The power of chips and the alliance

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The power of chips and the alliance

The author is the Beijing correspondent of the JoongAng Ilbo.

At the end of December last year, Xian, China, was locked down after a dramatic surge in Covid cases. The Samsung semiconductor plant in the city was desperate at the time. A semiconductor plant is similar to a furnace. Once it stops, it takes time to recover normal production. Samsung was worried and calculated the estimated cost for shutdown. Memory chips were in high demand at the time. If the plant stops, China would suffer a memory supply shortage. And if the supply falls, the price would rise. Samsung concluded that a shutdown would be more profitable.

Samsung told the government of Shaanxi Province that as it respected China’s disease control policy, it would shut down the plant. After reporting Samsung’s decision to Beijing, the province got a reply that the factory shutdown should not happen and that all convenience should be provided to Samsung, unlike the Tesla factory that closed down during the Shanghai lockdown. Chips were stronger than Covid-19.

In May, U.S. President Joe Biden visited the Samsung semiconductor plant in Pyeongtaek, Gyeonggi. On July 14, there was a report from Washington that the United States was asking for an answer from Korea about whether to join the “Chip 4” alliance with the United States, Japan and Taiwan. The article pointed out that Korea will lose more by joining the alliance if China retaliates.

China was delighted. On July 17, the online edition of the Global Times, a state mouthpiece, began to stir it up. The paper said that yielding to the U.S. pressure will do more harm than good and that China made up 48 percent of Korea’s memory chip exports of $69 billion in 2021.

The Global Times went on to say that a meeting of the Chip 4 alliance will be held shortly, upholding the One China policy. The paper pointed out that China and Hong Kong make up 60 percent of Korea’s total semiconductor exports of $128 billion last year. It even called the alliance a “commercial suicide.” In the meantime, the Chinese Foreign Ministry and media did not pressure Japan or Taiwan. On July 22, the Financial Times compared computer chips to “the 21st century strategic version of fossil fuels.” That means that the chip supplier is boss.

China advocates the goals for the centennial anniversary of the military. Meddling with Taiwan would disrupt the global chip supply chain. As seen in Xian, a private company makes decisions based on profits, while a country moves according to its national interest. That’s why Korea must stop self-harming.
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