South Korea's involvement in an "anti-China" technology alliance will undermine the revenue of memory providers

South Korea's involvement in an "anti-China" technology alliance will undermine the revenue of memor

President Joseph Biden's recent visit to South Korea was intended, among other things, to encourage local authorities to join a technology alliance that had already united the US, Taiwan, and Japan, among other things, to confront China with technology together, but the high degree of dependence of Korean memory suppliers on the Chinese market has so far limited the country's commitment to accepting the existing terms of participation in the alliance.

SK hynix and Samsung Electronics not only have large operational and solid memory industries in China, but they are also heavily dependent on the local market. According to a publication quoted by Business Korea, the export of a chip of memory brought back $69 billion to Korean suppliers last year, China accounted for 48% of that amount. If Korean suppliers lose the confidence of Chinese clients as a result of the country's entry into a pro-Western alliance, Korean companies' export earnings will be the worst affected.

Looking at South Korea ' s export earnings in the range of semiconductor products, it reached $128 billion last year, with China accounting for about 39 per cent of that amount, and Hong Kong accounting for 60 per cent. Many experts argue that the US authorities will still be able to drag South Korea into this initiative, but the latter ' s government needs to minimize the damage to its economy due to the risk of losing some supplies to China.

The welfare of American authorities is also important for Samsung Electronics, which intends to build its second venture in Texas at a cost of $17 billion, but the American side requires applicants for government subsidies to accept a 10-year cap on investment in the Chinese economy.