Preparatory Meeting Slated for Early Next Month
South Korea is expected to join the U.S.-led Chip 4 semiconductor alliance. A preparatory meeting for the alliance is scheduled for early next month and the South Korean government recently said that it would participate in the meeting with the United States, Japan and Taiwan, stressing that the alliance is not against any specific country including China and the participation is a purely economic decision.
The concept of the supply chain alliance was proposed in March this year. The idea is to combine the strengths of the United States home to global leading fabless companies such as Qualcomm and Nvidia, South Korea and Taiwan as foundry leaders, and Japan leading the global semiconductor material industry. According to experts, the alliance is to keep China in check.
At the preparatory meeting, the four states are likely to discuss specific agenda items, ways and levels of participation, etc. The South Korean government is planning to express its opinions with its focus on national interest maximization. Experts point out that a potential concern is opposition from China, the largest client for South Korean semiconductor exporters. China is regarding the alliance as a violation of international trade rules.
The South Korean and Chinese economies are closely intertwined in various other sectors as well. Last year, South Korea’s total exports were US$644.4 billion and one-fourth of the total went to China. In addition, 29.3 percent of the total exports were based on components and materials imported from China whereas the dependence on the United States was 12.9 percent. South Korea’s reliance on Chinese, Japanese and U.S. intermediate goods was approximately 27 percent, 20 percent and 8 percent, respectively.