( Observer Network ) According to reports from the Asian Daily, Seoul Economy and other Korean media, the US government recently proposed to form a "Chip4 Alliance" (Chip4) to the locations of three major chip manufacturers in South Korea, Japan and Taiwan, China, to restrain the rising mainland China and "form a surround of mainland China in the global supply chain."
However, South Korean media pointed out that South Korea may find it difficult to accept the US proposal. China and South Korea cooperate closely on semiconductors. Mainland China is the world's largest semiconductor market that cannot be ignored. South Korean semiconductor companies have also built core production bases in mainland China.
Screenshot of "Seoul Economy" report
South Korean economic media "Seoul Economy" reported on the 27th according to industry and government reports that the US government recently proposed to the South Korean government and major semiconductor companies to form a "Chip 4" alliance (Chip 4) and also sent invitations to Japan and Taiwan.
However, Seoul Economy also points out that from the perspective of the South Korean government and enterprises, the possibility of accepting the proposal from the US government is limited. Lee Zonghao, director of the Semiconductor Co-Research Institute of Semiconductors at Seoul University, pointed out that because Korean semiconductor giants , Samsung , SK Hynix and others have too much business in China, it may be difficult to accept the proposals of the US government, and the government and enterprises need to communicate closely.
Asia Daily also pointed out that the South Korean government and companies may find it difficult to agree to the US proposal.
Asia Daily said that the "Chip 4 Alliance" proposed by the United States will put a heavy burden on the South Korean government and semiconductor companies. Mainland China is the world's largest semiconductor market that cannot be ignored, and Korean semiconductor companies have also built core production bases in mainland China. Data from IBS, a market research agency, shows that mainland China contributed more than half of the global semiconductor market sales, reaching US$299.1 billion. Electronic products assembled and manufactured by mainland China, known as the "world factory", are spread all over the world.
Samsung Electronics and SK Hynix both have factories in mainland China. Samsung has the only overseas production base for memory chips in Xi'an, Shaanxi Province, mainly producing Samsung flash memory (Nand Flash) chips. The 12-inch wafer moon production capacity has reached 265,000 , accounting for 42% of Samsung's overall production and 10% of the global flash memory market output.
Samsung's production base in Xi'an. Photo from Korean media
SK Hynix has built an DRAM chip factory in Wuxi, Jiangsu Province, with a monthly output of 170,000 12-inch wafers, accounting for 47% of SK Hynix's overall DRAM production. At present, the M8 project created by SK Hynix in Wuxi is under construction. M8 is an 8-inch wafer project, mainly involving foundry manufacturing and sales businesses such as camera circuits (CIS), drive circuits (DDI), power management integrated circuits (PMIC). Last year, it acquired the Intel factory in Dalian City, Liaoning Province, which has a great momentum to increase its business in China.
South Korean financial website "econovill" said that according to data released by the Federation of South Korea Industry (FKI) in January, as of 2020, in the production of semiconductor , South Korea's dependence on materials provided by China was as high as 39.5%, its dependence on Japan was 18.3%, and the dependence on the United States was 6.3%. From the perspective of semiconductor exports, 39.3% of South Korea's total foreign exports were exported to China, which shows how high South Korean semiconductor dependence on China.
According to market research firm Omdia's forecast in January this year, the mainland Chinese semiconductor market will grow by an average of 8.3% from 2020 to 2025. Relevant personnel in the semiconductor industry predict that the market position of mainland China, which occupies half of the global semiconductor market, will not change significantly in the future. With the popularity of 5G mobile phones and the expansion of data center investment, mainland China will vigorously lead the growth of demand in the semiconductor market.
Therefore, the Asia Daily said that in this context, if South Korea joins the "chip four-party alliance" proposed by the United States, it will surely arouse China's dissatisfaction. Mainland China is the main market, and South Korea must adopt a cautious attitude.
Since last year, the United States has put pressure on Samsung and other Korean semiconductor companies many times in the name of "stabilizing chip supply chain". On November 8 last year, Samsung Electronics had to "voluntarily" submit company information, including sensitive information, etc., to the US government, to "help" the United States clear the semiconductor supply chain. On November 23 last year, under the coercion and temptation of the United States, Samsung finalized its plan to build a second factory in the United States.
Korean media "Seoul Economy" pointed out that South Korea is in a period of alternating new and old governments, and the future government's response is very important. Park Jae-gun, president of the South Korean Semiconductor and Display Technology Society, pointed out that the new South Korean government is about to take office and should act as a control tower to coordinate and solve the problems encountered in the development of the chip industry.
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