On July 21, South Korea announced an ambitious "semiconductor superpower strategy" that plans to guide companies to complete 340 trillion won investment in semiconductors by 2026.

Source: Global Times

[ Global Times Special correspondent in South Korea Zhang Jing Global Times report Reporter Ni Hao] On July 21, South Korea announced an ambitious "semiconductor super power strategy", planning to guide companies to complete 340 trillion won (approximately 1.75 trillion yuan) in semiconductors by 2026. However, compared with the grand strategic plan, the most important task of the South Korean chip industry is to respond to the United States' "ultimatum" - the United States unilaterally set a deadline for South Korea to join the "Chip Quadruple Alliance" on August 31. After visiting South Korea on the 319th, U.S. Treasury Secretary Yellen html made a high-profile publicity for the deepening of cooperation between the United States and South Korea on "supply chain security", which is considered to be a further "breath of" to South Korea. South Korea's Asia Daily said that Japan and Taiwan are currently very active in participating in the alliance, but South Korea still needs to "think about it again." Data shows that exports to China account for 60% of South Korea's overall chip export scale, and for the South Korean chip industry, it is almost impossible for the Chinese market to give up. Many parties are keeping a close eye on what choice South Korea will make in the face of the US "ultimatum".

aims at " semiconductor super power"

21, the South Korean government announced a semiconductor industry development support plan, focusing on cultivating talents and realizing semiconductor material self-sufficiency. Lee Changyang, Minister of Industry, Trade and Resources, announced the "Semiconductor Super Power Strategy" on the same day. In order to encourage relevant companies to complete 340 trillion won semiconductor industry investment in the next five years, the South Korean government will provide financial support for the infrastructure required by the semiconductor park, and will also expand tax incentives for semiconductor equipment investment and research and development, increasing the tax deduction rate of equipment investment by large enterprises for national strategic technologies to 8% to 12%.

In terms of talent training, South Korea plans to strive to train 150,000 semiconductor professional talents by 2031. In addition, the South Korean government will focus on supporting the research and development of next-generation system chips, and increase the self-sufficiency rate of semiconductor materials, parts and equipment from the current 30% to 50%.

According to Reuters html on the 321st, semiconductors have become South Korea's largest export product for nine consecutive years, and semiconductors account for about 1/5 of South Korea's total exports in 2021. Currently, South Korea has the world's largest memory chip manufacturers, Samsung and SK Hynix .

As the semiconductor industry deepens its trade proportion in South Korea, with the increasingly fierce global semiconductor competition, South Korea is more eager to become the "leader" of the semiconductor industry, while seizing the technological highland, seeking resource independence and stability of the supply chain. Samsung Electronics announced at the end of June that it was the first in the world to realize the 3nm process process production chips, and it is scheduled to be shipped on July 25, one step ahead of its old rival TSMC.

According to South Korea's " Asian Economy " report on the 20th, U.S. Treasury Secretary Yellen delivered a speech while visiting the LG Chemistry R&D Park in Seoul on the 19th, saying that the United States and allies should implement the "friendly strait outsourcing" strategy. The strategy aims to limit the production and trade of major U.S. goods to "trusted countries." In his speech, Yellen said that South Korea has been increasing its investment in the United States in the fields of batteries and semiconductors, and the United States will continue to work closely with South Korea to establish a flexible supply chain.

LG Chemistry is the only company that Yellen visited during his visit to South Korea. South Korea's "Joint Ilbo" reported on the 20th that Yellen's visit to LG Chemistry was not accidental. The LG Chemistry R&D park he visited gathered a new generation of anode materials and separators and other future battery material research facilities. LG Chem is recently considering building new factories in the United States, etc., after the company has set up factories in Ohio and other places in the United States through its battery-producing subsidiary "LG New Energy". LG intends to invest US$11 billion in the United States by 2025 to expand its battery supply network.

cannot be separated from the Chinese market and raw materials

. Behind South Korea's determination to fully top the global semiconductor industry is the reality that the dependence on China in key areas has increased significantly in recent years. According to South Korea's "Chronichou Ilbo" report on the 20th, data released by Korea Trade Association on the same day showed that after analyzing about 1,200 commodities in the import and export commodity classification system, it was found that among South Korea's main imported commodities in the first half of 2022, 78 types depend on China more than 80%, which continues to increase from the 72 types in the first half of 2021.

Source: Global Times

[ Global Times Special correspondent in South Korea Zhang Jing Global Times report Reporter Ni Hao] On July 21, South Korea announced an ambitious "semiconductor super power strategy", planning to guide companies to complete 340 trillion won (approximately 1.75 trillion yuan) in semiconductors by 2026. However, compared with the grand strategic plan, the most important task of the South Korean chip industry is to respond to the United States' "ultimatum" - the United States unilaterally set a deadline for South Korea to join the "Chip Quadruple Alliance" on August 31. After visiting South Korea on the 319th, U.S. Treasury Secretary Yellen html made a high-profile publicity for the deepening of cooperation between the United States and South Korea on "supply chain security", which is considered to be a further "breath of" to South Korea. South Korea's Asia Daily said that Japan and Taiwan are currently very active in participating in the alliance, but South Korea still needs to "think about it again." Data shows that exports to China account for 60% of South Korea's overall chip export scale, and for the South Korean chip industry, it is almost impossible for the Chinese market to give up. Many parties are keeping a close eye on what choice South Korea will make in the face of the US "ultimatum".

aims at " semiconductor super power"

21, the South Korean government announced a semiconductor industry development support plan, focusing on cultivating talents and realizing semiconductor material self-sufficiency. Lee Changyang, Minister of Industry, Trade and Resources, announced the "Semiconductor Super Power Strategy" on the same day. In order to encourage relevant companies to complete 340 trillion won semiconductor industry investment in the next five years, the South Korean government will provide financial support for the infrastructure required by the semiconductor park, and will also expand tax incentives for semiconductor equipment investment and research and development, increasing the tax deduction rate of equipment investment by large enterprises for national strategic technologies to 8% to 12%.

In terms of talent training, South Korea plans to strive to train 150,000 semiconductor professional talents by 2031. In addition, the South Korean government will focus on supporting the research and development of next-generation system chips, and increase the self-sufficiency rate of semiconductor materials, parts and equipment from the current 30% to 50%.

According to Reuters html on the 321st, semiconductors have become South Korea's largest export product for nine consecutive years, and semiconductors account for about 1/5 of South Korea's total exports in 2021. Currently, South Korea has the world's largest memory chip manufacturers, Samsung and SK Hynix .

As the semiconductor industry deepens its trade proportion in South Korea, with the increasingly fierce global semiconductor competition, South Korea is more eager to become the "leader" of the semiconductor industry, while seizing the technological highland, seeking resource independence and stability of the supply chain. Samsung Electronics announced at the end of June that it was the first in the world to realize the 3nm process process production chips, and it is scheduled to be shipped on July 25, one step ahead of its old rival TSMC.

According to South Korea's " Asian Economy " report on the 20th, U.S. Treasury Secretary Yellen delivered a speech while visiting the LG Chemistry R&D Park in Seoul on the 19th, saying that the United States and allies should implement the "friendly strait outsourcing" strategy. The strategy aims to limit the production and trade of major U.S. goods to "trusted countries." In his speech, Yellen said that South Korea has been increasing its investment in the United States in the fields of batteries and semiconductors, and the United States will continue to work closely with South Korea to establish a flexible supply chain.

LG Chemistry is the only company that Yellen visited during his visit to South Korea. South Korea's "Joint Ilbo" reported on the 20th that Yellen's visit to LG Chemistry was not accidental. The LG Chemistry R&D park he visited gathered a new generation of anode materials and separators and other future battery material research facilities. LG Chem is recently considering building new factories in the United States, etc., after the company has set up factories in Ohio and other places in the United States through its battery-producing subsidiary "LG New Energy". LG intends to invest US$11 billion in the United States by 2025 to expand its battery supply network.

cannot be separated from the Chinese market and raw materials

. Behind South Korea's determination to fully top the global semiconductor industry is the reality that the dependence on China in key areas has increased significantly in recent years. According to South Korea's "Chronichou Ilbo" report on the 20th, data released by Korea Trade Association on the same day showed that after analyzing about 1,200 commodities in the import and export commodity classification system, it was found that among South Korea's main imported commodities in the first half of 2022, 78 types depend on China more than 80%, which continues to increase from the 72 types in the first half of 2021.In addition, among South Korea's main imported goods, 253 types depend on China for more than 50%.

Specifically, in terms of raw materials and components, magnesium ingot (of which 99.8% are imported from China), aluminum cables (98.9%), color steel plates (97.7%), and solar parts (97%) are highly dependent on China. In addition, the dependence of products such as escalators, mice, rice cookers and other products on China is also more than 97%. Electric trucks , dishwashers, drones and steam boilers depend on China for the first time in the first half of this year. Some ingredients such as garlic, red beans, , chili, etc. rely almost entirely on China's imports.

At the same time, the proportion of Chinese products in the LCD monitors imported by South Korea increased from 52.1% last year to 78.7%, and the proportion of vacuum cleaner and clothes dryer also increased by about 10 percentage points. According to the report of the Korea Association of Operators, the largest proportion of South Korea's total imports are intermediate commodities (50.2%), and the largest source of intermediate commodities is China, accounting for 28.3%.

There are many similar types of products, and what is particularly worth paying attention to is the battery raw materials needed in the "new energy transportation revolution" and the rare gases required for chips. Several Korean giants cannot bypass China. The raw materials for a large number of chemical products, including the rare gas neon used in semiconductors, as well as the lithium hydroxide , nickel and manganese as raw materials for battery, are heavily dependent on China. In the first half of 2021, South Korea's "other fine chemical raw materials" imported from China accounted for 56.1%, and it rose to 64.2% in the first half of 2022.

"The dependence on Japan has decreased but the dependence on China has increased. South Korea's raw materials, parts and equipment still rely on overseas supply." South Korea's "Seoul Economy" reported on the 20th that data released by the official website of the Ministry of Industry, Commerce and Resources showed that in the first half of 2022, South Korea imported a total of US$130.067 billion, of which US$20.072 billion was imported from Japan (15.4%) and US$38.034 billion (29.2%) from China. Japan's share hit a new low in the past 10 years, and China's influence continued to expand.

China responded to

At the regular press conference of China's Ministry of Commerce on the 21st, spokesperson Shu Jueting responded to the question of whether the US government asked South Korea to reply before the end of August whether to join the "Chip Quad Alliance" and said that the stability of the industrial chain and supply chain is a global issue that all parties are currently paying great attention to. China believes that no matter what framework arrangements are, they should be inclusive and open, rather than discriminate against exclusive, and should promote the stability of the global industrial chain and supply chain, rather than damage and split the global market. Under the current circumstances, strengthening open cooperation in the industrial chain and supply chain to prevent fragmentation will benefit all parties involved and the entire world.

Shu Jueting said that in the first half of this year, the bilateral trade volume between China and South Korea reached US$184.25 billion, and increased by 9.4% year-on-year. Against the backdrop of the fragile recovery of the global economy of , Sino-South Korea trade has maintained rapid growth, which fully demonstrates the strong complementarity of the economies of the two countries and fully demonstrates the resilience and potential of economic and trade cooperation between the two sides.

Lu Chao, chief researcher at the North Korea Research Center of Liaoning Academy of Social Sciences, said in an interview with a Global Times reporter on the 21st that semiconductors are a highly divided and cooperative industry in the world, and no one or even a few countries can cover the entire industrial chain. In the global semiconductor supply chain, regions have different advantages and depend on each other. Lu Chao believes that even if the "chip four-party alliance" advocated by the United States can eventually take shape, it cannot form a complete industrial chain. China has its own advantages in semiconductor production and semiconductor raw materials.

Kim Tae-ki, professor of economics at Danguk University in South Korea, exaggerated that South Korea is too dependent on key areas of trade in China. If a trade war occurs between China and South Korea in the future, then South Korea's core industries such as semiconductors and new energy batteries may face a collapse.

"The United States proposes a semiconductor four-party alliance and 'friendly strait outsourcing'. What is South Korea's strategy toward China?" South Korea's "Korean National News" published an editorial on the 20th saying that the United States is continuing to promote the restructuring of the global supply chain with its own country, and South Korea is facing increasing pressure. The US's intention to exclude China from global supply chains is becoming increasingly obvious. The anxiety about this in the Korean industry is obvious.

South Korea SK President Choi Tae-won recently publicly stated: "Whether you like it or not, China is a considerable market, so giving up is not an option." The editorial emphasized that as an open trading country, South Korea must adhere to the principles of free trade and multilateralism in order to maximize national interests.

South Korea SK President Choi Tae-won recently publicly stated: "Whether you like it or not, China is a considerable market, so giving up is not an option." The editorial emphasized that as an open trading country, South Korea must adhere to the principles of free trade and multilateralism in order to maximize national interests.