What the U.S.-China Chip War Means for a Critical American Ally – The New York Times
U.S.-China Relations
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South Korea’s vital semiconductor sector depends on China. A deadline looms for how it could be affected by U.S. efforts to control China’s tech advance.
John Liu and
John Liu reports on China and technology, and Jin Yu Young covers South Korea, from Seoul.
Samsung and SK Hynix, the semiconductor titans of South Korea, have spent over $52 billion to build up their operations in China. Business with China has long made up a sizable portion of their sales.
But the ties between South Korea’s chip companies and China are under strain from geopolitics.
South Korea, which relies heavily on its semiconductor sector for jobs and revenue, is wedged between China and the United States, South Korea’s longstanding ally, in their trade war over technology.
To curb China’s access to advanced chips that could power its military, Washington has escalated steps to control the sale of such technologies. The Biden administration imposed restrictions last October, raising alarms in Seoul and setting off furious lobbying in Washington to try to minimize damage to South Korea’s semiconductor industry.
A one-year waiver from the export rules that the companies received in mid-October is set to expire soon. While a new waiver is widely expected, uncertainty surrounds how long it might last.
“Geopolitical issues have become the biggest risk for companies to manage,” South Korea’s president, Yoon Suk Yeol, said in June, speaking at a meeting of government officials and business executives about a national semiconductor strategy. “Companies cannot resolve this problem alone,” he said, calling the competition over chips an “all-out war.”
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