Netherlands, South Korea to Boost Chip Ties Amid US Curbs

(Bloomberg) -- South Korean President Yoon Suk Yeol and Dutch Prime Minister Mark Rutte discussed ways to enhance economic security ties, seeking cooperation in the chip industry after US export curbs to China rattled the global semiconductor market.

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The two “underscored the significance of further strengthening existing collaboration between the two countries’ semiconductor industries and expressed their intention to support the private sector in order to sustain a resilient supply chain in that sector,” according to a joint statement released after their summit in Seoul Thursday.

The statement made no mention of China or the US, or provided details of any cooperation between the powerhouse chipmakers in their respective countries trying to navigate the Biden administration’s semiconductor controls.

The US has been pressuring allies and partners including South Korea and the Netherlands to comply with the sweeping curbs on the sale of advanced chips in a policy aimed at preventing China’s advance in a range of cutting-edge technologies that could threaten America’s status as the world’s pre-eminent power.

Chinese President Xi Jinping this week urged the Dutch leader to avoid “decoupling” as the US pressures the Netherlands. In separate meeting with Yoon on the sidelines of the Group of 20 summit in Bali, Xi called for increased cooperation in high-tech manufacturing with South Korea

In the Netherlands, home of ASML Holding NV, which has a virtual monopoly on a type of machine needed to make the most advanced chips, people familiar with the talks with the Biden administration described the US as applying a great deal of pressure.

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ASML holds a role as a linchpin of the $580 billion global chip industry. It’s also a key supplier to South Korean chip giants Samsung Electronics Co. and SK Hynix Inc., which hosts one of the two centers outside the Netherlands that train semiconductor engineers to fabricate cutting-edge chips on ASML machines.

Hynix, one of the world’s biggest memory chipmakers, has warned that the Biden administration’s escalating restrictions could force the closing or sale of a major plant in China, an “extreme situation” it hopes to avert.

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The meeting comes a day after ASML’s Chief Executive Officer Peter Wennink attended a groundbreaking ceremony of its maintenance and training centers in South Korea, in which the company invested 240 billion won ($181 million). Yoon and Rutte met in June to discuss cooperation in semiconductor and nuclear power sectors on the sidelines of the NATO summit in Madrid.

Ahead of the bilateral meeting, the two leaders and Wennink also met Samsung Executive Chairman Jay Y. Lee and SK Group Chairman Chey Tae-won and discussed additional investment from the Dutch manufacturer.

--With assistance from Shinhye Kang.

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