The US “Chip Crusade” against China as regards to her chip imports is faltering. Out of the 4-alliance partners only USA and Japan are fully on board. Taiwan is half-hearted. South Korea is still outside the camp. Chip industry is key deriver for Seoul Korea and she does not want to upset it any more. China appreciates business strategy of her bosom trading partner.
Figures speak for themselves. Out of the major destination of South Korean exports China ranked first with a whopping US$ 158 billion. Next come USA with a share of almost two-third, at US$ 96 Billion. Interestingly the third and fourth countries are Vietnam and Hong Kong accounting for US$ 56.5 & 38.2 Billion respectively. The bottom line is China has an unshakable position because Honk Kong is also part of China.
To be precise, out of the South Korea’s exports of integrated circuits valued at US$ 116 Billion, China alone accounts for US$ 48 Billion and another US$ 20 Billion in Electronics that also use items of integrated circuitry. Continuing to innovate and upgrade electronics and chips, South Korean firms are giving a good fight to their counterparts in Taipei.
Key point of their difference must sink in. South Korea uses less American patented components in chip manufacture than in the case of Taiwan. Last year TSMC of Taiwan applied for patent registration from her own research numbering 519. Samsung of South Korea came second place with 217 such applications. True there is wide margin between South Korea and Taiwan in applied research in chip technology yet if South Korean firms join hands with their counterparts in China that could be a game changer. A viable business strategy is on the making.
For the start Semiconductor Manufacturing International Corporation (SMIC) of China can partner Samsung electronics. This can be followed through by three top notch chip companies in China namely HISilicon, Yangtze Memory Technologies and UniSoC Technologies joining hands with South Korean SKHynix, ITM Semiconductor and Jeju Semiconductor.
The emerging synergy would make both China & South Korea combo to beat Taiwan on the mat and by extension defeat the so called “Chip Crusade” of America!
Cheers!
Muthu Ashraff Rajulu
Business Strategist
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Business Strategist
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