South Korea seeks incentives from US to curb semiconductor exports to China

South Korea is among a handful of semiconductor powerhouses that face a potential US ban on exports to China of state-of-the-art chips

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South Korea is seeking more flexibility from the US on chip exports to China, similar to deals with SK Hynix and Samsung. Photo: Shutterstock

Published: 4:53pm, 2 Sep 2024

South Korea seeks more flexibility and incentives from the US to encourage Seoul’s compliance with additional curbs on advanced semiconductor exports to China that Washington is considering, according to its trade minister.

“For countries or companies trying to comply with the US in good faith, there should be some kind of carrots,” South Korean Trade Minister Cheong Inkyo said in his first interview with media since he took office in January.

“That would help US policy be embraced more easily.”

South Korea is among a handful of semiconductor powerhouses that face a potential US ban on exports to China of state-of-the-art chips, including high-bandwidth memory, used to train artificial intelligence.

Bloomberg News reported last month the US is working on several restrictions aimed at limiting sales of AI chips and equipment. One possible stick the US could wield is the foreign direct product rule, which allows American officials to control the flow of foreign-made products that use even the smallest bit of US technology.

The US is the dominant equipment and material player in half of 10 key chipmaking stages singled out by Bloomberg Intelligence including etching, plasma deposition and sputtering, with Japan and the Netherlands controlling the rest including wafer cleaning and lithography. South Korea’s SK Hynix and Samsung Electronics have long relied on technology, materials and expertise provided by the US and its allies.