S Korean president heads to Netherlands to boost semiconductor cooperation

South Korean President Yoon Suk Yeol heads to the Netherlands Monday for a trip he told AFP would focus on boosting crucial semiconductor cooperation between the two global chip powerhouses.

High-tech chips are the lifeblood of the modern global economy, used in everything from weapons to cars, and South Korea accounts for about 60 percent of the world's supply of memory chips, Yoon told AFP in an exclusive written interview.

The Netherlands is home to ASML, which produces the lithography equipment that makes semiconductors, and for years the two countries have worked together "in an exemplary manner", Yoon said, "contributing to the stability of global semiconductor supply chains."

But the industry is being buffeted by geopolitical turbulence, with semiconductors a flashpoint issue between the United States and China, which are locked in a fierce battle over access to chip-making technology and supplies.

The Netherlands recently joined the United States and Japan in imposing export restrictions on advanced chip-making equipment aimed at preventing China from acquiring sensitive inputs that could be used in cutting-edge weapons and tech such as artificial intelligence.

The curbs have infuriated Beijing, which has accused Washington of "technological terrorism".

"As competition between countries and regions intensifies to gain hegemony over emerging technologies, the semiconductor industry is strategically more important than ever before, which makes this visit to the Netherlands especially meaningful," Yoon said.

"Semiconductors are the linchpin of Korea-Netherlands cooperation," he said. "The global semiconductor industry's stable and sustainable growth is in the core interest of both countries."

South Korea and the Netherlands share a common understanding that "the economy is now synonymous with security and vice versa", the president added.

- 'Crucial turning point' -

ASML supplies South Korea's major chip makers, Samsung Electronics and SK Hynix.

During the state visit, Yoon will tour the ASML headquarters, including the company's highly controlled "cleanroom" manufacturing facilities, becoming the first foreign leader to do so.

This "will mark a crucial turning point for the 'Korea-Netherlands semiconductor alliance'", Yoon told AFP, adding that discussions on chip cooperation were his "top priority" for the trip, the first by a Korean head of state since bilateral ties were established in 1961.

Yoon's office said last week that during the state visit South Korea aims to establish a "chip alliance" with the Netherlands, which would involve governments, businesses, and universities from both countries.

The US-led export restrictions have become an issue for Samsung Electronics and SK Hynix, which, like most of the world's biggest chip makers, base a large portion of their production, especially of advanced DRAM and flash memory chips, in China.

Experts said that South Korean chip companies needed to find ways to mitigate the impact of controls on shipping advanced microchip production machines to China -- curbs which might, for example, prevent them from upgrading their equipment.

Yoon said the South Korean chip makers were spending hundreds of billions of dollars to "build the world's largest semiconductor cluster in Korea".

But even as the companies ramp up domestic investment, experts warned that it could take years, maybe decades, to meaningfully shift chip manufacturing away from China.

- 'Strategic assets' -

Seoul is a key regional ally of Washington, and earlier this month, US Commerce Secretary Gina Raimondo urged US allies to stop China from getting semiconductors and cutting-edge technologies vital to national security.

"The global environment surrounding the semiconductor industry is rapidly changing in tandem with competition for technological supremacy and supply chain restructuring," Yoon said.

It is clear that "as semiconductors emerge as strategic assets in terms of industry, technology and security, geopolitical risks surrounding global supply chains are expanding", he added.

The president's three-day visit to the Netherlands will help both countries "establish a well-organised institutional framework that will intensively address global semiconductor supply chains."

South Korea plans "to significantly boost semiconductor cooperation with such major countries as the Netherlands, the United States and Japan going forward", he said.