SEOUL - South Korean chipmakers are likely to face not only a slowdown in demand for semiconductors, but also critical restrictions from the US over production in China - collateral damage from the intensifying friction in US-China trade.
His comments reflect the US’ suspicion that China may be stealing its cutting-edge technology to strengthen its own chip-building capability, which could pose a threat. In October, Korean semiconductor producers were given a one-year licence to continue producing their products in China. The grace period was as part of US export restrictions on chips and other technologies to China.
Korea exports some 40 per cent of its chips to China, an undisputedly crucial market for local chip producers. Samsung’s Chinese chip plant in Xian produces around 40 percent of the company’s NAND flash memory products, while SK hynix’s factory in Wuxi manufacturers about 48 per cent of its DRAM chips.
If Samsung and SK hynix want to receive subsidies for the plans to build chip facilities in the US, they have to sign a pact that will restrict chip production in China for the next 10 years. Depending on how the US tweaks the rules, the Korean chip producers may be stuck with outdated technologies for their Chinese plants.