Choi Tae-won: "Too Early to Judge Pros and Cons of IRA and Semiconductor Law... Also Preparing for US-China Taiwan Conflict"

"Finding the Direction to Survive Is the Most Important"

[Image source=Yonhap News]

[Asia Economy Reporter Oh Hyung-gil] Chey Tae-won, chairman of SK Group, revealed that he is formulating management plans considering even the possibility of a military conflict over Taiwan between the United States and China.

Regarding the impact of the Inflation Reduction Act (IRA), which emphasizes production within the United States, and the Chips and Science Act (CSA) on Korean companies, he said it is necessary to observe further.

At a press briefing held in Washington DC on the 21st (local time), Chairman Chey stated, "The most important virtue at present is to find a way to survive regardless of which scenario unfolds," adding, "(The Taiwan conflict) is naturally being reviewed and is included among the worst-case scenarios."

He added, "It would be better to ask companies in Taiwan (about countermeasures). They probably feel the threat more than we do. We are preparing by benchmarking them."

Regarding the impact of U.S. semiconductor equipment export controls on SK Hynix's business in China, he said, "Honestly, if such equipment cannot enter China, the factories will continue to age and upgrading will become difficult. If aging causes problems, we will have no choice but to invest elsewhere or build new factories."

When asked whether the China investment might be reduced due to U.S.-China tensions, he replied, "My actions are based on scenario planning ranging from very extreme cases to maintaining the status quo," adding, "I consider it a probability game."

On the industrial impact of U.S.-China conflicts, he emphasized, "In the past, the whole world was one market, but now decoupling is occurring, and markets are splitting. Since China accounts for about 25% of our exports, suddenly abandoning this market is something the economy cannot bear."

He continued, "We need to prepare survival measures in a world where our country is undergoing such decoupling," stressing, "It is unreasonable for companies to solve this alone; broader choices, support, and cooperation from the government are necessary."

He argued, "The occurrence of such events ultimately means the world is decoupling, and depending on the speed, depth, and which parts are emphasized more, the risks to us could be greater or the opportunities could be larger."

He added, "Since this is unfolding, it is difficult to definitively say whether it is advantageous or disadvantageous to us," and said, "If conditions become more specific, I can say something, but right now I cannot say it is completely good or bad."

Chairman Chey recalled that during a video meeting with President Joe Biden in July, he was asked, 'What should be done to attract more investment to the United States?' and he responded, "A lot of effort should be made to enhance the competitiveness of manufacturing labor." He also mentioned that President Biden, who had contracted COVID-19 before the meeting and could not meet in person, apologized and that they agreed to have lunch together at the White House next time there is an opportunity.

When asked whether massive overseas investments might lead to relatively neglecting domestic investment and job creation, he explained, "The total investment plan is 250 trillion won by 2030, with overseas investment amounting to about 70 trillion won due to exchange rate increases, and the rest is all domestic investment."

He added, "Overseas investment is essential for domestic investment to survive," and said, "The semiconductor investment announced for the U.S. mainly involves new technologies such as research and development, software, and advanced packaging, which do not exist in Korea. By investing here and internalizing these, we will continue to have the capacity to invest domestically as well."

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