[Beijing = E-Daily Lee Myeongcheol Correspondent] China has voiced strong opposition to reports that the U.S. has restricted exports of equipment for SK hynix(000660)’s factories in China. China also urged South Korea not to yield to U.S. pressure, arguing that the U.S. is infringing on South Korean companies’ interests by demanding they invest in the U.S.

China’s state-run Global Times (GT) reported on the 5th in an editorial titled “Why Resisting U.S. Pressure Is Crucial for South Korean Semiconductor Companies” that “U.S. efforts to attract investment from South Korean semiconductor companies are at risk of being derailed by regulations the U.S. has imposed on itself.”

Earlier, on the 3rd (local time), Reuters reported that SK hynix had requested an export license for U.S.-made semiconductor manufacturing equipment to expand production capacity at its Dalian plant in China, but the U.S. Department of Commerce has not approved the request.

China has pointed out that this situation reflects tensions in semiconductor cooperation between South Korea and the U.S. The GT analyzed, “While the U.S. government seeks to attract more investment and manufacturing capacity from South Korea, it is simultaneously using export controls to limit South Korean semiconductor companies’ ability to expand production in China,” adding, “This indicates that the interests of the two sides are at odds.”

It assessed that if South Korean semiconductor companies expand their operations in the U.S., the U.S. would secure new investments and jobs, whereas the companies would bear commercial and strategic costs while facing constraints on their global business operations.

GT argued, “Given strong global demand for memory semiconductors and a shortage of supply, China’s production capacity is a valuable asset for South Korean semiconductor companies,” adding, “Maintaining the ability to continue utilizing this production capacity clearly aligns with the commercial interests of these companies.”

It further noted, “China’s extensive supply chain and manufacturing capabilities have long supported the operations of South Korean semiconductor companies, and this constitutes a mutually beneficial relationship for both sides.”

However, the U.S. government’s restrictions on South Korean companies’ expansion of production capacity in China are infringing upon their commercial interests.

GT emphasized, “South Korean semiconductor companies should not accommodate U.S. demands at the expense of their global business operations,” adding, “They must maintain the flexibility to make decisions regarding investment and production based on commercial judgment.”

GT noted that while China’s rapidly developing semiconductor industry is competing with South Korea’s, there is potential for cooperation in areas where interests align.

GT stated, “The question is whether South Korean semiconductor companies can withstand U.S. pressure without sacrificing their global business scope and commercial flexibility,” adding, “How they maintain this balance could have implications that extend far beyond their operations in China.”