Korea needs to be cautious about joining 'Chip 4' alliance: ICT minister
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Loading... - Amina Bakar
- 21 Jul 2022
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Korea should take a careful approach in deciding whether to join the United States-led semiconductor supply chain alliance, called the "Chip 4" alliance, taking its costs and benefits into consideration, the ICT minister said, Wednesday.
"In the end, whether to join or not should be judged on if it's in Korea's national interest. Though it is an issue in the semiconductor industry, joining could affect other industries as well. We need to be careful about that. We have to judge and decide what will help us if we join the Chip 4 alliance," Minister of Science and ICT Lee Jong-ho said during a press conference in Seoul.
To contain China's growing involvement in high-tech industries, the U.S. proposed forming an alliance with three countries ― Japan, Taiwan and Korea ― to establish a supply chain alliance with its allies who are specialized in chip design, manufacturing and materials and equipment for chip-making.
Unlike Japan and Taiwan, which have responded positively to joining the alliance, Korea has not made its decision yet, due to its high dependence on the Chinese market. Given that the U.S. is reportedly supposed to notify the three countries about the first Chip 4 meeting at the end of August, Korea is under pressure to announce its direction soon.
The ICT minister's remarks are being interpreted as showing concern that the Yoon Suk-yeol administration's move to join the Chip 4 alliance could cause a conflict with China. Both Samsung Electronics and SK hynix are running their chip-making plants in China, and the Chinese market, including Hong Kong, accounts for about 60 percent of Korea's chip exports as of 2021.
Though the country has not decided its position, its stance seems to be gradually shifting toward joining the alliance because the U.S. dominates semiconductor technology, equipment and other chip-related infrastructure.
"When looking at the global industrial landscape, the U.S. is the overwhelming first-class semiconductor powerhouse. If the U.S. is the landlord, Korea, Taiwan, Japan, Europe and China are its tenants," Yang Hyang-ja, an independent lawmaker and chairwoman of the National Assembly's Special Committee on Semiconductors, said at a committee event, Tuesday.
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