Samsung and SK Ultimately Submit Semiconductor Data... US Says "Will Use Defense Production Act If Necessary" (Comprehensive)

US Biden Administration on Alert for Possible Additional Data Requests
Semiconductor Firms' Submitted Data Excludes Client Information
Close Coordination Needed Between Domestic Companies and Government... Moon Seung-wook, Minister of Industry, Heads to US

[Image source=Reuters Yonhap News]

[Asia Economy Reporters Kim Hyewon, Kim Heungsun, Jung Hyunjin] Major domestic semiconductor companies such as Samsung Electronics, SK Hynix, and DB HiTek submitted semiconductor supply chain data requested by the U.S. government on the 8th (local time). These companies reportedly provided only the minimum data, excluding sensitive customer information. Since the U.S. may request additional information containing sensitive content, companies remain on high alert.

According to the industry, Samsung Electronics, SK Hynix, and DB HiTek submitted related data to the U.S. Department of Commerce on the same day. This was in response to the U.S. government's survey issued at the end of September to global semiconductor companies, requesting answers by this date on 26 items including semiconductor inventory, orders, sales, and customer information. According to the U.S. federal government website, 189 data submissions were posted by this date, of which 40 company data sets have been officially reviewed by the Department of Commerce and posted on the site as of 6 p.m.

The information related to domestic companies submitted on this day has not yet been posted. Since the officially posted data is up to the 7th, it is expected that data submitted on the deadline day, the 8th, will be additionally disclosed. Some global automakers such as GM and BMW also submitted data as semiconductor demand companies, but Hyundai Motor and Kia reportedly decided not to submit responses after consulting with the Korean government.

Samsung Electronics excluded internally sensitive information such as customer data and inventory volume, marking all submitted data as confidential to prevent public disclosure. SK Hynix also included only minimal content and marked some data as confidential. Inventory quantities were reportedly recorded by industry categories such as computer use rather than by product.

Companies can separate data that can be publicly disclosed from those that cannot, and confidential data is accessible only to the U.S. government. Taiwan's TSMC, the world's largest foundry (semiconductor contract manufacturing) company, also submitted data excluding confidential customer information on the 5th in a non-public manner. Other Taiwanese companies such as UMC, ASE, and GlobalWafers also submitted data. U.S. Micron and Israel's Tower Semiconductor also submitted data.

What’s Next for the U.S. After Receiving Semiconductor Data?

With most major semiconductor companies submitting data by the deadline requested by the Biden administration, global semiconductor industry attention is now focused on the possibility of additional pressure. Since companies submitted data while protecting core confidential customer information, future moves will likely depend on whether the U.S. government accepts the level of information provided.

The data submitted by major domestic semiconductor companies such as Samsung Electronics, SK Hynix, and DB HiTek to the U.S. did not include customer information. Companies explained this was due to contractual confidentiality and to maintain trust with customers. Taiwan's TSMC, the number one foundry company, also submitted data to the U.S. Department of Commerce on the 5th but stated it did not include customer information.

As some information was excluded from the data submitted to the U.S. Department of Commerce, how the U.S. government evaluates this is crucial. Since the information was requested to resolve semiconductor supply chain issues, if the submitted data is insufficient to help solve the problem, the U.S. may request additional information. The information requested by the U.S. government on September 24 included 26 items such as total sales over the past three years, sales by product, semiconductor inventory quantities, order details, and customer information?data that semiconductor companies generally keep confidential and do not disclose externally.

Data Request Started Because of Cars... U.S. May Take ‘Additional Actions’

Reviewing the data submitted by major semiconductor companies such as TSMC, U.S. Micron, and Germany's Infineon, which are publicly available on the U.S. federal government website, reveals that public data contains minimal content, with confidential data submitted separately. In particular, Infineon, a representative vehicle semiconductor manufacturer, reportedly submitted confidential documents in addition to official paperwork, including perspectives on changes in the vehicle semiconductor market, customer supply shortages, and the semiconductor supply chain issues from last August. While customer information was likely excluded, other information disclosure levels probably varied by company, so the U.S. government is expected to scrutinize these carefully.

Gina Raimondo, U.S. Secretary of Commerce

The issue is that the U.S. government may judge the information submitted by these companies as insufficient and apply additional pressure. U.S. Secretary of Commerce Gina Raimondo said on the day that if the companies' data is not sufficient, the government might take ‘further action,’ reiterating the Defense Production Act (DPA) card mentioned in September. She said, "They were cooperative in providing strong and complete data," but added, "If the data is not satisfactory, additional measures may be necessary."

According to Bloomberg News, Secretary Raimondo said, "Over the past two weeks, I personally spoke with CEOs of major semiconductor companies in the U.S. and abroad, and they promised to provide data." She continued, "We need to know what is happening, where the chips are going, and if hoarding is occurring," adding, "I do not want to use the Defense Production Act, but I will if necessary."

Ultimately, since the U.S. government's data submission request originated from the repeated impact on automakers due to vehicle semiconductor shortages, the key will be how well the current supply chain issues and bottlenecks can be understood and whether solutions can be found through this data.

Semiconductor Industry Playing a Waiting Game... "Need Careful Response"

Since the Biden administration's semiconductor-related actions began amid global supply chain issues and are expected to continue for some time, industry and experts suggest that domestic companies and the government should respond closely yet cautiously. The industry hopes for behind-the-scenes communication with the government to understand the background and desired information levels of the U.S. government's requests and to carefully convey companies' difficulties.

The Ministry of Trade, Industry and Energy has reportedly held multiple face-to-face and virtual meetings with Samsung Electronics, SK Hynix, and others to discuss response measures and has communicated companies' inquiries to the U.S. government. Samsung Electronics explained that it submitted data on the day and that the exclusion of customer-related information was done "in consultation with the Department of Commerce."

Minister Moon Seung-wook of the Ministry of Trade, Industry and Energy departed for the U.S. on the same day for follow-up measures. The ministry stated that Minister Moon's visit, scheduled until the 11th, aims to discuss ways to accelerate follow-up cooperation outcomes from the May Korea-U.S. summit, including the submission of supply chain information by domestic semiconductor companies and U.S. export restrictions on Korean steel. During this process, Minister Moon is expected to focus on explaining to Secretary Raimondo and others that the limited information provided by domestic semiconductor companies will not result in disadvantages.

An Gi-hyun, Executive Director of the Korea Semiconductor Industry Association, said, "The U.S. request is due to vehicle semiconductor issues," but added, "Rather than the Korean government and companies proactively preparing countermeasures or accepting demands, it is necessary to carefully observe the trends of global companies like Taiwan that lead the supply chain and act cautiously." Kim Yang-peng, a senior researcher at the Korea Institute for Industrial Economics & Trade, said that government responses should vary depending on the level of U.S. demands, stating, "If the current level of demand continues, a soft response is needed, but if unreasonable demands arise, legal measures should be prepared to protect domestic semiconductor companies and industry technology."

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