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Biden turns to South Korea to ease chip shortages


Thursday, June 10, 2021

The White House underscored the importance of partnerships with allies like Korea to tackle the global shortage of chips and prevent China from getting high-tech dominance in a 250-page report released Tuesday.

The report recommended the U.S. deepen its engagement with Korea given the technical lead and considerable market share held by semiconductor manufacturers Samsung Electronics and SK hynix.

“The fact that most advanced technology links in the semiconductor supply chain are concentrated among countries that are U.S. allies and partners creates an opportunity to forge a cooperative, multilateral approach to semiconductor-related issues,” the report said.

“The United States could further explore semiconductor-related R&D opportunities with key partners, such as Taiwan, Europe, Japan, and South Korea, with which the United States has existing Science and Technology agreements,” it said.

The paper, released following a 100-day review of disruptions in global supply chains, called for more investment from the key chip players to ramp up production of semiconductors in the U.S.

It proposed the U.S. engage with Korea through bilateral meetings to foster more investment in chip production facilities, while tapping the multilateral Quadrilateral Security Dialogue to boost cooperating with India, Australia and Japan.

To execute the strategy, the report advocated a more active role for the U.S. government, a clear departure from free market-driven ideas of the past and reliance on the private sector.

“While industrial supply chains and investment are almost exclusively the purview of the private sector in the United States, the same is not true for Japan, South Korea, and Taiwan who have a long history of industrial coordination between the government and the private sector,” it read.

“As such, direct U.S. government involvement in coordinating efforts to build industrial partnerships between U.S. business and industrial partners in Japan, Taiwan, and South Korea is critical.

Samsung Electronics was the second most cited company in the report after Intel. It is the world’s largest memory chip maker, capable of deploying advanced semiconductor manufacturing technologies.

“The United States lacks semiconductor production capability at the most advanced semiconductor process node — currently 5 nanometer — at which only TSMC (Taiwan) and Samsung (South Korea) currently operate,” the report noted.

The paper mentioned Samsung’s recent $17 billion investment proposal in the U.S., although the company has yet to confirm a specific location.

The idea of revitalizing microchip production in the U.S. has grown after a shortage that has affected many industries.

The U.S. has only 12 percent of global semiconductor manufacturing capacity. Most capacity is in Asian countries.

By: DocMemory
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