South Korea to Issue Semiconductor Alliance Decision
The deadline for South Korea to declare if it will join “Chip 4”—the US-led global semiconductor alliance—elapses today.
The alliance includes the US, Japan, and Taiwan and would cover all major areas of the semiconductor value chain. The US has emphasized that the four states could run semiconductor production more efficiently together. However, South Korea hesitates to join for fear of angering China, thereby leaving its semiconductor firms—including Samsung Electronics and SK Hynix—vulnerable to China-related risks.
Seoul agreed to attend a preliminary meeting for Chip 4, expected in the next few days, during which attendees would define the scope of participation for each country. The quadrilateral framework would likely include detaching China from the global semiconductor manufacturing process, reducing semiconductor sales to China and increasing technology sharing between American and South Korean chipmakers.
South Korean President Yoon Suk-yeol envisions the country to become a semiconductor superpower and recently announced that the government and private sector will invest $230 million in small-business innovation and in mergers and acquisitions of chip design firms, expected to begin next year. Therefore, Seoul will likely join Chip 4 given its reliance on allies for equipment, software, and material to produce chips.
