Yang Hyang-ja urges Yoon to join 'CHIP4 Alliance'... "The US is the landlord when it comes to semiconductors" (Comprehensive)

4th Meeting of Semiconductor Special Committee on the 19th
"Cannot Ignore the Chinese Market Either"

Yang Hyang-ja, Chairperson of the Special Committee for Strengthening Competitiveness in the Semiconductor Industry. / Photo by Dongju Yoon doso7@

[Asia Economy Reporter Moon Chaeseok]

"I told President Yoon Seok-yeol to join the 'Chip 4 Alliance,' but I don't know what he thinks about it. While Samsung Electronics' market capitalization increased from 339 trillion won to 377 trillion won over two years, TSMC's rose from 348 trillion won to 518 trillion won. If we do not firmly establish a technological alliance with the U.S., South Korea will face difficulties in both security and diplomacy." (Yang Hyang-ja, Independent Member of the National Assembly and Chairperson of the Special Committee on Semiconductor Industry Competitiveness Enhancement)

"When I was president of the Information Display Society in 2010-2011, I managed five courses related to displays and provided employment benefits at Samsung and LG Display to students who earned a B grade or higher in three of those courses. In the long term, Samsung Electronics and SK Hynix should also offer employment incentives to semiconductor majors by establishing a curriculum of 15 to 20 semiconductor courses, requiring students to complete more than 10. Of course, this should not involve legislative or administrative regulations." (Kwon Oh-kyung, President of the Korean Academy of Engineering Sciences)

There have been calls from the National Assembly and academia that South Korea should promptly join the 'Chip 4 Alliance' demanded by the U.S. and establish a system of more than 15 semiconductor-related departments at universities to activate the hiring of excellent engineers by Samsung Electronics and SK Hynix.

On the 19th, Yang Hyang-ja, an independent lawmaker and chairperson of the Special Committee on Semiconductor Industry, and Kwon Oh-kyung, president of the Korean Academy of Engineering Sciences, made these claims during a special lecture on 'Semiconductor Industry and Workforce Development Measures.' The lecture was held at 2 p.m. in the second conference room of the National Assembly Members' Office Building in Yeouido, Seoul. Attendees included Vice Chairman Song Seok-jun (People Power Party lawmaker), Kim Jeong-ho, professor of Electrical and Electronic Engineering at KAIST, Hwang Cheol-seong, distinguished professor of Materials Science and Engineering at Seoul National University, Kim Yong-seok, professor of Electrical and Electronic Engineering at Sungkyunkwan University, Park In-cheol, professor of Electrical and Electronic Engineering at KAIST, Park Dong-moon, advisor at Samsung Display, and Ahn Ki-hyun, executive director of the Semiconductor Industry Association.

In his opening remarks, Chairperson Yang argued that South Korea must promptly join the 'Chip 4 Alliance.' He said that joining is essential not only for competition among individual companies such as Samsung Electronics, SK Hynix, Taiwan's TSMC, and U.S. Intel but also to prevent national security isolation. On the same day, The Wall Street Journal reported that the U.S. Congress is considering a bill that provides $52 billion (about 69 trillion won) in subsidies to foreign companies building semiconductor factories in the U.S., including provisions that prevent these countries from investing in China for ten years. The U.S. has demanded that South Korea, Taiwan, and Japan join the 'Chip 4 Alliance' by the end of next month.

Later, in a meeting with reporters, he prefaced his remarks as a 'personal opinion' and said, "Looking at the global industrial landscape, the U.S. is the 'overwhelming number one' in semiconductors, so the U.S. is the landlord of the semiconductor industry, and South Korea, Taiwan, Japan, and China are tenants." Yang emphasized that as chairperson of the special committee, he is not pressuring to 'join.' He added, "They asked us to say whether we will join by the end of next month, which is creating a very awkward situation for South Korea externally," and said, "The overall position of the special committee is that we cannot ignore the U.S. request to join the 'technology alliance.'"

However, Chairperson Yang stressed that maintaining balance with China is essential. He said, "The U.S. demanded that we join by the end of next month, but if we do not join, we will observe the situation and ask for time to assess it if necessary, and some message from the government will come down. Since Samsung also has a factory in Xi'an, China, we must continue cooperative relations with China and avoid provoking them."

President Kwon also said, "From various perspectives, to excel in semiconductors and maintain a 'super-gap,' collaboration with the U.S. is important, but looking at the market, we cannot ignore China," adding, "We must strengthen cooperation with the U.S. while considering relations with China." Kim Jeong-ho, professor of Electrical and Electronic Engineering at KAIST, said, "If the U.S. wants us to join Chip 4, I think we should join. Since we depend on the U.S. for market, technology, and equipment, we must go together."

Regarding the mismatch in workforce development between the metropolitan area and non-metropolitan areas, they said the metropolitan area, where semiconductor factories are concentrated in Hwaseong, Pyeongtaek, and Yongin, cannot be ignored. Chairperson Yang said, "I do not want to dichotomize the two," but diagnosed, "The region that needs to supply the urgently lacking workforce is the metropolitan area." He added, "Since the semiconductor industry is heavily concentrated in the metropolitan area, I think the view that increasing quotas in the metropolitan area alienates the provinces is incorrect."

Chairperson Yang said, "From early next month, I will meet with ministers of related ministries such as the Ministry of Economy and Finance and the Ministry of Education to listen to the status of semiconductor policy implementation by each ministry and receive legislative and recommendation items," adding, "As chairperson of the special committee, I will attend the ruling party's government-party consultation in early next month to present a 'Semiconductor Grand Design' that synthesizes semiconductor industry policies from each ministry." He continued, "Soon, we will compile legislative proposals from each ministry and propose semiconductor support bills at the special committee level, and once the parliamentary organization is agreed upon, we will strive to launch a bipartisan National Assembly special committee responsible for supporting future advanced industries including semiconductors, bio, and artificial intelligence (AI)."

He did not specify the contents of the bill. However, as stated in media interviews, he said the bill would definitely include changes to the current floor area ratio cap of 350%. Chairperson Yang said, "There are even voices calling for easing it to 490%, not 450% as reported," emphasizing, "To properly carry out all semiconductor processes, buildings must be constructed larger to improve production efficiency." He added, "We cannot include all five- or ten-year plans in the bill to be announced in the first or second week of next month, but urgent matters must be included."

Meanwhile, President Kwon presented strategies for both new workforce development and preventing talent outflow during the lecture. He said universities should create 15 to 20 semiconductor-related courses and establish a system that awards a 'Semiconductor Department Completion Certificate' to students who complete more than 10 courses. This would allow semiconductor companies like Samsung Electronics and SK Hynix to provide incentives when hiring these students. He introduced that this method was applied in the display industry in the past, where students who completed three major courses with a B grade received employment benefits at LG Display and Samsung Display.

President Kwon said, "According to the Ministry of Trade, Industry and Energy, South Korea is expected to need at least 5,500 master's and doctoral graduates in the semiconductor industry by next year," adding, "In the short term, we need to increase semiconductor department quotas, expand equipment budgets, and support education in materials, parts, and equipment. In the mid to long term, from root education in elementary, middle, and high schools, we should teach physics, mathematics, and calculus essential for semiconductors and open 15 to 20 semiconductor courses, awarding a 'completion certificate' to students who take more than 10 of these courses."

As a solution to prevent talent outflow, he proposed encouraging companies to prohibit the disclosure of salaries of excellent engineers. Realistically, there is no other way besides salary increases, but companies should voluntarily consider improvement measures, and the government and political circles should also collaborate, according to President Kwon. He said, "Looking at doctoral students who moved to Silicon Valley in the U.S., Korean companies assign tasks that master's level employees could do, and even senior researchers often see little chance of becoming executives, which leads them to leave for the U.S.," adding, "With a personnel system that allows salary disclosure, it is difficult to attract talented individuals."

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