China Expresses Willingness to Cooperate with South Korea Amid US-China 'Semiconductor War'

As the semiconductor war between the United States and China continues, China has expressed its willingness to cooperate with South Korea. This marks the first time China has reached out to South Korea on semiconductor issues.

On the 26th (local time), the Chinese Ministry of Commerce released a statement highlighting semiconductor cooperation between the two countries after Wang Wentao, Minister of Commerce of China, met with Ahn Deok-geun, Director-General for Trade Negotiations at South Korea’s Ministry of Trade, Industry and Energy, at the APEC Trade Ministers' Meeting held in Detroit, USA.

The Ministry of Commerce specifically stated that “both sides (China and South Korea) agreed to strengthen dialogue and cooperation in the semiconductor industry network and supply chain sectors.”

South Korea’s government took a slightly different stance. The Ministry of Trade, Industry and Energy explained in a press release that “Director-General Ahn requested China’s attention and support to facilitate trade and stabilize the supply of key raw materials and components.”

Unlike China’s emphasis on strengthening cooperation in the semiconductor sector, South Korea focused on supply chain cooperation, including minerals, raw materials, and components with high dependency on China, such as secondary battery materials. Given that South Korea mentioned cooperation centered on supply chains, some analysts interpret China’s unilateral release of a statement claiming “both countries agreed” on semiconductors as an overreach.

Press releases issued by countries after diplomatic events are generally carefully coordinated in wording. Considering this, China’s emphasis on semiconductor cooperation without prior consultation indicates its urgent need to maintain cooperation with South Korea.

One reason for this urgency is the pressure from the United States. The U.S. is tightening its grip on China through a “decoupling” strategy that excludes China from the advanced semiconductor industry supply chain. Efforts to involve Japan and the Netherlands in semiconductor equipment and material supply chains can also be seen in this context.

Recently, China has been sanctioned from purchasing products from the American memory semiconductor company Micron due to security concerns, which has significantly influenced China’s reliance on South Korean memory companies such as Samsung Electronics and SK Hynix.

However, the U.S. has warned that South Korean memory companies should not fill the gap left by Micron. On the 23rd, Mike Gallagher, Chair of the U.S. House of Representatives’ “U.S.-China Strategic Competition Special Committee,” stated, “South Korea, an ally that has directly experienced China’s economic coercion in recent years, must act to block filling the void left by Micron.”

The more desperate side is China. If China fails to secure cooperation from South Korea, a semiconductor powerhouse, amid the intensifying semiconductor war with the U.S., it will not be able to secure competitiveness in future industries.

Wang Wentao, Minister of Commerce of China, emphasized, “China hopes to deepen bilateral trade and investment cooperation with South Korea, safeguard the stability of industrial and supply chains, and elevate cooperation at bilateral, regional, and multilateral levels in economic and trade fields to a new level.”