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US sanctions against Russia to affect S.Korean chipmakers

Korean chipmakers will be affected by export controls that Washington imposed on Russia over the Ukraine crisis, but the impact is not likely to be significant, experts said Friday.

The U.S. Commerce Department announced new sanctions Thursday that it said will “severely restrict Russia’s access to technologies and other items that it needs to sustain its aggressive military capabilities.”

Items subject to the export control measures include semiconductors, computers and telecommunication and information security equipment, among others, the department said, calling them “sensitive items Moscow relies on for its self defense, aerospace and maritime industries.”

The measures restrict exports to Russia of any product that uses American technology or equipment, even if it is not produced in the United States.

As with most global chipmakers, Samsung Electronics and SK hynix rely on American technology, to some extent, to make semiconductors. They are the world’s two largest memory chip makers.

While the chipmakers will be affected by the technology control measures, their meager trade volume with Russia suggests that the impact will be minimal.

Korea’s chip exports to Russia stood at $74 million last year, which accounted for just 0.06 percent of the Asian country’s total outbound shipments.

The two chipmakers’ respective export data to Russia were not available.

Globally, Russia accounts for less than 0.1 percent of global chip sales, according to World Semiconductor Trade Statistics.

Still, the sanctions could slow down demand for chips, and by extension, consumer appliances and smartphones that use them, said Park Jae-gun, chairman of the Korean Society of Semiconductor & Display Technology.

“The sanctions will restrict exports of chips used in smartphones, laptops and data centers in Russia. Although the amount is not large, the export controls on electronic products could dampen chip demand,” he said.

The restrictions could cripple Samsung’s mobile business in Russia, as application processors for mobile phones are based on American technology.

Samsung was the leading mobile device vendor in Russia last year, accounting for around 26.6 percent of the market, closely followed by Apple, according to German market researcher Statista. The Korea Times

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