The US is now trying to propose an alliance for the semiconductor industry with Asian countries, including Japan, South Korea, and Taiwan, to gain the upper hand against the massive Chinese semiconductor industry. South Korea, however, rejected the proposal having billions of dollars already invested in manufacturing facilities in China.
Seoul Decided Not to 'Fully Accept' Proposal
According to the report of SouthChinaMorningPost, Seoul decided not to "fully accept" the proposal due to Samsung Electronics and SK Hynix, the country's chip giants, having billions of dollars of investments in China.
The publication notes that the country feared potential retaliation from Beijing should they decide to join the allegiance. This came from a report by BusinessKorea citing an industry source saying although cooperation with the United States remains a top priority, "the biggest market is also of paramount importance."
Washington Looks for Alternatives to China for Its Chip Supply Chain
Washington has been looking for alternatives to China for its supply chain since the pandemic, which triggered a global chip shortage. In September of 2020, the United States, the European Union, and Japan's officials were looking at potentially bringing "like-minded" policies together to help shift reliance on China.
The potential chip alliance reports are coming as a result of a new bill that would potentially provide $52 billion in funding for research and domestic semiconductor manufacturing aimed directly at countering China's growing influence.
US Senate Passes the American Competes Act for Final Passage
The America Competes Act was passed by the US Senate just recently for final passage to be reconciled in the House of Representatives of the United States. This move has triggered a debate on Chinese social media, with citizens saying this move would push Beijing to increase its efforts for self-sufficient technology.
Samsung's second phase of the NAND flash project in Xi'an, China, started its operations last year. This was according to a Shaanxi government statement back in February.
$25 Billion Complex Produces 40% of Samsung's NAND Flash Production Capacity
The $25 billion complexes reportedly produces over 40% of Samsung's total NAND flash production capacity. To add, the complex includes two water fabrication PLA facilities.
SK Hynix, on the other hand, has operations in the Chongqing and Sichuan provinces. The operations include a DRAM water fabrication plant and testing and packaging facility.
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South Korea Ran a $25.7 Billion Trade Surplus in China
The SK Hynix' C2 plant is located in Wuxi, and the company's initial 12-inch water fab started back in 2006 and received a $780 million investment for further expansion during the middle of 2019, as per the company's statement.
Integrated circuits (ICs) have been Seoul's number one export to China. In 2021, South Korea ran a trade surplus of $25.7 billion with China, increasing from its 2020 numbers at just $20.1 billion.
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Written by Urian B.
