Chipping away

South Korean chipmakers get a reprieve

But the pressure from geopolitical tension and China’s domestic manufacturing drive will increase

IT HAS BEEN an anxious year for Samsung Electronics and SK Hynix, South Korea’s leading chipmakers. Last October America restricted exports of advanced chipmaking equipment to China in an attempt to cripple its ability to procure or produce chips for weapons systems. The South Korean firms, which rely on China as both a manufacturing base and market, received a year-long exemption, but fretted about what might happen after it expires.

On October 9th their minds were put somewhat at ease. South Korea’s government announced that, thanks to “close co-operation” with America, the waivers would become indefinite. Yet the unpredictability of the Sino-American tech war and China’s attempts to bolster domestic manufacturers mean South Korea’s most important industry may still have to look beyond China.

Chips made up some 19% of South Korea’s total exports in 2022, more than any other product. Memory chips, which store information, make up almost 60% of that total, and South…