South Korea under immense pressure from U.S. to take its side in “Chip War”

[Tom Paine 1949]

When the chips are down: US-China cold war …

As in the first Cold War [with the USSR], here too there is an arms race, with bombs being replaced by the most significant weapon of the modern economy: chips. And each side in the struggle using its own strategy and tactics to make sure it doesn't get left behind….

President Joe Biden's administration … last October published a series of strict restrictions that cut off China's access to Western tools and workers, which are needed in the production of the most sophisticated chips. The global chip war began.

According to the American restrictions, citizens are prohibited from helping Chinese companies build chip technology above a certain level of sophistication - much broader restrictions than those of the Trump administration that focused on specific Chinese companies such as Huawei. The effect was immediate. American workers immediately left, and American suppliers, as well as European and Japanese ones, stopped supplying products and services. Samsung and TSMC, which previously invested in the development of the chip industry in China, directed their financial resources to other countries. TSMC, for example, is investing billions of dollars in building an advanced chip factory in Arizona thanks to subsidies from the U.S. government.

The Chinese industry has huge gaps to close. As of today, it is responsible for less than 1% of the output of the most advanced chips that are under U.S. sanctions. However, experts estimate that reducing foreign involvement in the Chinese market will create opportunities for local companies.

The U.S. has its own challenges in the arms race against China. When it comes to intellectual property it is indeed a world leader, but its production base is very limited…. When the global production bases of advanced chips are very close to China, when the country even claims that Taiwan should be part of it, the need for local production is particularly important.

In its efforts to strengthen the country's capabilities in this field, the Biden administration is targeting investment mainly in a relatively innovative technology known as Chiplets…. This technology is at the center of the Biden administration's policy to revive chip production in the U.S. Today, the U.S. is responsible for producing 12% of the global chip supply, but only 3% of chip packaging. The huge subsidy package for the sector in the amount of $52 billion approved by the Biden administration last summer is aimed, among other things, at encouraging the establishment of chip packaging factories. "As chips get smaller, the way you arrange them, the packaging, becomes more and more important and we need to do it in America," Commerce Secretary Gina Raimondo said in a February speech at Georgetown University….

And yet, the task is not easy. "Even with a subsidy, concentrating all the components needed to reduce American dependence on Asian companies is a huge challenge," Andreas Olofsson, who previously led the Defense Department's research efforts in the field, told the New York Times. "You don't have suppliers. You don't have a workforce. You don’t have equipment. You have to start from scratch."

China also has complex challenges to deal with in an effort to produce or maintain global leadership in the field. But if there is one thing that an arms race in the midst of a cold war guarantees, it is that each country will allocate all the necessary resources, financial, human and otherwise, to ensure it will win.

When the chips are down: A US-China cold war is brewing | CTech

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Could South Korea be torn in the US-China chip war again?

For South Korea, the room for strategic ambiguity seems to be narrowing, and while official language remains vague, it looks like Seoul is once again caught between the two superpowers, US and China. Despite all the back and forth, the South Korean government is still under tremendous pressure to pick a side in the growing technological rivalry between its military ally and its largest trade partner. [my emphasis]

Could South Korea be torn in the US-China chip war again?

——-

Here are two views from Mainland China focusing on South Korea’s evolving reactions to U.S. pressure:

South Korea to avoid US-China rivalry, will not capitalise on chip maker ban

GT Voice: US labeling of China to force SK economy to a dead-end - Global Times

 

[krichton]

South Korea sees China as an enemy and threat. I doubt they were "pressured" too much

 

[shockedcanadian]

South Korea sees China as an enemy and threat. I doubt they were "pressured" too much

No, S Korea has been having their cake and eating it too, similar to.what India has been doing. They defied the U.S once already. Bidens admin is now taking more of a Reagan or Bush type stance, "you are with us or the enemy". They have decided that not doing so has been hurting the U.S

 

[odanny]

For once this country is getting out in front of the issue and building two new chip making facilities, one in NY, the other in AZ. If we have to rely on Taiwan for anything we could be screwed in the future.

 

[Tom Paine 1949]

I agree that we are finally trying to address this problem, as also are Japan and Europe. But the fact remains that Taiwan’s TSMC company still produces some 90% of the world’s advanced chips. It is and will remain irreplaceable far into the future.

The now disrupted Korean chip trade and investment in China was mostly not for the newest super-advanced chips and chip-making equipment, and the Chinese themselves stopped the sale of U.S. Micron chips to China, which they are evidently confident they can replace. The Taiwanese are continuing to make their own rapid advances in the field, so the U.S. (and other countries) are really not just behind, but are hoping to catch up to a rapidly accelerating moving target.

Gordon Morris, founder of TSMC who lived and worked in Texas as a young man, has reportedly warned Nancy Pelosi when they met in Taiwan that the U.S. underestimates what it will take to become a significant player in production of new generation chips. The new investments here will be insufficient to more than scratch the service, and nothing will replace TSMC if China quarantines the island in the next few years. Such an action would disrupt the whole world. Some U.S. officials have indicated they would arrange to destroy TSMC facilities in Taiwan rather than let them fall into Chinese hands.

 

[Tom Paine 1949]

Correction: the name of the founder of TSMC, one of the greatest scientific / industrial innovators of this era, is Morris Chang.

Morris Chang - Wikipedia

en.m.wikipedia.org

 

[banana 777]

Chips belong to the UK and let nobody forget .
We have had Fish wars with the effling French and Icelandics and told them exactly what to do with their tiny rods .
Beware fiddling with our chips .

 

[frigidweirdo]

No, S Korea has been having their cake and eating it too, similar to.what India has been doing. They defied the U.S once already. Bidens admin is now taking more of a Reagan or Bush type stance, "you are with us or the enemy". They have decided that not doing so has been hurting the U.S

In what way have they defied the US?

 

[krichton]

No, S Korea has been having their cake and eating it too, similar to.what India has been doing. They defied the U.S once already. Bidens admin is now taking more of a Reagan or Bush type stance, "you are with us or the enemy". They have decided that not doing so has been hurting the U.S

How exactly did Korea defy the US?

 

[shockedcanadian]

In what way have they defied the US?

In 2022 or so, tbe U.S was rounding up an arrangement with Japan,.Taiwan and S Korea (the latter nations to manufacture) in an effort to maintain a friendly nation supply chain of chips. S Korea, has invested billions before and since in China and has never been fully on board with iths arrangement, like India, profiting from both sides. Now with China banning micron, they are trying to squeeze S Korea to remain neutral. China cannot have these nations in agreement and S Korea is the hold out in effect.

 

[frigidweirdo]

In 2022 or so, tbe U.S was rounding up an arrangement with Japan,.Taiwan and S Korea (the latter nations to manufacture) in an effort to maintain a friendly nation supply chain of chips. S Korea, has invested billions before and since in China and has never been fully on board with iths arrangement, like India, profiting from both sides. Now with China banning micron, they are trying to squeeze S Korea to remain neutral. China.cannot have these nations in agreement and S Korea is the hold out in effect.

I'm sure South Korea doesn't need the US coming along and stopping them making money.

The US makes loads of money in China, but picks and chooses what it is willing to give up or not.

The US will not be able to say "you're with us or against us" if the US is literally making money in China, and preventing others from doing so.

 

[shockedcanadian]

I'm sure South Korea doesn't need the US coming along and stopping them making money.

The US makes loads of money in China, but picks and chooses what it is willing to give up or not.

The US will not be able to say "you're with us or against us" if the US is literally making money in China, and preventing others from doing so.

The issue is Narional.Security and not just for America. I hold no personal grudge against China. If I had been born there, as in America rather than Canada; I am sure they would have embraced my potential. As an objective observer and lifelong supporter of the U.S and her system (while maintaning an open mind of other systems and progress within them), it is clear that the U.S is trying to maintain global influence. These other Western nations have to decide which system they want to prevail.

 

[frigidweirdo]

The issue is Narional.Security and not just for America. I hold no personal grudge against China. If I had been born there, as in America rather than Canada; I am sure they would have embraced my potential. As an objective observer and lifelong supporter of the U.S and her system (while maintaning an open mind of other systems and progress within them), it is clear that the U.S is trying to maintain global influence. These other Western nations have to decide which system they want to prevail.

Well, everything can be "national security". Selling anything, from cars to coffee can come under that. The Chinese have learned how to make coffee shops, and build cars, and become rich in the process. Had the US just blockaded China since 1948, China would not be rich, it'd be like Cuba.
So.... how South Korean chips in China are a US national security issue.....

 

[shockedcanadian]

Well, everything can be "national security". Selling anything, from cars to coffee can come under that. The Chinese have learned how to make coffee shops, and build cars, and become rich in the process. Had the US just blockaded China since 1948, China would not be rich, it'd be like Cuba.
So.... how South Korean chips in China are a US national security issue.....

Comparing advanced processor and memory chips to coffee isn't relevant in the context of national security.

 

[Tom Paine 1949]

Well, everything can be "national security". Selling anything, from cars to coffee can come under that. The Chinese have learned how to make coffee shops, and build cars, and become rich in the process. Had the US just blockaded China since 1948, China would not be rich, it'd be like Cuba.
So.... how South Korean chips in China are a US national security issue.....

I agree the U.S. has defined and redefined our “National Security” issues flexibly. Back in the 1970s our security agencies and politicians decided it was a good idea to engage with China diplomatically against our “main enemy” … the USSR (and Vietnam).

Back then Mao was still in power and the terrible Cultural Revolution was raging. Fortunately, a few years later Mao died and eventually Deng Xiaoping and new forces in the CCP emerged that dared to open up China to capitalism and the outside world. China transformed its economy and society dramatically and later was allowed into the WTO (which today we are eviscerating).

Had the West instead simply continued to try to ignore and isolate China, I would argue that it would not at all today resemble Cuba. More likely today it would resemble a giant and infinitely more dangerous North Korea, armed to the teeth with nuclear weapons and filled with 1.5 billion desperately poor and totally brainwashed people.

I agree our “national security” often is used as a fake issue. But it cannot be ignored either. Of course it is not always clear exactly what really will serve “our national security.” Nowadays, different sections of society have even fantasized that such a thing no longer exists and that the U.S. is already run by a “NWO”!

On economic issues, the U.S.’s new slogan vis-a-vis China is … “not ‘decoupling’ but ‘de-risking’.” This is quite appropriate, though of course China has grounds to doubt we mean what we say. The CCP is rightly concerned that we are now out to weaken and hobble China’s economy, and may one day resort to more extreme measures to do so.

In my opinion, we need to re-affirm our own support to reforming and enforcing WTO mechanisms for defining what the “rules based economic order” actually is.

It would be an excellent idea to end most of the non-strategic across-the-board tariffs introduced under the Trump Administration, which have not helped but mainly harmed our own industries and citizens — this would be a very good confidence-building measure to adopt to counterbalance some of the security measures we are taking … like “friend-shoring” and sanctioning even third party companies that trade with nations that challenge our unilaterally declared economic policies.

Meanwhile we must still try to build up our own productive capacity in chip-making and other high-tech industries, and keep our universities and corporations open to skilled foreign workers and scientists, without whom we cannot remain the world leader in advanced technology and research.

 

[frigidweirdo]

Comparing advanced processor and memory chips to coffee isn't relevant in the context of national security.

Why?

 

[frigidweirdo]

I agree the U.S. has defined and redefined our “National Security” issues flexibly. Back in the 1970s our security agencies and politicians decided it was a good idea to engage with China diplomatically against our “main enemy” … the USSR (and Vietnam).

Back then Mao was still in power and the terrible Cultural Revolution was raging. Fortunately, a few years later Mao died and eventually Deng Xiaoping and new forces in the CCP emerged that dared to open up China to capitalism and the outside world. China transformed its economy and society dramatically and later was allowed into the WTO (which today we are eviscerating).

Had the West instead simply continued to try to ignore and isolate China, I would argue that it would not at all today resemble Cuba. More likely today it would resemble a giant and infinitely more dangerous North Korea, armed to the teeth with nuclear weapons and filled with 1.5 billion desperately poor and totally brainwashed people.

I agree our “national security” often is used as a fake issue. But it cannot be ignored either. Of course it is not always clear exactly what really will serve “our national security.” Nowadays, different sections of society have even fantasized that such a thing no longer exists and that the U.S. is already run by a “NWO”!

On economic issues, the U.S.’s new slogan vis-a-vis China is … “not ‘decoupling’ but ‘de-risking’.” This is quite appropriate, though of course China has grounds to doubt we mean what we say. The CCP is rightly concerned that we are now out to weaken and hobble China’s economy, and may one day resort to more extreme measures to do so.

In my opinion, we need to re-affirm our own support to reforming and enforcing WTO mechanisms for defining what the “rules based economic order” actually is.

It would be an excellent idea to end most of the non-strategic across-the-board tariffs introduced under the Trump Administration, which have not helped but mainly harmed our own industries and citizens — this would be a very good confidence-building measure to adopt to counterbalance some of the security measures we are taking … like “friend-shoring” and sanctioning even third party companies that trade with nations that challenge our unilaterally declared economic policies.

Meanwhile we must still try to build up our own productive capacity in chip-making and other high-tech industries, and keep our universities and corporations open to skilled foreign workers and scientists, without whom we cannot remain the world leader in advanced technology and research.

The thing is that China is trying to become self sufficient. It might be able to do this. It certainly has all the resources it needs, oil might be a problem, if they can make an economy that doesn't rely on oil so much.
China will end up producing its own chips at some point, all that's happening now is the Chinese will spend a lot more money making it happen right now.

 

[shockedcanadian]

Why?

Is this your example of levity?

 

[frigidweirdo]

Is this your example of levity?

It's my way of getting someone to say something they should already have said.

 

[shockedcanadian]

It's my way of getting someone to say something they should already have said.

You are honestly asking why advanced chips which are needed for advanced military machinery, quantum computing and space applications poses a National Security threat relative to a caffeine fix that coffee provides?