China Says it Will Strengthen Chip Ties With South Korea

 

China’s commerce minister said on Saturday that China and South Korea have agreed to strengthen dialogue and cooperation on chip industry supply chains.

The statement came after the Chinese commerce chief Wang Wentao met with South Korean Trade Minister Ahn Duk-geun on the sidelines of the Asia-Pacific Economic Cooperation (APEC) conference in Detroit on Friday.

The ministers exchanged views on maintaining the stability of the industrial supply chain and strengthening cooperation in bilateral, regional and multilateral fields, according to a statement from the Chinese Ministry of Commerce on Saturday.

 

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Wang also said that China is willing to work with South Korea to deepen trade ties and investment cooperation.

However, a South Korean statement on the same meeting did not mention chips.

Instead, it said the country’s trade minister had asked China to stabilise the supply of key raw materials, and asked for a predictable business environment for South Korean companies in China.

“The South Korean side expressed that communication is needed between working-level officials over all industries”, not just for semiconductors, a source with knowledge of the matter said.

South Korea is in the crosshairs of a tit-for-tat row between China and the United States over semiconductors, sparked by Washington’s sanctions on exports of advanced chips and chipmaking equipment to the world’s second-largest economy.

About 40% South Korea’s chip exports go to China, according to trade ministry data, while US technology and equipment are necessary for South Korean chipmakers Samsung and SK Hynix.

The two chipmakers have the opportunity to further step up their sales to China, in the face of Beijing’s recent ban on US chipmaker Micron Technology from selling to key local infrastructure companies.

The US, however, has urged South Korea to not fill the chip gap that the Micron ban will leave in China. Seoul, on the other hand, has said it will leave the final decision on Samsung and SK Hynix.

On Friday, the top Chinese delegate to South Korea said relations between the two countries were “not good” and faced the “risk of further deterioration,” according to a report by the South China Morning Post.

 

• Reuters, with additional inputs from Vishakha Saxena

 

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