Semiconductors are vital part of electronic equipment, which is used in computers, smartphones, automobiles. They make our digital world more convenient and effective. These days they are used in a wider range such as in AI or autonomous car. So, the importance of these semiconductors is increasing and now, they regard semiconductors as the weapon of nations. For instance, the USA is exerting pressure on China by using semiconductors as a weapon in the power struggle between two countries. In the fierce US-China power struggle, Korea is in a dilemma. In the global semiconductor industry, the USA takes hold with 48% of the world semiconductor market, causing a huge influence on the global semiconductor market. However, China has had a growing impact on the global semiconductor industry since 2015 when China declared the rise of China’s semiconductor. To counter this, the USA started to prevent China’s development in the semiconductor industry.
In 2020, the USA announced an additional measure called ‘Huawei Sanction’, which requires USA’s approval to trade with Huawei with semiconductors produced by using USA’s equipment. Huawei has actively traded with Samsung and SK Hynix which are the leading companies in Korea’s semiconductor industry. Because of this sanction, Samsung and SK Hynix will find it difficult to request the approval of a deal with Huawei and take a big hit as they try to read USA’s mind. In 2022, the USA suggested the formation of a ‘Chip Quad Alliance’ to Korea, Taiwan, and Japan. This alliance is intended to exclude China from the semiconductor industry by uniting four countries that have significant influence in the semiconductor industry. Furthermore, the USA announced the ‘Chips and Science Act’ which caused damage to Samsung and SK Hynix. Because more than half of these companies' factories are located in China, this law can be seen as a threat that demands that Korean companies give up over half of their revenue.
To fight back, China also announced sanctions on ‘Micron Technology’, the largest memory semiconductor company in the USA, citing that company as threats to national security in 2023. As a result, ‘Micron Technology’ will lose markets in China and their revenue will decrease. Also it will influence Korea. by worsening the relationship between Korea and the USA, while increasing the demand for Korean semiconductors in China. Therefore Korea is likely to face difficulties in maintaining a balanced trade relationship in the two countries’ power struggle of semiconductors.
Like this, now Korea is in an embarrassing position because of the semiconductor war between two countries. As a result, Korea has to engage in practical diplomacy as the largest exporter of semiconductors, China, and as a longstanding ally with the USA. Furthermore, Korea needs to actively invest in the current shortage of system semiconductors and strengthen its domestic semiconductor industry.
Kim Soeun (1-3)¹ | Staff Reporter
1) kkse0226@naver.com
