Why South Korea is grumbling about new US chip restrictions on China



Analysis Why South Korea is grumbling about new US chip restrictions on China ROK semiconductor firms may lose billions if unable to utilize recent factory investments throughout supply chains John LeeMarch 2, 2023 SHARE COPY LINK FACEBOOK X LINKEDIN MASTODON President Yoon Suk-yeol and President Joe Biden visit the Samsung Semiconductor Pyeongtaek Campus, May 20, 2022 \| Image: ROK Presidential Office New U.S. semiconductor restrictions aimed at curtailing Chinese competitiveness may undercut South Korea’s biggest chipmakers. A new requirement that bars recipients of $53 billion in CHIPS Act subsidies from engaging in “certain significant transactions” involving expanding chip manufacturing capacity in China, or “countries of concern,” for 10 years is becoming a friction point between Seoul and Washington. While there is little concern about the two allies growing apart under the staunchly pro-U.S. Yoon administration, future South Korean governments may push back more strongly against Washington’s semiconductor policies and make the ROK’s own chip industry more autonomous. CHIPS ACT Proponents initially © Korea Risk Group. All rights reserved. No part of this content may be reproduced, distributed, or used for commercial purposes without prior written permission from Korea Risk Group. LATEST ANALYSIS 01Lee Jae Myung’s ‘pacemaker’ strategy tests South Korea’s leverage with Trump 02Trump’s Korea investment victory lap masks safeguards Seoul still controls 03North Korean POW dispute tests Seoul-Kyiv trust and future Ukraine policy 04South Korea’s CPTPP push exposes the cost of turning trade gains into consensus 05AI storage boom gives South Korea battery makers an EV overcapacity lifeline 06South Korea’s Mexico strategy runs into the hard limits of USMCA politics 07Preschool test ban forces South Korea’s English hagwons to rethink placement 08Lee Jae Myung’s Wall Street pitch tests South Korea’s capital market credibility

Analysis

Why South Korea is grumbling about new US chip restrictions on China

ROK semiconductor firms may lose billions if unable to utilize recent factory investments throughout supply chains

John LeeMarch 2, 2023

Why South Korea is grumbling about new US chip restrictions on China

President Yoon Suk-yeol and President Joe Biden visit the Samsung Semiconductor Pyeongtaek Campus, May 20, 2022 | Image: ROK Presidential Office

New U.S. semiconductor restrictions aimed at curtailing Chinese competitiveness may undercut South Korea’s biggest chipmakers.

A new requirement that bars recipients of $53 billion in CHIPS Act subsidies from engaging in “certain significant transactions” involving expanding chip manufacturing capacity in China, or “countries of concern,” for 10 years is becoming a friction point between Seoul and Washington.

While there is little concern about the two allies growing apart under the staunchly pro-U.S. Yoon administration, future South Korean governments may push back more strongly against Washington’s semiconductor policies and make the ROK’s own chip industry more autonomous.

CHIPS ACT

Proponents initially

Why South Korea is grumbling about new US chip restrictions on China

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John Lee