China and South Korea Strengthen Cooperation on Semiconductor Industry Amid Global Chip Supply Concerns

China’s Commerce Minister Wang Wentao and South Korean Trade Minister Ahn Duk-geun met on the sidelines of the Asia-Pacific Economic Cooperation (APEC) conference in Detroit. They held discussions on enhancing dialogue and cooperation in the semiconductor industry supply chains, addressing global concerns over chip supplies, sanctions, and national security.

Focus on Industrial Supply Chain Stability and Cooperation

According to a statement from the Chinese Ministry of Commerce, both ministers exchanged views on the importance of maintaining the stability of the industrial supply chain. They emphasized the need for strengthening cooperation in bilateral, regional, and multilateral contexts to ensure a resilient and reliable semiconductor industry.

 China’s Commitment to Trade and Investment Cooperation

During the meeting, Minister Wang expressed China’s willingness to collaborate with South Korea in deepening trade ties and fostering investment cooperation. This signifies China’s interest in further strengthening economic relations between the two countries, including facilitating trade flows and encouraging investment opportunities.

South Korea’s Focus on Raw Material Supply and Business Environment

In contrast, the South Korean statement highlighted their trade minister’s request to China for stabilizing the supply of key raw materials. They also emphasized the need for a predictable business environment in China to support South Korean companies operating in the country. The statement mentioned a broader need for communication between working-level officials across industries, not limited to semiconductors.

Impact of US-China Semiconductor Dispute

South Korea finds itself in the midst of a tit-for-tat dispute between the United States and China concerning semiconductors. China’s cyberspace regulator recently announced that Micron had failed its network security review, leading to the blocking of key infrastructure operators from purchasing products from the company. The United States has been urging countries to limit China’s access to advanced chips, citing national security concerns.

Significance of China-South Korea Semiconductor Trade

South Korea heavily relies on chip exports, with approximately 40% of its chip shipments going to China, as per trade ministry data. Moreover, South Korean chipmakers such as Samsung Electronics and SK Hynix require U.S. technology and equipment to support their operations. Therefore, the cooperation and stability in the semiconductor industry between China, South Korea, and the United States hold significant implications for global chip supply chains.