U.S. Export Ban on China-Bound HBM Chips Sparks Mixed Reactions in South Korean Chip Industry.

Seoul: The U.S. government's recent decision to impose restrictions on the export of artificial intelligence (AI) memory chips is creating a stir in the South Korean chip industry. Experts suggest that while the move could potentially benefit South Korean chipmakers by hindering China's semiconductor progress, it might also lead to reduced demand in China, the world's most populous market.According to Yonhap News Agency, the U.S. Commerce Department announced new semiconductor controls on Monday, implementing a ban on sales of high bandwidth memory (HBM) chips to China, alongside an embargo on chipmaking equipment. The restrictions specifically target second-generation HBM2 chips and more advanced models destined for China. Currently, South Korea's SK hynix Inc. and Samsung Electronics Co., along with U.S.-based Micron Technology Inc., are the leaders in the HBM market, having introduced the latest fifth-generation HBM3E earlier this year.Industry insiders expect the immediate impact on SK hynix and Samsu ng Electronics to be limited due to their relatively low reliance on the Chinese market. In the long run, some experts predict that the U.S. restrictions could slow China's semiconductor advancements, thereby offering opportunities for South Korean companies. Kim Hyeong-joon, head of the Next Generation Intelligence Semiconductor Foundation, noted that the U.S. measures could delay China's semiconductor development, allowing South Korean firms to extend their lead over Chinese competitors.Prof. Kwon Hyuk-jun from the semiconductor engineering department at Daegu Gyeongbuk Institute of Science and Technology highlighted the potential challenges for China in developing its own HBM chips under the U.S. embargo. He suggested that the U.S. containment policy might ultimately benefit South Korea. However, experts also expressed concerns about the implications of China's significant role as a buyer of memory chips and chipmaking equipment. Kim, from the semiconductor foundation, pointed out that the embargo might become less favorable if the market contracts.Prof. Kwon emphasized the risk of over-dependence on the U.S. market, urging South Korean companies to diversify their client base as the global market faces potential shrinkage due to restrictions on sales to China.