US 'Chip4 Alliance' Request Requires Multifaceted Review... "Political Intent Must Be Excluded" [New Economic Security Landscape]

⑧US Requests South Korea to Confirm Participation in 'Chip 4 Alliance' by End of August

[Image source=Yonhap News]

[Asia Economy Reporters Sunmi Park, Kyunghwan Bae, and New York Correspondent Seulgina Jo] The U.S. government has requested that our government inform them by the end of August whether it will participate in the so-called ‘Chip 4 Alliance (Semiconductor Alliance)’ being promoted to address semiconductor supply chain issues.

According to diplomatic sources on the 13th (local time), the U.S. plans to hold the first working-level meeting of the Chip 4 Alliance by the end of August and has asked the South Korean government to notify them of its attendance by then. The Chip 4 Alliance is a concept proposed by the U.S. government to expand and strengthen semiconductor cooperation among four countries: the U.S., South Korea, Taiwan, and Japan. The official name used by the U.S. government is the ‘East Asia Semiconductor Supply Chain Network,’ but the media refers to it as the Chip 4 Alliance (English abbreviation: Fab4).

Currently, Japan and Taiwan have responded positively to attending the meeting, but South Korea has not yet replied regarding its participation. A senior official from the Presidential Office stated, "There is no consolidated government position yet on whether to join the Chip 4 Alliance." However, it was conveyed that discussions on strengthening semiconductor cooperation between South Korea and the U.S. are underway, and a comprehensive review is needed to decide on joining the Chip 4 Alliance.

This is because the Chip 4 Alliance is likely to be interpreted not merely as a semiconductor supply chain consultation but as a move to counter China, and the pros and cons of entering such cooperation must be carefully considered.

The Presidential Office is expected to exchange specific positions through the Korea-U.S. ‘Economic Security Dialogue’ channel, which discusses economic security issues and response strategies with the White House. Last week, key officials from the Presidential Office’s Economic Security Secretariat, the Ministry of Foreign Affairs, the Ministry of Trade, Industry and Energy, and the Ministry of Science and ICT visited the White House, where focused discussions on ‘strengthening the semiconductor supply chain’ took place.

At this meeting, the U.S. government mentioned semiconductor supply chain restructuring and requested continuous cooperation from the South Korean government, including information sharing. The South Korean government emphasized strengthening cooperation by expanding semiconductors from a key supply chain management target to an advanced new technology sector.

The semiconductor industry is closely watching what specific demands the U.S. will include in the Chip 4 Alliance proposal. Since the four countries are already in a cooperative relationship from the supplier side, if this is forcibly framed as the ‘Chip 4 Alliance’ to politically isolate China, South Korean companies may inevitably feel burdened.

An executive director of the Korea Semiconductor Industry Association, Gi-hyun Ahn, said, "If it is cooperation aimed at stabilizing the supply chain, it is positive, but it should not be followed by market restrictions from the demand side that exclude specific countries." He added, "We need to confirm the specific contents of what the Chip 4 Alliance concretely means."

Domestic semiconductor companies are concerned that South Korea’s participation in the Chip 4 Alliance could politically provoke China, leading to possible retaliatory measures from China.

An industry insider emphasized, "South Korean semiconductor companies already have factories in China, and since over 40% of the global semiconductor market counts China as a customer, it is important to exclude political colors from alliance participation." He continued, "Given that South Korea is strengthening semiconductor cooperation with the U.S., Japan, and Taiwan, if the Chip 4 Alliance framework reveals that South Korea is fully aligned with the U.S., companies cannot help but worry about side effects such as retaliatory measures."

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