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There is a good chance that however you're listening right now - in your car or through a smart speaker or smartphone - semiconductors are helping make it happen. They're a crucial technology, and they're in short supply. So it was welcome news to the Biden administration that South Korean industrial giant Samsung plans to invest $17 billion in a new chip plant in Texas. But as NPR's Anthony Kuhn reports, the threat of U.S. regulation worries some Korean chipmakers.
ANTHONY KUHN, BYLINE: In September, the Biden administration asked major chipmakers for information, such as where are you in the supply chain? Where are the bottlenecks in production? And who are your customers? Yeon Wonho is a researcher at the Korea Institute for International Economic Policy, a government-funded research institute. He says South Korean chipmakers felt nervous about answering some of the questions.
YEON WONHO: They want to actually cooperate with the United States government, but they don't want too much intervention in the private sector.
KUHN: Samsung and SK hynix are South Korea's biggest chipmakers and two of the world's biggest producers of memory chips used in everything from smartphones to automobiles and aerospace equipment. Yeon says not only are these companies concerned about the U.S. getting involved in their business, they're concerned about their own government as well.
YEON: I think they have to share what they submit with also the Korean government. So it is quite likely that the government's control will become tighter in the future.
KUHN: This month, the companies answered some of the U.S.' questions but withheld information about their customers. The U.S. insists that no confidential information will be leaked, but Yeon says that for South Korean chipmakers, trust remains an issue.
YEON: There is a chance that the U.S. government, the Department of Commerce, might share this information with maybe U.S. companies, such as Intel.
KUHN: Yang Hyang-ja is a lawmaker and former executive at Samsung, where she worked on memory chips. She says she understands why the U.S. is asking for information.
YANG HYANG-JA: (Through interpreter) The most important task is forecasting where the industry is headed. You have to plan ahead at least 10 years and decide what needs to be done now based on that road map.
KUHN: Over the next 10 years, the South Korean government plans to spend around $450 billion to support its chipmaking industry. President Moon Jae-in outlined his vision in a speech in May.
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PRESIDENT MOON JAE-IN: (Speaking Korean).
KUHN: "While solidly maintaining our status as the world's best semiconductor maker," he said, "we will safeguard our national interests by using the current semiconductor boom as an opportunity for a new leap forward." It's not the first time South Korea has given the industry a boost. Yang points out that beginning in the 1960s, the government built industrial zones and trained engineers to make semiconductors. But since then, the government has left major decisions about the industry to the private sector. And Yang thinks it should stay that way.
YANG: (Through interpreter) We cannot prioritize government intervention. Accurately predicting and analyzing changes in the industrial structure is crucial, and it can't be done by the government. It's the companies that know best and see farthest.
KUHN: Another concern of South Korean chipmakers is that the U.S. will restrict their dealings with their biggest market - China. But Yang Hyang-ja says South Korea has become too important in the semiconductor industry for the U.S. or any country to order it around, especially since it's an ally.
YANG: (Through interpreter) I'm sure the U.S. would want to maintain the alliance and not force South Korea out of the industrial network with sanctions because they consider South Korean semiconductors crucial.
KUHN: Besides semiconductors, the U.S. also seeks to enlist allies to ensure its supply of other high-tech products such as lithium ion batteries and pharmaceuticals. So South Korean companies in those industries are keeping a close watch on how the struggle for dominance in semiconductors plays out. Anthony Kuhn, NPR News, Seoul.
(SOUNDBITE OF FLASH AND THE PAN'S "WALKING IN THE RAIN") Transcript provided by NPR, Copyright NPR.
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