Ahead of President Yoon's US Visit, US Says "Korean Companies Should Not Supply Micron Replacement Volume to China"

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The White House of the United States has reportedly conveyed the position that if the Chinese government bans imports of Micron's semiconductors ahead of President Yoon Suk-yeol's state visit, South Korean semiconductor companies such as Samsung Electronics and SK Hynix should not replace those supplies.

According to major foreign media on the 23rd (local time), the Biden administration recently communicated this stance to the South Korean side during discussions about President Yoon's state visit. Multiple sources stated, "If Micron's exports to China are banned, the U.S. requested the South Korean government to restrain Samsung Electronics and SK Hynix from increasing their sales volume to China."

Earlier, the Chinese government launched an investigation on the grounds that Micron, the largest U.S. memory semiconductor company, could potentially harm China's security. If Micron is found guilty, it could face hefty fines as well as import bans. Last year, the Chinese region, including Hong Kong, accounted for 25% of Micron's sales.

[Image source=Reuters Yonhap News]

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Regarding this move by the Chinese government, the dominant analysis in the U.S. is that it is retaliation against the Biden administration's earlier advanced semiconductor export restrictions to China. Inside and outside the industry, there is speculation that the Chinese government might have judged that Samsung Electronics and SK Hynix's volumes could sufficiently replace Micron's share during the retaliation process. The White House's request is also interpreted in this context. Previously, the securities firm Bernstein had diagnosed that Samsung Electronics and SK Hynix could actually benefit from securing Micron's supply volume within China.

The White House's recent request is also seen as placing the Yoon Suk-yeol administration in a difficult position. In South Korea, concerns are already mounting that the long-term competitiveness of Korean semiconductors could weaken due to the U.S.-China conflict surrounding semiconductors. Major foreign media paid attention to the fact that the White House's request came at a sensitive time just before President Yoon's major state visit to the U.S. According to the South Korean presidential office, President Yoon and First Lady Kim Keon-hee will depart on the 24th for a 5-night, 7-day state visit to the U.S. This visit aims to strengthen the extended deterrence of the Korea-U.S. alliance on its 70th anniversary and to concretize economic security cooperation.

The U.S., which is openly excluding China by emphasizing so-called alliance-centered 'friend-shoring,' is known to have stressed the alliance even in the process of delivering semiconductor-related requests to the South Korean government. While the U.S. has repeatedly requested cooperation from allied countries to counter China's overt hegemonic ambitions in the Indo-Pacific region, this is the first time it has asked companies in those countries to play such a role citing the alliance. Both Samsung Electronics and SK Hynix operate sizable production plants in China, so significant repercussions are expected.

Micron declined to comment on the report. The White House stated that ahead of President Yoon's state visit to the U.S., the two countries have made historic progress in strengthening cooperation on national and economic security issues, including efforts to protect advanced technologies. The White House National Security Council (NSC) said, "This includes efforts to coordinate investments in the semiconductor sector, secure core technologies, and address economic pressure," and expressed expectations that "cooperation will be strengthened in all aspects through this state visit."

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