Samsung Electronics Austin Plant, USA Although the competition for supremacy between the US and China to change the global semiconductor supply chain to its own country is overheating due to the shortage of automotive semiconductor supply and demand, it is pointed out that the Korean government’s movement is slow.
It has been reported that the Korean government is concerned that if it comes directly to the front, it could be seen as a confrontation between countries and could give false signals to both sides of the US, China.
A high-ranking government official said on the 6th, “We are closely monitoring the trends of related countries and are seeking their own strategies,” and said, “As we are strengthening communication with the private sector, please watch the government’s response.”
According to the Ministry of Trade, Industry and Energy, the government will hold the second official meeting on the 7th of the’Future Vehicle-Semiconductor Solidarity Cooperation Council’.
This council was launched on the 4th of last month by the government and the automobile/semiconductor industry to resolve uncertainties in the supply and demand of semiconductors for vehicles.
At the meeting, attendees will check the supply and demand status of automotive semiconductors, and see if the’Short-term vehicle semiconductor supply and demand and industrial capability strengthening strategy’ announced at the Innovation Growth Big 3 Promotion Meeting on the 10th of last month is properly implemented.
Through the announcement at the time, the government decided to invest 200 billion won in the development of semiconductor technology for vehicles, and in the short term suggested ways to self-isolate exemption and corona 19 vaccination at the time of entry and exit to businessmen leaving the country to procure semiconductors for vehicles.
An official from the Ministry of Industry said, “It will be an opportunity to further refine the public-private cooperation related to vehicle semiconductors.”
The government explained that it has also held discussions with Taiwan, which is the consignment production of a number of automotive semiconductors. It is known that Taiwanese authorities have recently delivered a message to the Korean government that TSMC, a local semiconductor company, has started to increase production of semiconductors for vehicles, and that the supply will increase to countries including Korea.
“The automotive semiconductor is a temporary supply-demand imbalance, and this occurred as the economic recovery progressed faster than expected in a situation where semiconductor supply was reduced due to Corona 19.” There are many prospects,” he explained.
The problem is that the U.S.-China competition is intensifying to change the semiconductor supply chain to its own country as a result of the unbalanced supply and demand of semiconductors for vehicles. Both the US and China are important production bases and distributors for us.
As of March this year, semiconductors accounted for the highest proportion of Korea’s total exports at 17.7%. When looking at semiconductor exports in the first quarter (January-March), the proportion to China reached 38.5% and the proportion to the United States was 7.1%.
Intensifying semiconductor war for supremacy (CG) Korean companies are concerned about the possibility that the embarrassing situation of being forced to choose one amid the struggle for supremacy of the two great powers will be rekindled.
Samsung[005930]Is currently being invited to a meeting on the 12th at the White House in the United States to prepare an emergency response plan for the recent semiconductor shortage with major semiconductor and finished car companies. It is observed that the US, which is pushing for domestic-centered supply chain restructuring, will require new investments by Samsung Electronics in the US.
Earlier, US President Joe Biden signed an executive order on the 24th of last month to cooperate with allies within 100 days to develop a strategy to strengthen the global supply chain of four key items, including semiconductors, large-capacity batteries for electric vehicles, pharmaceuticals, and important minerals.
Regarding this, a government official said, “We are communicating with Samsung, but there is nothing to say in detail.”
Experts emphasize that, as no one can predict what action to take after the US supply chain survey, we should understand the situation of the semiconductor supply chain like the US and review various scenarios related to US actions.
“If the US simply asks for more investment, it would be better for us,” said Lee Jun, head of the material industry department at the Institute for Industry Research. It becomes difficult to respond if they are told not to supply semiconductor equipment to the other party,” he observed.
“The US will continue to compete for technological supremacy with China in the future,” he said. “Our government should recognize this and prepare for a longer period of time.”
In addition, he added, “I hear a lot of opinions while the government is meeting with semiconductor experts, but it may be difficult to understand the supply chain because companies do not inform them that it is a trade secret, so the government and the industry must cooperate well.”
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