Korean chips cannot be sold and piled up like mountains. The three major mistakes made by Koreans should be paid back now

Ladies and gentlemen, please click in the upper right cornerFollowDon't miss out on exciting content, easy to view at any time.Wen | Da He You LiaoEditor | Big Core with MaterialsOn a global scale, there are only a few countries with developed semiconductor industries, and South Korea can be considered one of them

Ladies and gentlemen, please click in the upper right cornerFollowDon't miss out on exciting content, easy to view at any time.

Wen | Da He You Liao

Editor | Big Core with Materials

On a global scale, there are only a few countries with developed semiconductor industries, and South Korea can be considered one of them. However, the semiconductor industry in South Korea is not as prosperous as before, thanks to the three major mistakes made by South Korea.

When the United States imposed chip sanctions on China, South Korea without hesitation sided with the United States and urgently cut off semiconductor supply in China, in order to suppress China's semiconductor industry. This decision by South Korea has now made it taste the bitter fruit.

After losing the huge export market of China, South Korea's semiconductor exports have sharply declined. However, they have not yet realized the reality and are still increasing production, thinking that this can escape difficulties, as if waiting for our country to yield and beg for help from them.

But this may disappoint the Koreans, as they have no brains to follow the great mistake made by the United States when imposing sanctions on China. It is also time for them to repay their debts!

One of the mistakes made by South Korea

One of the mistakes made by South Korea

South Korea was once confident and believed that following in the footsteps of the United States would result in generous returns and even gain a place in the competition between China and the United States.

South Korea, which did not fully recognize the reality, resolutely chose to join the sanctions in order to catch up with American fathers and eat leftovers. Not only did it restrict the export of high-end chips to China, but it also spontaneously closed many factories located in China.

But what they didn't expect was that the retribution came so quickly.

As of September this year, South Korea's chip exports have been declining for a full nine months. In the first ten days of September alone, the export volume decreased by 28%. Even semiconductor giant Samsung's revenue has sharply declined by 96% this year.

What is even more painful for South Korea is that after Samsung invested and built a factory in the United States, the United States immediately ruthlessly attacked Samsung as soon as it saw the leeks grow into its own land. Without knowing about this, Samsung turned around and received a fine of 400 billion won from the United States.

It should be noted that after losing the Chinese market, Samsung's quarterly profit was only 600 billion Korean won, and the fine imposed by the United States was almost twice Samsung's entire quarterly profit, exacerbating the dilemma faced by the Korean semiconductor industry.

The reason why the United States dares to engage in trade and technology wars with China is because they hold numerous technology patents and stand at the pinnacle of the global industrial chain, while what about South Korea?

In fact, semiconductor giants such as Samsung and SK Hynix in South Korea emerged with the support of the United States in the last century.

Now they are like Japan back then, with a thriving semiconductor industry but lacking core technology. In the eyes of the United States, they are just a "foil" and have no competitiveness.

As early as the rise of the semiconductor industry in these years, the United States has already taken the lead in formulating clear division of labor and cooperation globally based on its patent advantages:

The United States is responsible for chip design with the highest profit, while the Netherlands provides advanced lithography technology for chip manufacturing. At the specific production stage, it is transferred to TSMC in Taiwan, China, China. The advantages of South Korea's chip industry are mainly concentrated in the storage field. Compared with other countries, South Korea's advantages are insignificant.

The sanctions imposed by the United States on Huawei indicate that they do not want to see the rise of another global industrial chain, and the use of technology lockdowns to suppress Huawei's behavior is because Huawei's rise directly affects the fundamental interests of the United States. If Huawei is allowed to continue to develop and grow, the United States will lose its dominant position at the top of this high profit industrial chain.

With the establishment of the "Four Party Alliance for Chips" in the United States, the upstream supply chain of the chip industry in the United States, South Korea, Japan and Taiwan, China's TSMC has been integrated together to cut off the chip supply to China.

What's more shameless is that the United States has also promised all parties that if these companies withdraw from the market in Chinese Mainland and transfer to the United States for investment, they will be given various high subsidies. But there is no free lunch in the world. South Korea did not expect that the commitment of the United States would also cost them a lot.

These companies moving to the United States must sell trade secrets such as customer lists and core technologies to obtain subsidies. For Samsung, this means not only giving up the Chinese market, but also paying a high price, and even being fined for stabbing in the back.

The current situation faced by Samsung in South Korea reminds people of a proverb:Seeking skin from a tiger is hard to escapeIn this semiconductor industry drama, South Korea seems to have become the biggest 'victim'.

The Second Mistake Made by South Korea

The second mistake made by Koreans is that they underestimated the determination of the Chinese people!

In 2018, the smoke of the Sino US trade war rose, and Trump wielded the hammer of trade sanctions. Western countries launched an offensive against China's semiconductor industry. Against this backdrop, unexpected things happened, and South Korea did not hesitate to choose to impose restrictions on China's chip import and export.

Perhaps in South Korea's vision, they believe that in the case of a comprehensive blockade of chip supply lines, China will be unable to continue moving forward and will ultimately have to yield to South Korea.

This is not aimless shooting, but speculation based on some kind of reality. According to official data from the South Korean government, the bilateral trade volume between China and South Korea reached 2.8 trillion won in 2017, of which China's imports of chips from South Korea accounted for a significant share.

Therefore, South Korea is full of confidence and firmly believes that it holds the power of life and death in the Chinese semiconductor industry, which also provides a solid foundation for their decision-making.

However, reality often differs from imagination. China has already recognized its own shortcomings and has not hesitated to fill this gap. Although China's scientific research level is gradually emerging internationally, in the semiconductor field, due to long-term pressure from Western countries, we have been unable to conquer the key technology of advanced chips.

Advanced chips play a crucial role in today's world, not only in military, scientific research, commercial and other fields, but also directly related to national core competitiveness. In the past, we could only obtain these key technologies from countries such as Japan, South Korea, and the United States through imports, which is a weakness that we have to face.

It was precisely because of the clear understanding of China's weak link at that time that South Korea embarked on the path of sanctions against China without hesitation, in order to demonstrate its absolute loyalty to the United States.

However, what South Korea did not expect was that they became the first party to collapse in the trade war.

The latest statistics are shocking, as South Korea's chip inventory rate has skyrocketed to 265%! This means that South Korea has a huge backlog of chips but cannot find a way out for sales.

The Third Mistake Made by South Korea

The third mistake South Korea made was not recognizing its own position!

In the eyes of some Koreans, they view themselves as the center of the universe. Looking back at modern Korean history, it can be seen that during World War II, South Korea followed Japan's invasion of China and was ultimately driven away by the Chinese people who firmly resisted.

In the Korean War, South Korea once again followed the United States and the United Nations to confront the volunteer army, but suffered another defeat. Now, South Korea blindly follows the United States to impose sanctions on China, dreaming that China will bow to them, but the outcome is destined to not be too different.

The fundamental reason for this mistake is that their confidence and arrogance prevent them from accurately evaluating their actual strength, and they do not understand their position in the competition among major powers. Simply put, it's just that our strength cannot support our dreams.

It is true that at the beginning of the restrictions on the import of advanced chips, Chinese enterprises did experience a difficult period, but at the same time, it also awakened our awareness and once again deeply recognized the importance of "self-reliance".

Not long ago, Huawei released a brand new smartphone equipped with self-developed 7-nanometer level chip technology. This news not only stunned domestic audiences, but also shocked South Korean chip companies.

Some predict that once China's 7-nanometer chip technology meets market standards, as a major importer of chips, China will significantly reduce its dependence on foreign chips.

This trend has begun to manifest:In the first half of this year, China's foreign chip import expenditure decreased by $33.3 billion compared to the same period in 2022. Since 2022, China has reduced its import volume of over 140 billion chips.

Here, South Korea finally realizes that no matter how much they lobby or how many chips are piled up in the warehouse, these can only become dust.

Nowadays, the stock prices of Korean chip companies have been falling all the way, and Korean media have to admit that:We made an extremely serious mistake. But in reality, there is more than one mistake made by Koreans?

With the emergence of domestically produced chips in China, the position of Korean chips in the Chinese market will become increasingly lacking!

epilogue

Overall, South Korea's decisions in the semiconductor industry have indeed had a significant impact, as their choices have to some extent lost opportunities in the vast market of China. However, if they exit the market and want to enter again, they will undoubtedly face enormous difficulties, especially now that they have lost their technological advantages.

The semiconductor industry plays an important strategic role in South Korea's economy. If this pillar industry is severely impacted, it will have a profound impact on South Korea's economic landscape. In the future, South Korea may have to find new economic growth points to adapt to global economic changes. As for the final outcome, we can only wait and see.

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