Sandwiched between the U.S. and China
SK Group is seeking to appease the Chinese government after the United States put the brakes on its plan to bring in advanced semiconductor equipment to its Chinese plant.
Seo Jin-woo, the group's vice chairman in charge of its China business, met with Wu Zhenglong, governor of Jiangsu Province, in Nanjing, China, on Nov. 30. They met in two months since Seo was promoted to vice chairman in September.
“Jiangsu Province is SK Group’s most important investment destination in China,” said Seo at the meeting. “We will deepen strategic cooperation with the province in various fields and implement high-quality projects.”
“SK Group is a world-class corporation and an old friend of Jiangsu Province, and played an important role in promoting the qualitative development of the region,” Wu said in response. “We will support SK Group’s continuous growth by improving the business environment and addressing issues facing it.”
SK Hynix is the largest foreign-invested company in Jiangsu Province and completed its DRAM plant in Wuxi in 2006. In 2019, the company invested 950 billion won to improve its production facilities, doubling production. In October, it also announced that it would jointly invest 2 billion yuan (about 369 billion won) with China’s Sinpa Group to create a semiconductor industrial complex in Wuxi.
However, SK Hynix is facing U.S. opposition in implementing its plan to introduce extreme ultraviolet (EUV) lithography equipment to its DRAM memory semiconductor plant in Wuxi. China has expressed its discomfort about the U.S. intervention and SK has become embarrassed.
Earlier, Reuters reported, quoting White House sources, on Nov, 18 that the Joe Biden government's opposition might shatter SK Hynix’s plan to introduce EUV lithography equipment from Dutch company ASML to the Wuxi plant.
An industry insider said if the Wuxi plant fails to introduce EUV lithography equipment in a timely manner, SK Hynix may lose competitiveness in the DRAM market.
Yet, SK Hynix president Lee Seok-hee dismissed concerns, saying that the company still has plenty of time to introduce the EUV equipment. “We will respond to this matter through cooperation with the U.S. government,” Lee said. He visited the United States in July and raised the issue at a meeting with U.S. government officials.