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Semiconductors

US sees security risks from SK Hynix capex plan in China

USTR Katherine Tai says Washington may impose restrictions on other items in addition to semiconductors

By Nov 23, 2021 (Gmt+09:00)

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US Trade Representative Katherine Tai
US Trade Representative Katherine Tai

The United States expected SK Hynix Inc.’s capital expenditures plan in China to pose a threat to national security, Washington’s top trade official said.

US Trade Representative (USTR) Katherine Tai made the remarks on Nov. 22 as the country is trying to reduce China’s influence in the globe and take the lead in the world’s trade. The Biden administration is seeking the development of an Indo-Pacific economic framework to expand its stance against China among allies.

SK Hynix had planned to install some of the new extreme ultraviolet lithography (EUV) machines by Dutch firm ASML Holding N.V., to its factory in Wuxi, China, to renovate the plant and improve the efficiency of memory chip production. But the US banned the move, citing potential use for military purposes.

“I am aware that the technology in question is highly sensitive, and that there are legitimate concerns about the risks to national security in terms of where this technology ends up," Tai said in an interview with a South Korean radio.

“National security includes military and defense concerns, but it can also be broader,” Tai said when asked if Washington could impose such restrictions on other items.

“CHIPMAKERS’ VOLUNTARY SUBMISSION OF INFORMATION”

On the US request in September to global chipmakers for supply chain information, Tai said the government asked those companies to provide the data autonomously and they voluntarily submitted the information.

“The request for information is a part of the US government's effort to try to identify the bottlenecks because our partners in industry and in governments have shared with us and we've experienced ourselves that there are information gaps about where the problems are in the supply chain through production and also among the customer base," Tai said.

When asked if the request was a one-off event, Tai said she was "optimistic,” although she does not have information since the Department of Commerce handles the issue.

Samsung Electronics Co. and SK Hynix, the world’s two largest memory chip makers, submitted their business information except for sensitive ones earlier this month.

The US will not include China in the Indo-Pacific economic framework, Tai said, as Washington is set to work with Beijing through a separate channel.

NEW DISCUSSION CHANNELS ON NEW TRADE AGENDAS

South Korea is set to establish enhanced discussion channels with the US to handle new trade agendas such as supply chains, climate change and vaccines, the country’s Trade Minister Yeo Han-koo said.

“The two countries will respond to global challenges together by strengthening Korea-US trade cooperation to restore the resilience and stability of the supply chain, an ambush to the global economic recovery, digital economy, carbon reduction and climate change,” Yeo said.

On Nov. 19, Tai and Yeo agreed to set up the new channels to boost cooperation in supply chains and other major trade issues during a meeting.

In the meeting with Tai, Yeo urged the US to make active efforts on major trade issues, especially South Korea’s key interests, including negotiations to revise tariff rules on steel exports from the Asian country.
South Korea’s Trade Minister Yeo Han-koo (left) and USTR Tai shake hands on Nov. 19
South Korea’s Trade Minister Yeo Han-koo (left) and USTR Tai shake hands on Nov. 19

Write to Ji-Hoon Lee at lizi@hankyung.com

Jongwoo Cheon edited this article.

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