 |
| U.S. President Joe Biden speaks as he participates in the virtual CEO Summit on Semiconductor and Supply Chain Resilience from the Roosevelt Room at the White House in Washington, U.S., April 12, Reuters-Yonhap |
Sharing chip info to US may force Samsung to share it to China
By Kim Yoo-chul
The current semiconductor shortages have illustrated the strategic significance of semiconductor manufacturing. The central point of today's chip shortages is a classic supply-demand mismatch.
This means that demand for semiconductors is spiking while supply is fairly flat. As the construction of semiconductor factories costs billions of dollars, semiconductor shortages amid the continued pandemic have been directly impacting the "backbone industries" of the United States with many Wall Street investors forecasting supply-chain bottlenecks to continue throughout this year.
The United States, one of the top export markets for Korea, has been aggressively pushing chip-related policies mostly aimed at ensuring the country's sovereignty in semiconductor production through massive subsidies. The White House was offering to back billion-dollar programs in a bid to strengthen the long-term and a greater self-sufficiency of the U.S. semiconductor industry. Simply and precisely, this issue has become a political one. It's fair to say that the United States, China and even Europe are on a clear track to politicize tech supply chains.
The U.S. Department of Commerce asked America's "Big 3" automakers and key industry players operating there ― including Intel, TSMC, Apple, Samsung Electronics and GlobalFoundries ― to submit their key semiconductor management-related data such as inventory levels, production targets and revenue estimates according to clients and technology development roadmaps by Nov. 8 this year. The U.S. government stressed that the submission of the information should be voluntary.
 |
| Aerial view of a cargo ship being loaded with containers at the Port of Oakland on Oct. 14, in Oakland, Calif., the United States. AFP-Yonhap |
But Commerce Secretary Gina Raimondo warned industry executives recently that her team may invoke the Defense Production Act (DPA) or other available tools to force such required data into their hands. "What I told them is, 'I don't want to have to do anything compulsory but if they don't comply, then they'll leave me no choice'," she said.
No option but to consider 'China factor'
From Korea's standpoint, given the country's strengths in the chip sector, any decision to share such classified information with the United States will cause adverse results as China is equally important and comparable to the United States in terms of the significance of trade. Samsung and SK have invested more than $15 billion in semiconductor plants in China.
"Things are becoming very complicated. However, the primary focus is that Samsung Electronics is advised not to share its classified chip data with the U.S. government. If it does that, then Samsung will be situated to submit confidential data to Beijing regarding its semiconductor business. That's a scenario I don't want to think about. Again, this is more about a matter of national security and intellectual property," a high-ranking government official told The Korea Times, Sunday.
"Washington's request for Samsung to share classified information is totally unprecedented," said Ahn Ki-hyun, a senior executive at the Korea Semiconductor Industry Association (KSIA). Analysts and officials are not ruling out the possibility of handing over acquired data to Intel, which announced its entry into foundry-chip making with Washington's backing.
Samsung Electronics, the world's top memory chip manufacturer, has been operating a massive foundry chip-making plant for more than a decade in the U.S. state of Texas. The tech giant is set to announce the location of its new $17 billion plant, also likely to be in Texas, when Samsung chief Lee Jae-yong signs off on the deal, possibly next month.
China is Samsung Electronics' other key market. It operates several chip plants in the neighboring country with assistance from Beijing ― similar to the arrangement with the United States. China has been massively boosting its investment in semiconductor capabilities.
Samsung, in this regard, has become sandwiched on multiple fronts between the United States and China.
"Samsung can't handle this issue alone as it is too big for a private company to handle. The South Korean government needs to ask the White House and U.S. commerce department to minimize the scope of information that Samsung must share. Or Samsung Electronics and the government will need to lobby U.S. politicians on the points that it is already the top-tier foreign direct investor in the United States with large scale local employment and that it will remain as the most-trusted business partner there. The same appealing points could be applied when Samsung deals with China," a senior industry executive said by telephone.
South Korea's top trade negotiator Yeo Han-koo voiced the country's uneasiness regarding Washington's request to share chip data and Finance Minister Hong Nam-ki said he also relayed Korean chipmakers' concerns about Washington's request to U.S. Treasury Secretary Janet Yellen.
On a related note, President Moon Jae-in, whose single, five-year term ends in March of next year, is still hoping to hold a summit with North Korean leader Kim Jong-un before or after the Winter Olympics in Beijing. Moon earlier suggested his idea of declaring an official end to the Korean War and if his last-minute pitches for a direct encounter with the North Korean leader is realized, the prerequisites will include gaining support from China and the United States.
The global semiconductor industry is following its typical cycle with overcapacity forecasted for 2023. This trend will threaten the bottom lines of major chipmakers, raising the possibility that some cash-intensive investment plans will have to be scaled back.
![[INTERVIEW] 'Money Heist: Korea' writer feels satisfied to expand series' franchise](https://img.koreatimes.co.kr/upload/thumbnailV2/e264f8d5589442489d72f9494ca3f1c7.jpg/dims/resize/178/optimize)
