US Urges South Korea Not To Fill Micron Shortfall In China

Sergei Starostin semiconductor chip circuit board

US urges South Korea to tell companies not to make up for Micron exports to China if company is banned as result of security review

The US administration has asked South Korea to advise its chip manufacturers not to increase exports to China to fill a market gap if China bans US firm Micron from selling in the country, the Financial Times reported.

The US made the request as South Korean president Yoon Suk Yeol planned to travel to Washington, DC on Monday, the newspaper said, citing four unnamed sources.

China earlier this month launched a national security review into Micron, one of the three dominant suppliers of DRAM memory chips along with South Korea’s Samsung Electronics and Hynix.

Image credit: Micron chip, semiconductor
Planned Micron semiconductor plant in Boise, Idaho. Image credit: Micron

Major market

China is a major market for Micron, with the mainland and Hong Kong accounting for 25 percent of its $30.8 billion (£25bn) in revenues last year.

US officials and business executives see the Micron probe as retaliation for export controls levied on Chinese companies by the US last October.

The controls prevented US companies from selling high-end chips and semiconductor manufacturing equipment to China, leading to concerns from US executives about lost sales.

More recently the US brought Japan and the Netherlands into an agreement to also limit chip exports to China.

The US is also working on what’s known as the Chip 4 Alliance, which would include Taiwan and South Korea as well as Japan.

Chip 4 Alliance

The negotiations have put the three Asian countries in a sensitive position as China represents a major trading partner.

The US has also built restrictions into the $52bn Chips Act that restricts firms receiving those funds from expanding in China.