South Korea finds itself engaging in “active diplomacy” – as it contemplates joining a US-led coalition aimed at partially decoupling China from a global tech cooperation because it cannot afford to lose US technology and equipment for manufacturing semiconductors, analysts say. At a press conference with foreign journalists on Wednesday, Foreign Minister Park Jin stressed the Chip 4 coalition is not aimed at excluding a certain country and it would rather be a “consultative body” with a view to ensuring cooperation in securing a stable supply chain. “If China has a misunderstanding about it, we will exert our utmost diplomatic efforts to resolve the misunderstanding,” he said, adding that he plans to visit China next month for talks with his counterpart Wang Yi. The official line is that the government will reach a decision solely on the basis of national interests, but there is every indication that the country will join the United States , Japan and Taiwan in the move. Distrust and unease loom as South Koreans grow wary of China’s clout The US wants to hold the first partners meeting around the end of August, while the three others reportedly want to hold it behind close doors. The partnership known as the Chip 4 or Fab4 alliance is seen by Beijing as Washington’s plot to exclude China from semiconductor value chains, with both China’s foreign ministry and commerce ministry expressing opposition to the idea. “We hope South Korea will proceed from its own long-term interests, the principle of fair and openness to do more things that are conducive to the development of China-South Korea relations and the stability of the global industrial and supply chains,” Zhao Lijian, a Foreign Ministry spokesperson said on Tuesday. China is particularly sensitive about South Korea’s position. The country is key to Beijing’s semiconductor self-sufficiency drive, as South Korean chip giants Samsung Electronics and SK Hynix operate plants in China, helping Beijing integrate into cross-border value chains. Why China has bridled at the prospect of South Korea joining Chip 4 Minister of Science and ICT Lee Jong-ho said last week that Seoul should tread carefully, taking its costs and benefits into consideration. “Joining [the Chip 4 alliance] could affect other industries as well. We need to be careful about that. We have to judge and decide what will help us if we join it,” he said last week. There are concerns Beijing could hit back with economic retaliations against Seoul, but it remains unclear if such countermeasures could also affect South Korean-invested factories in China as well. Yang Hyang-ja, the head of a parliamentary committee on semiconductors, said she was in favour of the proposed alliance. “If South Korea keeps wavering over the tech alliance with the United States, it will face significant challenges in both national security and foreign affairs,” said Yang, a Samsung executive-turned-lawmaker. Yang noted the United States is home to companies holding key intellectual property for chip design, software and equipment. “If you take a look at the semiconductor landscape, the United States is like a landlord and the rest of the countries – Korea, China, Japan, EU and Taiwan – are tenants,” she said. South Korean government officials appear to be convinced that neither the United States nor China would want to rock the boat in light of their mutual dependence in the semiconductor value chain. China’s semiconductor industry is currently focusing on labour- and capital-intensive wafer fabrication, assembly, testing and packaging, while the United States is strong on technology-centred chip design, manufacturing equipment and core intellectual property. “Washington officials do not have any question about the fact that the cost of complete US-China chip decoupling will be huge,” an unnamed high-ranking government official was quoted as telling the Korea Times last week. “As the Chip 4 alliance isn’t something that could immediately threaten China’s national security, chances are low that China would take retaliatory actions against South Korea even after Seoul joins the Chip 4,” he said. Samsung and SK are two of the top foreign investors there and their partnerships with top Chinese officials are “quite solid,” he added. Because Washington does not want to pursue a full-pledged decoupling with Beijing in semiconductors and its allies also do not want to cut off their trade with China, chances are low for the United States to apply imminent actions for tougher semiconductor export controls or secondary sanctions, the Korea Times reported. Hanyang University professor Park Jae-gun, chairman of the Korean Semiconductor and Display Technology Association, said South Korea’s presence in the Chip 4 alliance will further China’s interests rather than damage them. “In reality, South Korea’s semiconductor plants in China will not be able to be upgraded or expanded without US equipment,” Professor Park said, noting the life cycle for key equipment is no more than two to three years. “Unless South Korea-invested plants in China are provided with good US equipment, they cannot supply China’s other IT industry including mobile handsets with high-performance chips,” he said. China and South Korea are “in symbiotic relations” in the semiconductor industry, he said. Washington eyes chip alliance with Asian allies to squeeze China: report Kim Yang-paeng, a researcher at the Korea Institute for Industrial Economics and Trade, said the United States is likely to grant access to its cutting edge technology exclusively to its allies, citing Washington’s imposition of sanctions on Huawei . South Korea’s Samsung and its crosstown rival SK Hynix have wafer fabrication, assembly and testing facilities in mainland China. China is the largest importer of chips made by Korean companies like Samsung and SK hynix. The country including Hong Kong absorbed 60 per cent of South Korea’s chip exports last year.