South Korea’s delay in taking part in the talks relates to concerns about a possible trade war with China, according to Matthew Bey, a senior global analyst for RANE Risk Intelligence, a geopolitical business consultancy.
“Joining the Chip 4 alliance is a significant risk for South Korea as any moves to actually restrict chip sales to and investment into China risks triggering a trade war—with China seeing South Korean goods, regardless of sector, being boycotted,” he said.
The U.S. will need to reduce the scope of the alliance to limiting China’s access to foreign chip technology, Bey said.
“From the U.S.’s perspective, it’s probably not going to be an effective vehicle by itself to restrict China’s access to chips given Japan, South Korea, and Taiwan’s dependence on the Chinese economy and China’s likely coercive economic retaliation if the Chip 4 initiative makes substantive moves.”
Read the full EE Times article here.
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