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S.Korean chipmakers brace for impact from sanctions against Russia

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Seoul, Feb 26 (IANS) South Korean chipmakers will be affected by export controls that Washington imposed on Russia over the Ukraine crisis, but the impact is not likely to be significant, experts said.

The US Commerce Department announced new sanctions on Thursday that said “it will severely restrict Russia’s access to technologies and other items that it needs to sustain its aggressive military capabilities.”

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Items subject to the export control measures include semiconductors, computers, telecommunications and information security equipment, among others, the department said, calling them “sensitive items Moscow relies on for its self defense, aerospace and maritime industries.”

The measures restrict exports of any product that uses American technology or equipment to Russia, even if it is not produced in the US, reports Yonhap news agency.

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As with most global chipmakers, Samsung Electronics and SK hynix rely on American technology, to some extent, to make semiconductors. They are the world’s two largest memory chip makers.

While the chipmakers will be affected by the technology control measures, their meager trade volume with Russia suggests that the impact will be minimal.

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South Korea’s chip exports to Russia came to $74 million last year, which accounted for just 0.06 per cent of the country’s total export.

The companies’ respective export data to Russia were not available.

Globally, Russia takes up less than 0.1 per cent of global chip sales, according to the World Semiconductor Trade Statistics.

Still, the sanctions could slow down demand for chips, and by extension, consumer appliances and smartphones that use them, said Park Jae-gun, chairman of the Korean Society of Semiconductor And Display Technology.

–IANS

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