Minister latest to declare support for key sector in face of pressure for data

South Korea's Minister of Economy and Finance Hong Nam-ki said on Monday that the government will seek to shield domestic semiconductor manufacturers from pressure by the United States to disclose sensitive information.

"We need to respond with three principles in mind: corporate autonomy, government support and cooperation between Korea and the US," Hong said at a meeting he presided over on the economy and security in Seoul.

In late September, the US asked global chipmakers such as Samsung Electronics to submit confidential information by Nov 8, including lists of their clients, in its bid to determine the factors behind a global shortage in semiconductors.

The demand for the information was prompted by the severe production disruptions experienced by US carmakers.

US Secretary of Commerce Gina Raimondo had said a voluntary request for information on the chip crisis within 45 days would boost supply chain transparency. She later warned industry executives that her team may invoke the Defense Production Act or resort to other measures to force them to hand over the data.

Hong, citing the importance of protecting indigenous technology at a time of intensifying technological competition, said the US request spans technology, security, industry and trade.

"In particular, securing and protecting high-tech are emerging as key issues in our external economic security," he said.

Hong's move to support the South Korean producers is in line with the stance of other senior government officials who have expressed concerns over the US demand.

South Korean Ambassador to the US Lee Soo-hyuck said on Oct 13 that South Korean companies will not readily provide highly confidential information. He said the move will put pressure on companies in the chip industry, and Samsung would be reluctant to comply with the US request.

Trade Minister Yeo Han-koo also relayed the conglomerate's concerns during bilateral talks with US Trade Representative Katherine Tai, earlier this month. The two met on the sidelines of a meeting of the Organisation for Economic Co-operation and Development.

Ongoing concern

"There is an ongoing concern over the request, as the scope of the requested information by the US is huge and it includes some trade secrets," Yeo said during the meeting.

Xiang Ligang, director-general of the Information Consumption Alliance, a telecom industry association, said that the US will do whatever it takes, even to its allies, to gain absolute control of the global chip industry.

He said that the US used to be dominant in the chip industry, but that has gradually changed over the years. In 2020, the US sold 47 percent of the world's chips but made only 12 percent of them itself. That has left the country reliant on overseas manufactures.

Maintaining absolute control of the chip industry is a necessary strategy for the US, because only in this way can the US continue to maintain its hegemony, Xiang said.

He added that the US, despite its dominance in chip design, has lagged behind in chip manufacturing. To maintain its control of the chip industry, the US will promote its own chipmakers while trying to take full control of other manufacturers across the world.

He Yun, an associate professor at the School of Public Administration at Hunan University in Changsha, said that if major chipmakers disclose their data, it may bring about two serious consequences. The data provided may affect the judgments relating to supply and demand in the market, thus affecting prices in the global chip market. Second, some data may be leaked by the US government to competitors in the US, giving rise to unfair competition.

Agencies, The Korea Times and Chen Yingqun in Beijing contributed to this story.