Samsung veteran sounds alarm on S Korea dropping a worldwide chip battle

In three many years at Samsung Electronics Co., Yang Hyang-ja helped form the 84-year-old conglomerate’s current dominance in world reminiscence chipmaking. Now, she’s taking over a far broader problem: making certain Korea stays related because the US and China combat over semiconductors.

Yang, who rose from a researcher’s assistant on the storied firm earlier than heading the important thing reminiscence chip improvement division, is the lead architect of a nationwide effort to fund and impress its home chip business. Her mission is surging in significance because the US, China and Japan pour billions into increase their very own chip provide chains, clouding Korea’s future position in semiconductors, she advised Bloomberg Tv.

It’s a matter of nationwide safety, she stated, echoing the views of these in Washington and Beijing who’re funneling expertise, cash and coverage assist into the event of the slivers of silicon powering future applied sciences from synthetic intelligence and the metaverse to next-generation computing and — notably — navy functionality.

“We’re in a chip battle,” Yang stated in a December interview. “Expertise supremacy is a method that our nation can take the lead in any security-related agenda, equivalent to diplomatic and protection points, with out being swayed by different nations.”

Yang, who leads a 13-member particular committee President Yoon Suk Yeol’s ruling occasion fashioned this yr to brainstorm an answer, has argued that solely by robust and direct intervention can Seoul broaden its place within the $550 billion world semiconductor business. She’s one in all a rising variety of world coverage makers who’ve embraced tech protectionism after pandemic-driven logistics snarls highlighted nations’ dependence on each other for key digital elements. She’s gained an ally in Yoon, who has joined Yang’s requires extra insurance policies to assist the nation’s homegrown chip sector, which incorporates SK Hynix Inc. in addition to Samsung.

However her efforts have fallen brief. Final month, parliament handed Korea’s model of the US Chips Act. Spearheaded by Yang, the transfer expedites the approval course of to construct factories within the metropolitan space, whereas growing the variety of tech-specialized faculties. Individually, parliament handed a invoice providing a tax credit score of 8% to large companies investing in semiconductor manufacturing, far smaller than Yang’s proposal of 20% to 25%.

Yang Hyang-ja

Yang Hyang-ja

These gestures which are a far cry from the billions of {dollars} in subsidies that different nations are committing to chip manufacturing, stated Yang, including that short-term political pursuits are blinding fellow lawmakers on the Nationwide Meeting. A few of her friends have argued, in flip, that overly beneficiant incentives threatened authorities funds and would solely profit large firms.

Extra Korean firms might transfer their main manufacturing services to the US, and take their finest engineers with them, she stated. Samsung plans to construct a $17 billion semiconductor plant in Texas, and has floated the potential of spending virtually $200 billion on a sequence of vegetation in Austin and Taylor.

Korea has a novel alternative to counter this development, Yang stated. Taiwan — the place Taiwan Semiconductor Manufacturing Co. is predicated — produces nearly all of modern chips controlling the most recent iPhones, servers and supercomputers. That’s triggered calls worldwide to diversify manufacturing away from an island that China claims and has threatened to invade.

“Samsung is the one firm on the earth that may fill in for TSMC,” stated Yang.

Yang, who first joined politics in 2016 on the encouragement of former President Moon Jae-in, has led the present ruling occasion’s particular committee on semiconductors. She’s an impartial lawmaker after leaving the Democratic Celebration in 2021 amid criticism about her response to a sexual assault case in opposition to one in all her aides, who was additionally a relative. Yang later apologized. A police investigation yielded no expenses in opposition to the lawmaker.

Chip coverage immediately takes up her time. Escalating sanctions on superior know-how are placing elevated stress on the nation to decide on between the US, its safety ally, and China, its largest commerce accomplice. Each have requested South Korea to broaden chip manufacturing partnerships.

However Seoul has sidestepped specific feedback relating to its dedication to the Biden administration’s sanctions on exports of US-affiliated knowhow to China.

That delicate state of affairs highlights the necessity for Korea to construct its personal home technological capabilities — or threat rising ever extra beholden to overseas powers, Yang stated.

That is the time to supply Korean firms extra incentives to construct manufacturing capability at house, slightly than overseas, Yang stated. The nation must do extra to maintain younger expertise, she stated.

“How else would our nation survive?” she stated. “It’d change into a brand new technological colony.”