivals, such as YMTC, that have made significant progress in bridging the technology gap with leading Korean chip makers in the Nand flash memory sector.
An episode involving US tech giant Apple and YMTC exemplifies the progress made by Chinese competitors in the NAND memory industry. Apple was considering using YMTC’s Nand flash memory chips for the current iPhone 14 until political pressure from US lawmakers forced them to abandon the option. This incident highlights both the Chinese advancements and the benefits Korean companies have gained from US intervention.
US export controls have also prevented a renowned South Korean semiconductor expert from building a “copycat” memory chip plant in China. Korean prosecutors claimed that such a plant would have caused irreparable damage to the Korean semiconductor industry.
The Neglect of Engineering Talent
Yang highlighted another issue affecting South Korea’s semiconductor industry – the neglect of engineering talent. He compared the treatment of technicians in South Korea and Taiwan, stating that technicians are treated better than lawyers and judges in Taiwan but are not treated well in Korea. This disparity in treatment discourages smart Korean students from pursuing careers in engineering and instead pushes them towards professions like medicine.
Yang believes that technology is the key to overcoming geopolitical problems. He called for better recognition and treatment of engineering talent in Korea, as well as the development of cutting-edge technologies to boost the semiconductor industry and secure the country’s economic and security interests.
Conclusion
The US interventions in the global semiconductor industry have raised concerns among Asian allies, particularly in South Korea. While the measures have provided temporary benefits for South Korean chipmakers, there are long-term risks associated with the rise of state-backed Chinese rivals. It remains to be seen how the semiconductor industry landscape will evolve and how Asian allies will navigate the complexities of US-China tensions in this critical sector.
Summary
In Seoul, concerns have been raised about Washington’s interventions in the global semiconductor industry and its impact on Asian allies. Yang Hyang-ja, a former chip engineer and Samsung executive, criticized the United States’ efforts to curb China’s access to advanced chips, warning that such measures could damage relations with Asian allies. South Korean analysts fear that the US measures could provoke a backlash from Beijing, disrupting supply chains and threatening profitability. However, some argue that the US interventions have inadvertently helped South Korean chipmakers by hindering the progress of Chinese competitors. The rise of state-backed Chinese rivals remains a long-term threat to South Korea’s semiconductor industry. Yang also highlighted the neglect of engineering talent in South Korea and called for better recognition and treatment of technicians to support the industry’s growth and secure the country’s economic and security interests.
—————————————————-
| Article | Link |
|---|---|
| UK Artful Impressions | Premiere Etsy Store |
| Sponsored Content | View |
| 90’s Rock Band Review | View |
| Ted Lasso’s MacBook Guide | View |
| Nature’s Secret to More Energy | View |
| Ancient Recipe for Weight Loss | View |
| MacBook Air i3 vs i5 | View |
| You Need a VPN in 2023 – Liberty Shield | View |
Receive free semiconductor updates
We will send you a myFT daily digest email rounding last Semiconductors news every morning.
An influential South Korean lawmaker has sharply criticized Washington’s interventions in the global semiconductor industry, signaling concern in Seoul over US efforts to include Asian allies in its economic security agenda.
Yang Hyang-ja, a former chip engineer and Samsung executive who chaired a ruling party committee on South Korea’s semiconductor competitiveness until earlier this year, said measures to curb Chinathe ability to access or produce advanced chips risked damaging relations with its Asian allies.
“Self [Washington] keep trying to punish other nations and pass laws and implement ‘America First’ policies in an unpredictable way, other countries may form an alliance against the United States,” Yang told the Financial Times in an interview.
“The United States is the strongest nation in the world,” he added. “It should give more consideration to the common values of humanity. Appearing to use his strength as a weapon is undesirable.
The United States has passed legislation offering tens of billions of dollars in subsidies to non-Chinese chip makers to boost U.S. semiconductor production, in exchange for limitations on their ability to upgrade or expand their facilities in China.
The Biden administration has also imposed sweeping export controls on China on critical chip-making tools and barred US citizens and companies from offering direct or indirect support to Chinese companies involved in advanced chip manufacturing.
But there are fears in Seoul that the US measures will prompt a backlash from Beijing, disrupting finely tuned supply chains and threatening profits.
Lee Jae-myung, the leader of South KoreaThe Democratic Party, in left-wing opposition, has accused the conservative government of harming the country’s economic and security interests by siding too closely with the United States and Japan against China and Russia.
Yang, a former Democratic Party member who formed his own technocratic party, Hope of Korea, in June acknowledged that “US tech warfare measures are not yet hurting our semiconductor industry because sanctions against China could actually reduce production, leading to higher prices”.
But he added: “The more the US sanctions China, the more China will try to make rapid technological advances. China will provide more domestic support for the goal. So it will put South Korea in crisis, given China’s abundance of talent and raw materials.”
“The United States should abandon its current approach of trying to achieve something by shaking up and breaking the global value chain,” he said.
Yang added that the US benefited from South Korean and Taiwanese expertise in manufacturing memory and processor chips, respectively, saying it was “trying to demolish the status quo through sanctions.”
Many analysts said the US measures actually helped South Korean chipmakers by hindering the progress of their Chinese competitors.
The biggest long-term threat to South Korea’s semiconductor industry, they said, was not supply chain disruption but the rise of state-backed Chinese rivals like YMTC, which has made rapid progress in bridging the technology gap with leading Korean chip makers in the Nand flash memory sector.
Troy Stangarone, senior director of the Korea Economic Institute of America, notes that US tech giant Apple had been considering using YMTC’s Nand flash memory chips for the current iPhone 14, until political pressure from US lawmakers forced to abandon the option.
“The Apple-YMTC episode demonstrated both how far the Chinese have come in the NAND memory industry and how Korean companies benefited from the US intervention,” Stangarone said.
The FT has too reported that US export controls have helped thwart an alleged attempt by a renowned South Korean semiconductor expert to build a “copycat” memory chip plant in China. According to Korean prosecutors, the plant “would have caused irreparable damage to the [Korean] semiconductor industry”.
Yang admitted the US-China tech war had bought South Korea time to develop its own technologies, but added that the country’s semiconductor industry was in a “very precarious situation.”
The lawmaker, who was instrumental in passing the K-Chips Act this year to boost tax credits for companies investing in chip manufacturing in South Korea, said the country faces what it described as a neglect of one’s engineering talent.
“In Taiwan, technicians are treated better than lawyers and judges. But they are not treated well in Korea,” said Yang, who is also a member of a cross-party committee on cutting-edge technologies.
“Smart Korean students want to become doctors, dentists or oriental medicine practitioners rather than become engineers,” he said. “Only technology can free us from all these geopolitical problems.”
—————————————————-