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South Korea to ask US to let chip makers keep investment in China

South Korea will try to persuade the US to let its chip makers in China retain current levels of semiconductor investment, a news report said, as Washington prepares to roll out further provisions to prevent investment flowing into China.

The basic purpose of the so-called guardrail provision is to prevent companies that receive US subsidies from conducting business in countries of concern, Yonhap News reported on Tuesday, citing foreign ministry officials. South Korean officials are discussing various ways for its country’s companies already investing in China to avoid harm, the officials told Yonhap.

South Korean companies won a one-year reprieve from sweeping US export controls unveiled in October that prevent chip makers from bringing in equipment for their advanced facilities in China. Without a licence extension, it is unclear how Samsung Electronics and SK Hynix would proceed – both depend on China as a key market and a manufacturing site for their memory chips.

The Biden administration is seeking help from its global partners to impose sweeping curbs on the sale of advanced chips equipment to China in a policy aimed at preventing the country’s progression in a range of cutting-edge technologies that could threaten America’s status as the world’s pre-eminent power.

The so-called Chip 4 Alliance of the US, South Korea, Japan and Taiwan held a video conference on February 16 to discuss an early warning system to ensure a steady chip supply, while holding off on discussions concerning export controls.

The US, Japan and South Korea also held a separate economic security dialogue on Monday to discuss semiconductors and other advanced tech issues. South China Morning Post

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