| U.S. President Joe Biden holds up a silicon wafer in a virtual meeting with chip industry executives at the White House on April 12, local time. Yonhap |
By Kim Bo-eun
The government is facing growing calls to stand up to the U.S.'s “undue” demand for Korean semiconductor manufacturers to reveal key business information, so as to protect local companies involved in the sector.
Industry sources and experts claim that giving up such data could undermine local players' bargaining power and end up hurting their competitiveness in the global market.
The calls come after the U.S. Commerce Department's moves to possibly use the Defense Production Act (DPA) as a means to deal with the yearslong shortage of automotive chips in the United States.
If Washington actually initiates a DPA protocol, then all semiconductor firms which have operations in the U.S. are mandated to submit specific information regarding their supply chains.
U.S. Commerce Secretary Gina Raimondo said the DPA could be invoked to compel semiconductor companies to provide information if this wasn't done voluntarily, implying the chip firms are in fact being coerced.
The demand is widely seen as an excessive form of intervention in the market, which should be left to deal with shortages according to principles, something the U.S. has so far championed.
For major semiconductor companies such as Samsung, opening up confidential information would expose it to vulnerabilities.
Samsung is the world's top memory chipmaker and only trails Taiwan's TSMC in the booming foundry (contract-based chip manufacturing) market. The U.S. commerce department is seeking to secure information from not only the chipmakers that attended several recent White House meetings, but all players in the industry, which would force Korea's SK hynix, the world's second-largest memory chip manufacturer, to share such data as well.
The recent White House meeting ― the third ― was presided over by Raimondo and participated in by representatives from Intel, Samsung, TSMC and GM. The meeting was intended on coming up with measures to alleviate the auto chip shortage U.S. carmakers are suffering from. But the specific data requested from chipmakers is regarded as highly sensitive information that companies do not voluntarily disclose.
Experts and analysts say the demand from the White House is seen in a larger context as a means to quantify the global supply chain for semiconductors, and allow the U.S. to regain its lead in the sector, which it has lost to major players in Asia, such as Korea and Taiwan over the past decades.
Washington has also sought to bring production facilities of major companies, not only in the semiconductor industry but also in the electric vehicle battery sector, to the U.S. as a way of securing a stable supply of these items, which it now considers as a national security concern.
“The government should not stay idle, given the chip sector is a matter of competitiveness on a national level,” one source said.
Another industry source also highlighted that because of the confidential nature of supply chain-related information, revealing this will affect a company's negotiating power.
"This has provided relevant business sectors a lot to think about," another industry source said. "Giving up such information can undermine bargaining power, as it could be exposed to clients, competitors and partners.” Given the uncertainties of how the U.S. government will proceed with the “voluntary” request, Cheong Wa Dae may need to speak out if necessary.
On a related note, one section of a survey of companies on the U.S. Federal Register, the daily journal of the American government, asks: "For the semiconductor products that your organization sells, identify those with the largest order backlog. Then for the total and for each product, identify the product attributes, sales in the past month, and location of fabrication and package/assembly."
Another part requires a list of "each product's top three current customers and the estimated percentage of that product's sales accounted for by each customer."