Due to the Failed Sale of MagnaChip China... Domestic Semiconductor Companies Likely to Change Business Plans

[Asia Economy Reporter Jeong Hyunjin] The sale of MagnaChip Semiconductor to Chinese capital was ultimately canceled on the 14th, deepening the US-China conflict over semiconductors and intensifying the concerns of domestic companies. As competition in the semiconductor industry intensifies this year and major countries wage a war to dominate semiconductor supremacy, domestic semiconductor companies caught between the two countries face the substantial risk of US-China conflict amid uncertain circumstances.

MagnaChip signed a stock purchase agreement with the Chinese private equity fund Wise Road Capital in March and has been striving throughout the year to obtain approvals from the US and South Korea. The review period by the US Committee on Foreign Investment in the United States (CFIUS) was extended twice during the entire process, but approval was not granted. Confirming the US's determination to block China by not allowing any semiconductor-related information to leak to China?even if it is not core technology?MagnaChip ultimately withdrew the application directly on the final day of the review. In South Korea, after submitting the application to the Ministry of Trade, Industry and Energy and providing various documents, the company had been awaiting results, but as it became difficult to obtain approval from all relevant countries, it also decided to withdraw the application directly.

As the US-China conflict over semiconductors leads to the actual withdrawal of the sale, domestic semiconductor companies operating in both countries are reconsidering their existing plans. SK Hynix, recently halted in upgrading its semiconductor plant in Wuxi, China, officially stated that it has no immediate plans to import extreme ultraviolet (EUV) lithography equipment. However, as the need for advanced processes increases across the semiconductor industry, the market views the import of EUV equipment within 2 to 3 years as inevitable.

SK Chairman Chey Tae-won also commented, "Can we still just chase after places with cheap costs like in the past?" He added, "When SK Hynix built a plant in China in the past, it was about reducing costs, but now if another issue arises, the cost calculation method will inevitably change." This is interpreted as suggesting the possibility of changes to existing plans.

Additionally, SK Hynix acquired Intel's NAND flash business last year and is currently awaiting only China's approval this year, but with no results yet, the company is anxious. Besides SK Hynix, Samsung Electronics is conducting semiconductor back-end processing in Xi'an, China, so domestic companies' concerns are expected to deepen. Kim Yang-peng, a senior researcher at the Korea Institute for Industrial Economics & Trade, said, "Neither the US nor China strongly chooses a specific country as needed, and quietly walking a tightrope in silence might be one way."

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