US chip actions impacting industry

Revenues and profits of some overseas chip manufacturers have contracted significantly of late as the United States pushes for decoupling and severing supply chains to and from China, an official said on Thursday.

At a news conference on Thursday, Shu Jueting, spokeswoman of the Ministry of Commerce, made the comment on a news report about the US demanding that South Korea not fill any market gaps in China, adding that China is firmly opposed to such misconduct by the US as it represents typical bullying in the technology sector.

Such practices cause serious disruptions to normal economic and trade exchanges among enterprises, break market rules, sabotage international economic and trade order and threaten the security and stability of the global industrial chain supply chain, Shu said.

Pan Helin, co-director of the Digital Economy and Financial Innovation Research Center at Zhejiang University's International Business School, said the US government has already adopted a series of well-calculated approaches to curb China's fast-growing chip sector.

The latest move shows Washington also wants to coerce Seoul to follow its moves, which would only further weigh down the global chip industry chain, Pan said.

As the world's largest chip market, the Chinese mainland consumes more than half of the world's semiconductors, which are then assembled into tech products to be reexported or sold in the domestic market, according to research company Daxue Consulting.

South Korean chipmaker SK Hynix registered an operating loss of 3.4 trillion won ($2.5 billion) in the January-March quarter. Revenue tumbled 58.1 percent year-on-year to 5.09 trillion won over the period, according to the company's regulatory filing on Wednesday.

SK Hynix is the world's second-largest DRAM maker. DRAM chips are flash memory components used in smartphones, personal computers and servers. It is a major competitor of US chip company Micron, whose products sold in China are under cybersecurity review.

In February, Kevin (Jongwon) Noh, president of SK Hynix, met Minister of Industry and Information Technology Jin Zhuanglong, head of China's top industry regulator, in Beijing to exchange views on deepening cooperation.

Samsung Electronics, a leading semiconductor maker in South Korea, announced a preliminary first-quarter operating profit of 600 billion won earlier this month, down 95.8 percent from the same quarter last year.

Shu added that the US has overstretched the concept of national security and abused such measures as export controls in recent years, even at the expense of allies' interests. It has pressured certain countries to take trade-protectionism acts through coercion to seek decoupling or intentionally cut supply chains.

She called on governments and enterprises in affected countries to work together to defend free trade rules for their own long-term interests, and to jointly build a safe and stable, smooth and efficient, open and inclusive and mutually beneficial global industrial and supply chains.