South Korea’s trade minister has stated that China remains an important economic partner to the country’s tech and semiconductor industries amidst updated US import regulations that have allowed South Korean companies to continue working with China.
South Korea’s trade minister Ahn Duk-geun stated in an interview with Japanese newspaper Nikkei that the US’ updated import rules were extremely “significant” to South Korean companies.
South Korean companies Samsung and SK Hynix were granted indefinite permission to expand chip manufacturing in China, according to a statement from the South Korean Presidential Office this October.
This permission allows these two companies to import advanced US semiconductor manufacturing equipment into China.
Before this, any trade between South Korean and Chinese companies that was for tech consumers in the US would need to apply case-by-case for an import license.
“If we had to go through these kinds of measures every year, from the company point of view, that would be hopelessly difficult to maintain their business,” stated Ahn to Nikkei.
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“The Korean government thinks that China is still a very important economic partner,” he explained, stating that South Korea had communicated to China that it wished to maintain a healthy economic relationship.
The US issued legislation controlling the trade of semiconductors and chip manufacturing equipment in 2022 when it passed the CHIPS and Science Act, to protect the US’s semiconductor supply and increase domestic production.
Senior analyst at research company GlobalData, Beatriz Valle, spoke to Verdict on what Samsung and Hynix’s permission means for the future of South Korea’s relationship with China.
“This is excellent news for the technology market and hopefully it may signal the beginning of a return towards more openness in trading conditions,” she stated, “It is no doubt a sensible move by the US to create exemptions that allow South Korean companies to operate their microprocessor fabrication facilities in China again.”
Valle explained that because South Korea was an important global exporter of semiconductors, this allowance between South Korean companies and China is likely to have a ripple effect.
“Other geographies and companies such as TSMC from Taiwan also enjoy exemptions and it seems that pragmatism has prevailed on this occasion,” Valle concluded.