[Biz View] Half a Month Left Until Deadline... US Semiconductor Information Requests, Companies Watching Closely Until the Last Minute

Samsung Electronics, SK Hynix, and Others
Must Participate in Survey on Inventory, Orders, and Sales by the 8th of Next Month

U.S. President Joe Biden is holding up a silicon wafer at the Semiconductor Supply Chain CEO Meeting held at the White House last April.
[Image source=Yonhap News]

[Asia Economy Reporter Kim Heung-soon] The deadline for global manufacturers associated with the semiconductor supply chain to submit sensitive information, as requested by the U.S. Biden administration, is approaching in two weeks. Domestic companies included in the information disclosure targets, such as Samsung Electronics and SK Hynix, are also deliberating over whether and to what extent to participate. From the perspective of individual companies, it is not easy to reject the U.S. government's virtually coercive proposal, so it is expected that the 'watchful waiting' to monitor other companies' trends will continue until the last moment.

U.S. Tightens Information Provision... Some Companies Reportedly Moving to Participate

According to the industry on the 24th, domestic semiconductor companies such as Samsung Electronics and SK Hynix must decide whether to respond to a survey related to the semiconductor supply chain by next month 8th, following the request from the Biden administration. This was announced at a virtual meeting hosted by the White House last month, requiring global semiconductor companies to submit sensitive information related to inventory, orders, and sales within 45 days.

The companies have been conducting internal reviews on this matter. Meanwhile, the U.S. Department of Commerce announced that some companies have confirmed participation. Major foreign media reported on the 22nd, quoting a U.S. Department of Commerce spokesperson saying, "Companies including Intel, GM, Infineon, and SK Hynix have announced plans to disclose information soon," and "We greatly appreciate these efforts and encourage other companies to participate."

The U.S. government has repeatedly emphasized that participation is voluntary, but at the same time, it has created an atmosphere of coercion. A representative example is the mention that the Defense Production Act (DPA) could be invoked if companies refuse to submit data. The DPA is a law created by the U.S. government during the Korean War to encourage companies to produce military supplies, granting direct control over key industries.

Recently, the Korea Economic Institute (KEI) forecasted that refusal to provide information could limit participation in the U.S. public procurement market. This could pressure companies like Samsung Electronics, which have previously won contracts in advanced technology and telecommunications equipment sectors from the U.S. Department of Defense. The U.S. Department of Commerce spokesperson reiterated while introducing the fact that multiple companies have expressed willingness to cooperate, "Whether coercive measures are necessary depends on how many companies participate and the quality of the information provided."

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki is delivering opening remarks at the 1st External Economic Security Strategy Meeting held at the Government Seoul Office in Jongno-gu, Seoul on the 18th. Photo by Kim Hyun-min kimhyun81@

"Breaking Confidentiality Clauses Would Cause Business Damage"... Domestic Companies Worry
Individual Company Responses Insufficient... Public-Private Collaboration and Support Measures Expected

Domestic companies are in a position where they must consider both the U.S. government's pressure and potential business issues. An industry insider said, "Because confidentiality clauses in semiconductor supply contracts are strict, security is thoroughly maintained even among domestic companies," adding, "If the information requested by the U.S. is exposed, the company could suffer disadvantages in relationships with clients and significant business damage such as loss of sales or market share." There are also concerns that the information could be used to benefit U.S. semiconductor companies' growth.

Nevertheless, it is not easy for individual companies to raise objections against the U.S. government, so there is an atmosphere of trying to reveal as little as possible. A semiconductor industry official predicted, "It is highly likely that companies will carefully observe the situation until the deadline to decide the scope of data to submit and the atmosphere among the U.S. and other global companies." Already, Taiwan's TSMC, the number one foundry (semiconductor contract manufacturing) company, has stated it will not provide sensitive corporate information.

Earlier, on the 20th, Moon Seung-wook, Minister of Trade, Industry and Energy, said at the National Assembly, "I understand that our companies are preparing to review and submit data that can be provided without violating confidentiality clauses in contracts and domestic laws to the U.S." Separately, the government has also started inter-ministerial consultations to respond to the U.S. information provision request. This was discussed at the first External Economic Security Strategy Meeting held on the 18th under the theme "Trends and Future Response Directions Regarding U.S. Semiconductor Information Provision Requests."

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, said at the meeting, "It is necessary to respond based on corporate autonomy, government support, and Korea-U.S. cooperation," adding, "In particular, the government will strengthen communication and cooperation with the business community." The External Economic Security Strategy Meeting, newly established on the 27th of last month, is chaired by the Deputy Prime Minister for Economic Affairs and consists of 11 members, including five economic ministers and five officials from the National Intelligence Service, National Security Council (NSC), and the Blue House.

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