Korean media: Can't ignore "China against Chip4"

South Korea's "Central Daily" website on August 2nd, original topic: Why can't South Korea ignore China's "chip Quartet Alliance" (Chip4) co -participating in South Korea, the United States, Japan, and Taiwan, which is opposed to China. Essence Nevertheless, South Korea, which relies heavily in US technology and equipment, can only choose to join, otherwise the various sanctions adopted by the United States on China will also be applied to Korean companies. But this does not mean that South Korea can completely ignore China's opposition. About 60%of South Korean export chips entered the Chinese market. The US Semiconductor Association predicts that starting around 2025, Chinese chip consumption will surpass the United States. By then, Korean companies' dependence on the Chinese market will be further deepened.

Most of South Korea's trade surplus comes from trade with China. From 1993 to 2021, the trade surplus in China accounted for 86.0%of the trade surplus in South Korea. As the largest export product in South Korea, chip is the largest source of South Korea's trade surplus in China. Once the export of chips decreases, not only is it a trade surplus to China, the overall trade surplus of South Korea will decrease.

We also have to take into account the production facilities and supply chains of Korean companies in China. Samsung Electronics's factories in Xi'an and SK Hylos in Wuxi all produce a large number of companies' products. In addition, South Korea's import dependence on China on semiconductor parts, memory chips, metal materials, and diode is also above 40%. At present, the chip shortage, although China is unlikely to immediately take countermeasures against Korean companies, the stock price of major semiconductor manufacturers in South Korea in the first half of this year has fallen by more than 20%of the market's concerns about the overpowing supply. It is moving from producers to consumers.

We should also carefully explore the impact of the "chip Quartet Alliance" on Korean chip trade. In 2018, the United States is strictly forbidden to export cutting -edge products to China, but not only the United States, but also the chips exported to China in China and Taiwan have continued to increase. Judging from this trend, the US sanctions against China are unlikely to achieve great results in the short term.

Finally, we should also prepare for the failure of the "Chip Quartet Alliance". If the "Chip Quartet Alliance" wants to succeed, it needs to work closely in South Korea, the United States, Japan, and Taiwan. However, as competitors such as Samsung, TSMC, Intel, etc., it is unlikely to give up their own interests and cooperate. (Author Li Wanghui [Yin], translated by Li Xiaomin)

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