[ad_1]
Seoul has signalled it will not intervene to stop South Korean companies Samsung and SK Hynix from filling in a market gap after China imposed a ban on US chipmaker Micron, in an escalation of the tech battle between the superpowers.
Last month, the White House quietly asked South Korea to urge its chipmakers to hold back from boosting sales to China if the sale of Micron products was restricted by Beijing.
But policymakers in Seoul on Monday said they were unwilling to wade into the dispute and would defer to the companies.
“Regarding what the US tells us to do or not to do, it is actually up to our companies. Both Samsung and SK Hynix, with global operations, will make a judgment on this,” South Korea’s vice-minister of trade Jang Young-jin told reporters. Samsung and SK Hynix declined to comment on the issue.
Washington last year unveiled tough chip export controls on China and has hit Huawei and many of the country’s top tech titans with sanctions. Beijing on Sunday retaliated by imposing sanctions on the US memory chip champion, limiting its sales in the country on cyber security grounds following a seven-week review.
The measures against Micron outlined by the Cyberspace Administration of China bar critical infrastructure operators from buying products containing the US company’s chips because of alleged “serious network security risks”.
Analysts say the ban is expected to force manufacturers of servers, computers and other electronics sold into China to turn to South Korean chipmakers such as Samsung and SK Hynix for replacements, potentially making the companies beneficiaries of the rising geopolitical tensions.
Samsung and SK Hynix are also working to increase business in the US and need one-year waivers from the country to be extended so they can ship new equipment into their chip fabrication facilities in China. The waivers must be renewed later this year, giving Washington potential leverage to use against the companies.
Shares in Samsung and SK Hynix both ended the day up less than 1 per cent, buoyed by expectations of positive effects on them from China’s move against Micron. Shares in Micron were down 5 per cent in pre-market trading.
“There are not many Chinese companies that get chips only from Micron. Even if we increase our supply to Chinese customers, how can they examine all these deals individually and judge that the increased volume comes from us, replacing Micron’s?” said a senior industry executive in Seoul.
The comments from Seoul come after a three-day G7 summit in Hiroshima where leaders pledged to tackle Beijing’s use of economic coercion.
While South Korea is not a member of the G7, the group said it would work on creating a mechanism with a broad set of partners to deter and respond to Beijing’s use of economic sanctions to further its geopolitical goals.
Analysts said they expected a limited hit to Micron, which had sales of $30.8bn in its last fiscal year, with 16 per cent coming from companies headquartered in mainland China or Hong Kong.
Dylan Patel, chief analyst at semiconductor research group SemiAnalysis, said it was very easy to swap between memory chips produced by the leading chip groups, suggesting that the long-term damage to Micron may be manageable.
“You can swap a Micron memory part out for Samsung or SK Hynix in nearly all cases without any changes,” he said. “Memory is a commodity and supply chains will adjust in a couple [of] quarters.”
Additional reporting by Qianer Liu and Eleanor Olcott in Hong Kong and Nian Liu in Beijing
[ad_2]
Source link
Comments are closed.