US Undersecretary of Commerce for Industry and Security Alan Estevez, as noted by The Korea Herald, recently approached South Korean companies Samsung Electronics and SK hynix to limit their supply of HBM memory to China. The official calls on the South Korean side to accept other restrictions regarding China.
Image Source: SK Hynix
Estevez stressed that South Korean companies should supply HBM for the benefit of allies, not countries that are considered unfriendly. The degree of dependence of South Korean companies on China specifically in the sphere of HBM supplies is difficult to reliably establish. It is only known that Samsung and SK hynix together control about 90% of the global market for HBM-class chips, but they supply the older HBM2 and HBM2E to China, and not the more advanced HBM3. Since Chinese developers do not actively use even HBM2 and HBM2E, the share of the Chinese market in their supply structures is unlikely to exceed a few percent.
However, South Korea’s sanctions against China may have more unpleasant consequences. South Korean companies supply other types of memory chips to China quite actively; in this area, their dependence on the Middle Kingdom can already be measured by several tens of percent of total revenue. The South Korean Ministry of Commerce takes a balanced approach to imposing sanctions against China, but is ready to consult with the United States on this topic. Samsung’s overall revenue was dependent on China by 16.1% in the first half of this year. If the Chinese side, in response to sanctions, blocks the supply of some Samsung products to China, then the Korean company could suffer significantly. Moreover, the American Micron Technology already has sad experience in this area.
The US authorities are simultaneously calling on their South Korean partners to limit supplies to China of equipment and technologies that make it possible to create transistors with an ambient gate (GAA) and develop quantum computing. The Netherlands this month agreed, at the request of the United States, to limit supplies to China of two more models of ASML lithography scanners, which were quite popular in that country. Now the US authorities want to synchronize their efforts to curb the technological development of China with South Korea.