Assembly should pass semiconductor promotion bill
Lawmakers of the ruling and opposition parties have taken flak for causing a special bill promoting the domestic semiconductor industry to languish at the National Assembly amid rising partisan conflicts. Despite rapid changes in global semiconductor industry conditions, they have yet to deliberate on the bill which was submitted in August. The Yoon Suk-yeol administration earlier unveiled plans to make the nation a semiconductor superpower. Yet such plans risk falling apart if the bill remains sidelined.
The semiconductor industry, a mainstay of the national economy, has been experiencing growing difficulty buffeted by diverse challenges at home and abroad. The administration of U.S. President Joe Biden announced a set of measures Friday to curb the sale of chips made using U.S. technology and equipment to China to prevent Beijing from using them for military purposes, in a bid to contain the Asian giant.
Domestic chipmakers, such as Samsung Electronics and SK hynix, may be affected by the U.S. move, although its impact is considered limited. They will be required to receive permission from the U.S. to sell semiconductor equipment or chip products. The Ministry of Trade, Industry and Energy is downplaying the impact, saying that consultations with the U.S. were made in advance to protect the companies' interests. Yet it is not proper to be too optimistic.
The strategic rivalry between the U.S. and China is likely to intensify, prompting the Yoon administration to step up its diplomatic leverage toward the two nations. It should not repeat the same mistakes as seen in the U.S. legislation of the Inflation Reduction Act, which will exclude Korean-made electric vehicles from tax subsidies. Domestic EV makers have begun to feel the heat as their sales plummeted after the legislation was made in August.
Taiwan Semiconductor Manufacturing Company (TSMC) is presumed to have overtaken Samsung Electronics in chip sales. It registered a forecast-beating 613 billion Taiwan dollars (27.5 trillion won or $19.2 billion) in sales in the third quarter, up 48 percent from a year ago. The firm appears to have snatched the global top spot in chip sales for the first time, edging out Samsung Electronics.
In contrast, Samsung suffered an earnings shock in the same period. Its operating profit in the third quarter plunged 31.7 percent to 10.8 trillion won ($7.6 billion) from a year before. TSMC has continued to enjoy robust growth, boosted by generous support from the Taiwanese government including tax incentives, a well-developed infrastructure and R&D grants. Samsung is poised to fortify its prowess in the foundry sector to tackle the current hardship by making massive investments in the production of 1.4-nano products by 2027.
Yet Samsung's endeavors will unlikely bear fruit unless they are backed by government assistance. Accounting for 20 percent of the nation's total exports, the semiconductor industry is the pillar of the Korean economy with its importance growing in the area of economic security. It is time to have a sense of urgency and offer more support to chipmakers. Or else the semiconductor industry will lose its competiveness and may collapse suddenly.
Lawmakers of the ruling and opposition parties have taken flak for causing a special bill promoting the domestic semiconductor industry to languish at the National Assembly amid rising partisan conflicts. Despite rapid changes in global semiconductor industry conditions, they have yet to deliberate on the bill which was submitted in August. The Yoon Suk-yeol administration earlier unveiled plans to make the nation a semiconductor superpower. Yet such plans risk falling apart if the bill remains sidelined.
The semiconductor industry, a mainstay of the national economy, has been experiencing growing difficulty buffeted by diverse challenges at home and abroad. The administration of U.S. President Joe Biden announced a set of measures Friday to curb the sale of chips made using U.S. technology and equipment to China to prevent Beijing from using them for military purposes, in a bid to contain the Asian giant.
Domestic chipmakers, such as Samsung Electronics and SK hynix, may be affected by the U.S. move, although its impact is considered limited. They will be required to receive permission from the U.S. to sell semiconductor equipment or chip products. The Ministry of Trade, Industry and Energy is downplaying the impact, saying that consultations with the U.S. were made in advance to protect the companies' interests. Yet it is not proper to be too optimistic.
The strategic rivalry between the U.S. and China is likely to intensify, prompting the Yoon administration to step up its diplomatic leverage toward the two nations. It should not repeat the same mistakes as seen in the U.S. legislation of the Inflation Reduction Act, which will exclude Korean-made electric vehicles from tax subsidies. Domestic EV makers have begun to feel the heat as their sales plummeted after the legislation was made in August.
Taiwan Semiconductor Manufacturing Company (TSMC) is presumed to have overtaken Samsung Electronics in chip sales. It registered a forecast-beating 613 billion Taiwan dollars (27.5 trillion won or $19.2 billion) in sales in the third quarter, up 48 percent from a year ago. The firm appears to have snatched the global top spot in chip sales for the first time, edging out Samsung Electronics.
In contrast, Samsung suffered an earnings shock in the same period. Its operating profit in the third quarter plunged 31.7 percent to 10.8 trillion won ($7.6 billion) from a year before. TSMC has continued to enjoy robust growth, boosted by generous support from the Taiwanese government including tax incentives, a well-developed infrastructure and R&D grants. Samsung is poised to fortify its prowess in the foundry sector to tackle the current hardship by making massive investments in the production of 1.4-nano products by 2027.
Yet Samsung's endeavors will unlikely bear fruit unless they are backed by government assistance. Accounting for 20 percent of the nation's total exports, the semiconductor industry is the pillar of the Korean economy with its importance growing in the area of economic security. It is time to have a sense of urgency and offer more support to chipmakers. Or else the semiconductor industry will lose its competiveness and may collapse suddenly.
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