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Korea must grow from grass to tree in U.S.-China chip war era

Korea must grow from grass to tree in U.S.-China chip war era

Posted February. 28, 2024 07:37,   

Updated February. 28, 2024 07:37


There's a reason for Intel, the American semiconductor company, to make bold claims about surpassing Samsung as the second-largest foundry by 2030. Just as a good rice cooker is needed to make delicious meals, success in mass-producing advanced 2-nanometer process semiconductors requires the next-generation "High NA (Numerical Aperture) Extreme Ultraviolet Lithography (EUV)" equipment made by the Dutch company ASML. The problem is that this equipment is only produced in 20 units each year.

During his state visit to the Netherlands in December last year, President Yoon Suk Yeol and Lee Jae-yong, the chairman of Samsung Electronics, visited ASML in a careful effort to secure the next-generation EUV, but the Dutch company chose the United States. Intel, the first in the industry to secure this equipment, declared a "Chip War," saying it would mass-produce 1.8-nanometer process semiconductors by the end of the year and 1.4-nanometer semiconductors like Taiwan's TSMC and Korea's Samsung by 2027.

"Currently, Asia takes up an 80% manufacturing share, and we need to recoup 50% of it back in the Western world," Intel CEO Pat Gelsinger said, signifying the importance of semiconductors as more than an industry. "For 50 years, global politics has been dominated by where oil comes from. Now, chips are the new oil.” The United States has enforced a new law to promote investments for chipmakers, and Japan has granted 10 trillion won for two TSMC plants in the country; it should take more than such a myopic approach that considers ‘chip war’ merely as rivalry between major chipmakers – including TSMC, Intel, and Samsung – and views subsidies for chipmakers as ‘splurging for the big tech’ to truly understand the intentions behind those semiconductor powerhouses.

During the COVID-19 crisis, Americans experienced the embarrassment of not having factories capable of producing proper face masks, resorting to covering their faces with scarves, reminiscent of the Spanish flu era over a hundred years ago. Witnessing disruptions in the automotive semiconductor supply chain resulting in delayed new car releases and a sharp rise in prices for used cars, they keenly felt America's Achilles' heel despite being the world's strongest. Behind President Joe Biden's declaration of revitalizing the semiconductor industry as the "21st-century steel" lies a strong desire to overcome Americans' trauma from the collapse of manufacturing.

Thanks to shale gas, the United States became the world's largest energy producer in 2018. When tensions escalated in the Middle East in 2019, then-President Donald Trump argued, "Why should we protect maritime routes for other countries without any compensation?" and said, "Since the United States has become the world's largest energy producer, there is no need for us to be there." If Trump, who declared "energy independence" to reduce dependence on Middle Eastern oil and openly showed a tendency toward "neo-isolationism," returns to power and grasps semiconductor supremacy, the United States could further make its "America-first" moves without any inhibitions.

Taiwan's semiconductor is dubbed “Silicon Shield” because there is a belief that the Western world, including the United States, will not tolerate China's military aggression so long as the world economy relies on Taiwanese semiconductors. The United States is also worried about a pro-China administration in Taiwan. However, the situation could change if the United States succeeds in semiconductor independence. America’s "Taiwan calculation" could take a different turn, leading to potential changes in the security landscape of East Asia.

James Carafano, the Vice President of the conservative think tank Heritage Foundation, said in a New Year's interview with The Dong-A Ilbo, "The U.S.-China conflict is essentially an 'elephant fight' in its nature. If small countries sandwiched in the middle want to survive without being trampled like 'grass,' they must grow into trees, not grass. Korea needs to become a bigger tree." In the era of the chip war, being grass that anyone can trample on is not an option. We must further enhance the competitiveness of the semiconductor industry and strengthen the trilateral semiconductor alliance among the United States, Japan, and Korea. One must ask: Are we merely grass or cultivating a tree of semiconductors?