US chip export curbs on China to have limited impact on South Korea

Seoul (The Uttam Hindu): The United States' latest export control package against China is expected to have only a limited impact on South Korea's semiconductor industry, officials said on Tuesday, citing local businesses' low dependence on the Chinese market in the sector. The U.S. Commerce Department's Bureau of Industry and Security unveiled the package on the Federal Register, which includes restrictions on exports of high-bandwidth memory (HBM) chips to China.

The US also announced new controls on 24 types of semiconductor manufacturing equipment and three types of software tools for developing or producing semiconductors. "There could be some impact on South Korean firms producing HBMs, but we can minimise the fallout by shifting to export methods allowed under U.S. regulations," the Ministry of Trade, Industry and Energy said in a statement, reports YOnhap news agency.

"In terms of semiconductor equipment, the controls are applied only to cutting-edge products deemed significant to U.S. national security," it added, also noting the number of South Korean firms to be affected will be "small." The ministry pointed out that while the U.S. plans to apply the so-called "presumption of denial" principle, exports to South Korean businesses operating in China that have previously obtained validated end-user status will be allowed regardless of the announcement.

The ministry also noted that South Korea has been maintaining close coordination with the U.S., emphasizing that the two countries have agreed to closely monitor the impact of the move to avoid unexpected effects on companies in both nations. "SK hynix currently ships most of its HBMs to U.S.-based Nvidia. Samsung Electronics exports some low-performance HBMs to China, but the portion is small compared to its overall sales," an official from the industry ministry also said. "Overall, we believe that its impact on South Korean businesses will be minimal.