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TechTech War

Tech war: China’s position in global chip supply chain to weaken as South Korea closely aligns its interests with Japan and US, analysts say

  • Closer ties between South Korea and Japan highlight the increased US pressure on China’s semiconductor industry
  • That is expected to accelerate the process of China becoming marginalised in the production of advanced chips and in global supply chains

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China’s semiconductor industry is expected to be under increased US pressure once South Korea and Japan forge closer ties. Photo: Shutterstock
Seong Hyeon Choi
China’s standing in the international semiconductor supply chain could be on shaky ground once trading partner South Korea closely aligns its interests with the United States and Japan, according to analysts.
That prospect looms large for Beijing this week when South Korean President Yoon Suk-yeol visits Japan for two days from March 16, following Seoul’s announcement of a plan to resolve a long-standing dispute with Tokyo over wartime forced labour.

In the first visit in 12 years of a Korean head of state to Japan, Yoon is also expected to convince Tokyo to drop export controls on chip-making materials to South Korea and align their positions on supply chains.

The anticipated reconciliation between South Korea and Japan as a result of Yoon’s state visit will accelerate the process of China becoming marginalised in the production of advanced chips and in global supply chains, according to Park Ki-soon, a senior adviser and expert in China’s economy at Seoul-based law firm Dentons Lee.

South Korean President Yoon Suk-yeol. Photo: Reuters
South Korean President Yoon Suk-yeol. Photo: Reuters
“Global semiconductor production is dominated by countries like South Korea, Japan, the United States, the Netherlands and Taiwan,” Park said. “The semiconductor supply chain of this bloc will become more stable, while China will be isolated.”
Closer ties between South Korea and Japan highlight the increased US pressure on China’s semiconductor industry, after Washington implemented in October updates that further restrict China’s ability to obtain advanced chips and US President Joe Biden in August signed into law the CHIPS and Science Act to boost America’s hi-tech manufacturing capabilities.
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