Solution for Controversy over Chip Prices?
Samsung Electronics Co. has decided to cooperate with the Chinese government to develop next-generation technologies including artificial intelligence (AI). With China having been putting pressure on Samsung Electronics due to a rise in the price of memory chips supplied to Chinese smartphone makers, some market watchers say that the partnership can settle a series of conflicts between the two.
According to business industry sources on Feb. 1, Samsung Electronics will sign a memorandum of understanding (MOU) with China’s National Development and Reform Commission (NDRC), which studies and formulates policies for economic and social development, to build a comprehensive relationship, including investment expansion, in line with South Korea-China economy ministers' meeting to be held on the 2nd. The new MOU is an extension of a MOU signed in 2014 and expired early last year with the term of three years. The dispute between South Korea and China over the deployment of the U.S. Terminal High Altitude Area Defense (THAAD) missile system caused a vacuum in the partnership as Samsung and China failed to extend the MOU right after it was expired. The two are signing the MOU again after the restoration of relations between the two countries.
The new MOU includes the joint development in key future technologies, including AI, in addition to comprehensive cooperation on investment expansion and technical tie-up. This is why the industry believes that the MOU between Samsung Electronics and the NDRC has more than a simple MOU. The NDRC recently accepted complaints over the surge in memory chip prices from local smartphone producers and launched an investigation into a possible price-fixing among semiconductor manufacturers, including Samsung Electronics.
An official from the industry said, “China is a step ahead of South Korea in the AI technology sector but it is impossible to realize technologies without high-performance semiconductors. The cooperation between Samsung and China on future technology can be an opportunity to resolve a conflict over memory chip prices.”