Biden, semiconductor, etc. supply chain review order… Korean companies with complicated calculations
US President Joe Biden is holding a semiconductor chip and mentioning the purpose of the order before signing an executive order on building a semiconductor supply chain at the White House on the 24th (local time).[워싱턴 EPA=연합뉴스]
[아시아경제 김흥순 기자] As U.S. President Joe Biden ordered a review of the supply chain of major items that have exposed problems in the supply and demand structure, domestic related companies are also in a situation where they must carefully weigh the gains and losses of interest. In particular, semiconductor companies whose exports account for 95% are sensitive. If the US government strengthens cooperation with allies to support the semiconductor industry, it is positive for domestic companies planning exports or local investments, but relations with China, which account for around 40% of the export amount, cannot be ignored.
President Biden signed an executive order at the White House on the 24th (local time) to conduct a 100-day review of the supply chain of four key items, including semiconductor chips, large-capacity batteries for electric vehicles, rare earths, and pharmaceuticals. What President Biden emphasized on this day was semiconductors. While listening to the semiconductor in front of the reporters, he emphasized the need for semiconductor production in the United States. It also revealed its position to push forward a bill for semiconductor funding.
It is observed that if the Biden administration focuses on expanding the semiconductor supply chain and puts effort in fostering its own companies or attracting foreign companies, it can be beneficial to Korea. Representatively, Samsung Electronics has built trust by operating a semiconductor factory in Austin, USA since 1998, and based on this, it is searching for suitable candidates to expand its factory in the US. Many state governments, including New York State, have already sent love calls to Samsung Electronics.
On the one hand, if the Biden administration’s decision is made to check China in the future, major domestic semiconductor companies will have no choice but to struggle. This is because China’s share of the semiconductor industry. According to the Korea International Trade Association, between January last year and the last year, Korea’s semiconductor exports amounted to about 107.9 billion dollars (about 119 trillion won), of which China recorded about 43.3 billion dollars (about 48 trillion won), the highest. In May of last year, China’s share of total exports was 46.4%, nearly half. It is reported that Samsung Electronics and SK Hynix currently account for half of their semiconductor exports to China. In addition, Samsung Electronics is operating a semiconductor plant in Xi’an, China and SK Hynix in Wuxi, respectively.
An official in the semiconductor industry said, “China is a market that cannot be discarded from the standpoint of domestic companies because IT companies are growing rapidly, so the demand for semiconductors is enormous, and it has a great influence on the global economy.” You can be in a difficult situation where you can neither do this nor do that.” He added, “We must continue to expand investment and exchanges in the United States, but do well in a tug of war between the two countries so as not to miss the Chinese market.”
Reporter Kim Heung-soon [email protected]