South Korea plans to boost chip sector

President Yoon Suk Yeol of South Korea has expressed his commitment to supporting the country’s chip sector, referring to the competition within the industry as an “all-out war” in light of increased tensions between the United States and China. In a meeting attended by industry leaders, lawmakers, and ministers, Yoon discussed strategies to maintain South Korea’s leading position in memory chips, promote the development of system semiconductors, and ensure the availability of necessary materials, equipment, and labor.

During the meeting, Yoon highlighted the significant role of geopolitical issues as the biggest risk faced by companies in recent times. He emphasized that resolving these challenges requires a collective effort from the nation, stressing the importance of strengthening cooperation and communication with like-minded countries, particularly the United States. Yoon stated that companies alone cannot address these issues and that it is a matter that should be tackled at a national level.

The government has outlined its plans to support the chip sector, which include expanding research and development initiatives, providing assistance to smaller players, enhancing legal protection for chip technology, and establishing a chip testing facility. The industry ministry issued a statement outlining these measures aimed at fostering the growth and competitiveness of South Korea’s chip industry.

South Korea aims to avoid being caught in the crossfire of the ongoing trade disputes between China and the United States concerning semiconductors. The country’s chipmakers, Samsung Electronics and SK Hynix, rely on U.S. technology and equipment, while around 40% of South Korea’s chip exports are destined for China. Last year, when the U.S. imposed export restrictions on chip-making tools to China, Samsung and SK Hynix received a one-year waiver to import tools without needing a license. It remains uncertain whether this waiver will be extended.

President Yoon’s commitment to supporting South Korea’s chip sector reflects the recognition of the intense competition in the industry and the need to navigate geopolitical challenges. The government’s plans to invest in research and development, protect chip technology, and establish a testing facility demonstrate a proactive approach to maintaining the country’s leadership in the chip market. As tensions between major players persist, South Korea seeks to strike a delicate balance between its dependence on U.S. technology and its significant chip exports to China, with uncertainties surrounding the future of export restrictions.