Long-term Effect on Korean Semiconductor Industry Limited
The Korea Institute for International Economic Policy (KIEP) said in its report on Aug. 21 that the latest U.S. restrictions on Huawei, which are to block Huawei’s access to all types of semiconductors, are likely to directly affect South Korean companies supplying semiconductors to Huawei and yet the impact of the measure on the semiconductor industry of South Korea will be rather limited in the long term.
On Aug. 17, the Donald Trump administration revised the Export Administration Regulations to put even Huawei’s overseas subsidiaries on its blacklist and prevent Huawei from procuring semiconductors in a circumventive way. The KIEP said that this is a direct hit to Huawei and South Korean companies’ semiconductor exports to Huawei cannot but be affected in the short term.
Still, the institute added that Huawei is the only target of the U.S. measure and its impact on China’s high-tech industries as a whole is likely to be limited as in the case of its impact on the South Korean semiconductor industry. “China will redouble its efforts to reduce its external dependence in the semiconductor sector and this means South Korea needs to focus more on staying ahead of China in terms of technological strength,” it pointed out.