South Korea and the Netherlands strengthen cooperation on semiconductor supply chain

On July 7, South Korean President Moon Jae-in and Dutch Prime Minister Mark Rutte held an online summit, during which both sides agreed to expand their bilateral economic cooperation to semiconductors, renewable energy, and other key industries emerging in the Fourth Industrial Revolution.

According to their joint press statement, the two sides agreed to strengthen cooperation on the semiconductor supply chain and "mutually recognize each other as core partners in the semiconductor field." The statement said the two countries should leverage their "complementary relationship" in the industry, citing South Korea's manufacturing strength and the Netherlands' advantages in production equipment.

South Korea's Samsung Electronics Co. and SK Hynix Inc. are facing a surge in demand for advanced semiconductors, and EUV lithography machines are the most critical equipment in the chip production process, with Dutch company ASML being the main supplier for both.

Taiwanese media analysis believes that for the South Korean authorities, establishing a good relationship with ASML will help reduce South Korea's dependence on Japanese raw materials, parts and equipment.

South Korean semiconductor manufacturers rely on imports for their EUV lithography machines, of which 27.3% come from the Netherlands. If the scope is narrowed to advanced processes below 7 nanometers, ASML's lithography machines almost monopolize the global market. Therefore, for South Korean semiconductor manufacturers, obtaining ASML's equipment is the key to taking the lead in this global chip competition.