South Korea and the Netherlands, U.S. allies and chip superpowers, transfer to tighten ties
SEOUL, South Korea — In a flap that might a minimum of complicate the Biden administration‘s hopes for an international “semiconductor alliance” to bar high-end, high-tech chips from China, Dutch officials are reportedly irked by the excessive demands from Seoul made ahead of the high-stakes state visit earlier this week by South Korean President Yoon Suk-yeol.
The brouhaha broke out Friday when the Joongang Ilbo newspaper reported that, among the alleged demands, Seoul asked for the entry of more visitors than could feasibly visit into the cleanroom of ASML, the Dutch semiconductor equipment manufacturer. A cleanroom is a highly sanitized area with – usually – highly restrictive access regulations.
During his visit, Mr. Yoon, who – unusually for a South Korean leader- has made global diplomacy the centerpiece of his presidency, was photographed in an ASML cleanroom. He also met King Willem-Alexander and held talks with outgoing Prime Minister Mark Rutte before returning home on Friday.
While the report might irritate Mr. Yoon’s PR workforce, officers on either side are hoping it’s a minor embarrassment given the larger points in play between two of the world’s important gamers within the semiconductor manufacturing provide chain.
Chips, the de facto hearts of all digitized {hardware} from smartphones to spacecraft, have emerged as a key part within the wrestle between Beijing and Washington for world financial supremacy. That wrestle performs out throughout a number of domains, from navy and diplomatic to financial and cultural. Beijing accuses Washington of enlisting allies reminiscent of South Korea and the Netherlands to strangle China‘s rise as a high-tech superpower.
The outcome of talks between Mr. Yoon – whose entourage included the heads of chipmakers Samsung Electronics and SK hynix – and his Dutch counterparts was what both sides called a “semiconductor alliance.”
“Both leaders…reaffirmed their commitment to build a semiconductor alliance encompassing the participation of governments, businesses and universities,” a joint statement read. “In this vein, the two leaders agreed to establish a bilateral semiconductor dialogue and a Semiconductor Talent Program, and to continue and expand business-to-business cooperation.”
The two also agreed to oversee and ensure supply-chain security.
The alliance makes sense, given that both nations are U.S. allies and key players in semiconductors and given that the two countries’ chip sectors are complementary moderately than aggressive: The Dutch place is upstream, the South Koreans’ is downstream.
The Netherlands’ AMSL is the world’s main provider of top-tier semiconductor manufacturing equipment, with a monopoly on excessive ultraviolet, or EUV, lithography machines that are indispensable for making probably the most superior chips of under 5 nanometers.
South Korea’s Samsung Electronics and SK Hynix are key clients, on condition that they’re the world’s largest and second-largest producers of reminiscence chips, respectively.
Questions cling over whether or not PR-savvy politicians are wanted to advertise company ties – and over how, behind closed doorways, the 2 administrations actually really feel about chips turning into centerpieces of the China-U.S. competitors.
During the journey, a memorandum of understanding was signed between AMSL and Samsung to construct a $762 million joint analysis heart in South Korea. Another MOU was signed between AMSL and SK Hynix on recycling hydrogen, a byproduct of chip-making processes.
“They don’t need the government for that,” mentioned Tokyo-based chip knowledgeable Scott Foster of the 2 company MOUs, which had been doubtless agreed upon with little authorities intervention. “What probably needs investigating is that neither the Dutch or South Koreans, apart from some rabid politicians, are completely comfortable with having their tech industries on a short American leash.”
Diplomatically, the Biden administration is engaged in a long-term time period marketing campaign to rally its democratic allies in opposition to China.
Financially, the CHIPS Act Mr. Biden signed in August boosts chip manufacturing within the U.S., the place each Samsung and SK Hynix are increasing operations. That doubtlessly advantages the South Korean corporations, in addition to AMSL, which is positioned to promote equipment.
In phrases of leverage, a lot of the mental property within the design and manufacturing of chips is in American palms. That is especially true of AMSL, mentioned Mr. Foster, a tech specialist at LightStream Research, which analyzes corporations and sectors throughout Asia.
Some of the main applied sciences and firms acquired by AMSL for its most superior equipment had been created by U.S.-taxpayer-funded analysis, or are U.S.-based.
“U.S. law says that any American technology comes under U.S. export restrictions,” mentioned Mr. Foster. “The Dutch go along.”
In the broader aggressive panorama, it’s attainable that South Korean corporations, which function large chip fabrication crops in China however which make their most superior merchandise at house, are extra cautious of China than their Dutch companions.
“It is to the advantage of the Koreans to keep the Chinese a few steps behind them and you can see this in displays as well as chips,” mentioned Mr. Foster. “But that is not true of the Dutch.”
