[Exclusive] 'G7+4' Semiconductor Alliance to Be Established... China Exclusion Begins in Earnest

Discussion on Forming Semiconductor Supply Chain Consortium at Next Month's Summit
Increased Burden on Korea in Advanced Countries-Led Restructuring

[Sejong=Asia Economy Reporters Haeyoung Kwon, Sangdon Joo] It has been reported that Western advanced countries, including the United States, will establish a semiconductor supply chain consultative body in conjunction with the upcoming Group of Seven (G7)+4 summit next month. This is under the pretext of examining vulnerabilities in the supply chains of related raw materials amid ongoing semiconductor supply shortages in certain sectors. However, there is an interpretation that this move is a strategic step by Western countries to isolate China by reorganizing supply chains primarily among advanced countries. In particular, European countries are emphasizing the roles of semiconductor powerhouses South Korea and Taiwan in this process, raising expectations that not only will there be demands for increased investment but also that our companies may face greater burdens in managing relations with China.

According to the government on the 27th, experts from the G7+4 countries (South Korea, Australia, India, South Africa) recently held a video conference where they agreed to propose the establishment of an "international cooperation working group" to monitor semiconductor supply and supply chains through discussions on "economic recovery" at the summit to be held next month in Cornwall, UK.

A government official stated, "Experts from the G7+4 countries exchanged opinions on vulnerabilities in supply chains not only for semiconductors but also for rare earths, vaccines, and medical supplies," adding, "They reached a consensus on the necessity of establishing a supply chain consultative body for semiconductors." The official further noted, "Whether to extend the consultative body to other fields such as rare earths and vaccines will depend on the outcomes of the summit and related discussions."

The proposal to establish a semiconductor consultative body among the G7+4 countries was raised with the intention that trade order should not be disrupted nor exports and imports regulated for national security purposes. While the reason is ostensibly neutral, the dominant interpretation is that it is aimed at China.

If a G7-centered semiconductor supply chain consultative body is established and moves toward excluding China, it is expected to affect not only the global semiconductor market but also domestic companies such as Samsung Electronics and SK Hynix. European countries are likely to strongly request cooperation from South Korea and Taiwan in building the supply chain, using the establishment of the consultative body as an opportunity.

A government official said, "After conducting a supply chain survey, the G7 may demand that our companies guarantee stable semiconductor supply, mainly centered on Europe," adding, "While it is clear that the status of our companies has risen, the pressure on companies during the supply chain restructuring discussions could increase accordingly, which is a concern."

This content was produced with the assistance of AI translation services.