US export ban on China-bound HBM likely to have mixed impact on Korean chip industry: experts

A Samsung banner stands alongside a Korean flag at the company's building in Seoul in this undated photo. Korea Times file

The U.S. government's latest restrictions on exports of artificial intelligence (AI) memory chips may benefit Korean chipmakers in the long-run by slowing down China's semiconductor development, but they may also reduce potential demand in the world's most populous market, experts said Tuesday.

The U.S. Commerce Department announced a set of new semiconductor controls on Monday (U.S. time), including a sales ban on high bandwidth memory (HBM) chips, a key component for AI accelerators, and an embargo on chipmaking equipment.

The HBM restrictions target second-generation HBM2 chips and more advanced products exported to China.

Korea's SK hynix and Samsung Electronics, together U.S.-based Micron Technology, currently lead the HBM market, where the latest fifth-generation HBM3E was introduced earlier this year.

Insiders anticipate a limited short-term impact on SK hynix and Samsung Electronics due to their low dependence on the Chinese market.

In the long term, some experts here anticipate that the U.S. restrictions will slow China's semiconductor advancements, creating opportunities for Korea.

"Chinese chipmakers have been growing rapidly in terms of technology with one of the world's biggest markets," said Kim Hyeong-joon, head of the Next Generation Intelligence Semiconductor Foundation.

"The U.S. measures will effectively delay China's development of semiconductors and help Korean companies widen the gap with Chinese rivals."

Prof. Kwon Hyuk-jun of the semiconductor engineering department at Daegu Gyeongbuk Institute of Science and Technology said the U.S. embargo will weigh heavily on China's strength in AI software and low-powered AI accelerators, where HBM plays a critical role.

"China may attempt to develop its own HBM chips, but replacing imported products will be challenging under the U.S. restrictions," he said. "The U.S. containment policy will be beneficial to Korea."

Despite these potential benefits, experts expressed concerns about China's role as a major buyer of memory chips and chipmaking equipment.

"China is one of the largest markets for HBM products," said Kim, the head of the semiconductor foundation. "The embargo may become less desirable as the market contracts in the future."

Prof. Kwon also warned of an over-reliance on the U.S. market.

"As the global market shrinks due to restrictions on sales in China, Korean companies must diversify their client base," he said. (Yonhap)