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South Korea's Moon summons strategic companies amid chip shortage

Samsung, Hyundai Motor and others discuss crisis disrupting supply chains

President Moon Jae-in speaks during a meeting with executives from South Korean companies in key industries including semiconductors, autos and shipbuilding.   © Yonhap/EPA/Jiji

SEOUL -- South Korean President Moon Jae-in summoned business leaders in the semiconductor, auto and shipbuilding industries on Thursday to discuss strategies in the sectors as Seoul faces pressure from both the U.S. and China to take their side amid their battle for global tech supremacy.

Executives from Samsung Electronics, SK Hynix, Hyundai Motor, Korea Shipbuilding & Offshore Engineering and Samsung Heavy Industries took part in the rare gathering at the presidential Blue House. Finance Minister Hong Nam-ki, Science Minister Choi Ki-young and Industry Minister Sung Yun-mo also attended.

Moon used the start of the meeting to stress the importance of computer chips for South Korea as a wide range of global industries face a shortage of the key devices due to exploding demand amid the coronavirus pandemic.

"The semiconductor industry is the key national strategic industry which can decide the present and the future of our economy," he told the start of the meeting. "We should continue to lead the global semiconductor supply chain."

He added that the government would set up a wide range of plans to maintain its leading status and even to "widen gaps" with competitors.

Regarding the chip shortage in the auto industry, Moon said "the government is doing the best to secure volumes in cooperation with companies" and "will raise the portion of domestic production through an alliance of the chip and auto industries."

Lee Jung-bae, the president of the memory chip business at Samsung Electronics, expressed optimism for a resolution.

"We can overcome this situation if the government and corporations share our wisdom," Lee was quoted as saying at the meeting by the Blue House.

Hyundai Motor suspended production of automobiles at its Asan factory on Monday and Tuesday due to a lack of chips. The company was able to restart assembly lines on Wednesday, though questions over the sustainability of manufacturing remain.

"We are getting a lot of help [from Samsung Electronics]," Kong Young-woon, Hyundai's president, said, according to the Blue House. "We are going overseas to procure automotive chips and the government is taking a lot of quick action on this. I appreciate it."

The South Korean meeting came just days after U.S. President Joe Biden expressed his ambitions to return America to the global forefront in semiconductors and other key sectors during a virtual meeting with global chipmakers and automakers including Samsung, Intel, Taiwan Semiconductor Manufacturing Co. and General Motors.

The White House also encouraged the chipmakers to build semiconductor manufacturing capacity in the U.S. to make sure the country never again faces a shortage of chips such as the one currently disrupting global supply chains.

Samsung welcomed Biden's drive to invest $50 billion in the semiconductor industry as part of his CHIPS for America program. "We are pleased to see the administration's working with Congress to advance this necessary and bipartisan $50 billion investment in semiconductor manufacturing and research," the tech group said on Twitter on Wednesday.

China's government and the country's tech big groups have also pressured South Korea to be their tech ally. Huawei Korea CEO Sun Luyuan said at a press conference on Tuesday that the company had bought products worth $37 billion from South Korea over the past five years, saying the company was keeping its slogan of "In Korea, for Korea" while doing business in the country.

Huawei buys memory chips from Samsung and SK Hynix and is also a key customer for Samsung Display's mobile panels.

The Chinese Foreign Ministry said earlier this month that it wanted to be South Korea's partner in 5G, big data, the green economy, artificial intelligence and integrated circuits after South Korean Foreign Minster Chung Eui-yong met his Chinese counterpart Wang Yi in the city of Xiamen in Fujian Province.

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