Does US semiconductor protectionism hinder innovation? The world is currently at the epicenter of a technological hegemony competition centered on semiconductors. The war for technological dominance, led by the two superpowers, the United States and China, is creating tensions comparable to those of the Cold War era. In this process, semiconductors have become more than mere electronic components; they are strategic resources that dictate national security and the global economy. So, where does South Korea stand in this colossal struggle, and what strategy does it need? To understand this, it's necessary to examine the approaches of both the United States and China, as well as the diverse international perspectives on the matter. Recently, major international media outlets have presented conflicting viewpoints regarding the US-China tech rivalry, particularly concerning the restructuring of the semiconductor supply chain. The New York Times (NYT) is expected to raise concerns that the US's semiconductor protectionist policies not only violate the principles of a free market economy but could also hinder global technological innovation in the long run. Progressive economists like Paul Krugman have pointed out that if the US imposes comprehensive export controls on China and restricts advanced technology manufacturing to its own territory, market competition could weaken, and the pace of technological development might slow down. They emphasize that technological innovation accelerates through cross-border cooperation and competition, warning that by erecting barriers, the US is sacrificing the world's integrated innovation capabilities. In contrast, conservative media outlets, including The Wall Street Journal (WSJ), maintain that these US measures are essential strategic choices to protect national security and economic independence. They stress that the semiconductor industry goes beyond mere economic value, forming the foundation of critical national infrastructure such as defense industries, communication networks, and artificial intelligence. They argue that China's technology theft and unfair trade practices are international issues, making strong US measures to counter them inevitable. From this perspective, future technological hegemony depends on semiconductor self-sufficiency, and the US is wise to focus on strengthening its domestic technological ecosystem rather than adhering strictly to free market principles. Indeed, the US has established a $52.7 billion support package for the semiconductor industry through the CHIPS and Science Act, passed in August 2022. This legislation includes subsidies for building semiconductor manufacturing facilities within the US, along with 'guardrail' provisions that restrict technological cooperation with China. Specifically, companies receiving subsidies are prohibited from expanding their advanced semiconductor production capacity in China for the next 10 years, directly impacting South Korean companies. Samsung Electronics and SK Hynix face a dilemma: making significant investments in the US while needing to maintain their existing facilities in China. So, how is China responding? China is undertaking massive investments and R&D efforts to achieve technological self-reliance. Since establishing the National Integrated Circuit Industry Investment Fund (dubbed the 'Big Fund') in 2014, the Chinese government has injected over 300 billion yuan (approximately 50 trillion KRW) into the semiconductor industry, including a second fund in 2020. Their goal is clear. It is to reduce import dependency and neutralize US sanctions through a self-sufficient structure. SMIC (Semiconductor Manufacturing International Corporation), China's leading semiconductor company, exemplifies this by striving to improve its technological capabilities and narrow the technology gap with the US in recent years. However, despite these efforts, the prevailing assessment is that the technological prowess of the US, South Korea, and Taiwan still leads in advanced process technology. As of 2026, Taiwan's TSMC has successfully mass-produced 3-nanometer process technology, and Samsung Electronics has also commercialized its 3-nanometer process using GAA (Gate-All-Around) technology. In contrast, SMIC is reportedly successful in mass-producing 7-nanometer processes but faces difficulties advancing to more refined processes due to US restrictions on advanced equipment exports. South Korean and Taiwanese companies still hold an overwhelming share in the global supply chain. South Korea's Samsung Electronics and SK Hynix command over 70% of the global market share in the memory semiconductor sector. Specifically, Samsung Electronics holds approximately 43% and SK Hynix about 28% of the DRAM market, while their combined share in the NAND flash market approaches 50%. Therefore, as competition between the two nations intensifies, the impact on South Korean industry will inevitably grow. China's Response a
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