South Korean Work Hand in Glove with U.S. in Semiconductor Industries

At present, the South Korean government has designated 150 major strategic technologies related to materials, parts and equipment in 7 industries including semiconductors, displays, and automobiles to provide strong support for their development. The list will also be expanded to include 50 additional items in the fields of aerospace, defense and hydrogen, according to South Korea's Ministry of Trade, Industry and Energy.

 

South Korea plays an important role in global semiconductor supply chains. While Europe and Japan play crucial roles in the manufacture of equipment and chemicals needed for semiconductor production, South Korea is a key end producer of semiconductors, including some of the world’ s most advanced chips.

 

In a joint statement, the U.S. and South Korea agreed to continue discussions on the requirements and opportunities of the Chip Act to minimize uncertainty about corporate investment and business burdens. In addition, the two sides are cooperating on chip export control, hoping to protect national security while minimizing disruption to the global semiconductor supply chain and maintaining the vitality of the semiconductor industry.

 

Though South Korea’ s commitment to working with the United States on semiconductors, the country has concerns about U.S. policy and its implications for the domestic semiconductor industry and South Korean firms’ operations more broadly. These firms are important for the domestic economy, which is highly dependent on trade. Exports account for 42% of GDP, and semiconductors are South Korea’ s largest export item, accounting for nearly 18.9% of total exports in 2022.

 

While South Korean companies continue to raise concerns over the CHIPS ACT, there have not been any concrete or explicit measures taken by South Korean companies other than Samsung and SK Hynix receiving a one-year waiver from the export control. However, it is also true that these companies continue to show concern on the matter of both enactments, leading to the need for the South Korean government to continue to engage with the United States and strengthen the domestic semiconductor industry.