Seoul to stand up to Beijing over chips
The government has officially requested China to drop its apparent “discriminatory measures” applied to top-tier Korean manufacturers.
“The government filed an official request with the Chinese trade ministry to correct discriminatory measures on Korean manufacturers, which we believe are truly unfair, and asked it to ensure fair market competition to protect the best interests of consumers and clients,” a senior government official said Thursday.
“China has notified Korea’s trade ministry that it will correct any unfair practices, if found.” The official said the government will step in to help Samsung and SK affiliates, both of which operate massive manufacturing facilities in China, be treated under a “non-discriminatory” principle.
Regarding the timeframe for change, the official said, “China will take procedural steps to change its policy and this will take some time.”
China recently launched an investigation into Samsung Electronics and SK hynix, alleging they “artificially inflated” memory chip prices that they sell to leading Chinese handset manufacturers.
Chinese officials visited the offices of Samsung and SK hynix in Beijing, though it’s unknown what information or documents they sought.
The government official said the two Korean companies weren’t involved in a price-fixing scheme and added the rise in memory chip prices was due to high demand and tight supply from industry consolidation.
Earlier, China imposed heavy penalties on U.S.-based mobile chip giant Qualcomm with the latter lowering its royalties it collects from Chinese handset manufacturers.
Another government official said China wants to help the country’s leading hardware manufacturers by asking the Korean pair to widen the scope of patent licensing.
“China provided Samsung and SK with financial and administrative support to help them reduce investment risk, there. The two firms responded by hiring more Chinese employees at their plants and paying more income taxes. Patents are a result of steady investment and commitment for innovation, which can only be negotiated on a needs basis” the official said.
Also, LG Chem and Samsung SDI, Korea’s top two battery makers, have been struggling to gain a foothold in China since 2016, when the trade ministry there began to drop subsidies for Chinese electric vehicles equipped with their batteries.
China said the ban had no relation to Seoul’s deployment of a U.S. missile defense system on the peninsula. But company officials said the measure was taken as part of “unofficial sanctions” for the deployment.
“Korea’s trade ministry asked China to address the battery issue and we are awaiting the newest updates,” said the official.