Escalating U.S.-China trade war...impact on Korean chipmakers?

미중 무역전쟁 본격 점화...한국 반도체 없계에 "득보단 실"

The trade spat between the U.S. and China is escalating by the day, raising concerns about its global repercussions.
This is especially so for Korea, a country heavily reliant on exports.
According to our Kim Hye-sung, Seoul's semi-conductor industry could initially benefit from it, but experience tremendous losses in the long run.
A trade war has begun between the world's two largest economies.
The Trump Administration last Friday started charging duties on 34 billion U.S. dollars of Chinese imports, and China hit back against the same amount of American goods, including soybeans and cars.
President Trump is already eyeing another round of tariffs on Chinese goods worth 16 billion dollars, even saying that the final tariff total could top 500 billion.
China's exports to the U.S. are worth only about a quarter of what the U.S. sends the other way, but experts say Beijing has cards other than tariffs that it can use to retaliate that could disrupt global supply chains and hurt global trade.

"China could interfere with U.S. supply chains based in China. For example, shutting down American companies' assembly work by invoking obscure safety rules, or issuing some kind of a travel ban, just as we saw during the THAAD dispute between Seoul and Beijing last year."

Last week, Beijing banned U.S. chipmaker Micron Technology from manufacturing and selling its products in China.
Such a move is of particular concern for Korea.
China and the U.S. are Korea's number one and number two trading partners, and they account for more than a third of Korea's total exports.
Semiconductors alone accounted for 17 percent of Korea's exports last year, with China being the number-one buyer.

"In the short run, banning the U.S. company Micron from selling chips in China could give Korean chipmakers like Samsung Electronics and SK Hynix an edge, since a competitor is out of the market. But if Beijing widens its probe to all foreign chipmakers in the country, and uses that as justification for its 'Made in China 2025' plan, the ban could ultimately affect Korean companies and give a boost to Chinese local chipmakers."

As the U.S.-China trade spat escalates, experts say it could further acclelerate Beijing's Made in China 2025 plan, a development plan which aims to increase the country's semiconductor self-sufficiency from 10 percent to 70 percent by 2025 through government support.
With the boom in the global semiconductor supercycle possibly nearing its end, and Chinese authorities launching a probe into foreign manufacturers, Korean chipmakers are on alert.
Kim Hyesung, Arirang News.

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