Operation Disclosure | By David Lifschultz, Contributing Writer September 15, 2020 WILL THE US ALLIANCE WITH SOUTH KOREA AND GERMANY EN...
Operation Disclosure | By David Lifschultz, Contributing Writer
September 15, 2020
WILL THE US ALLIANCE WITH SOUTH KOREA AND GERMANY END?
South Korea and Germany (EU) have been responsible for the massive destruction of US industry by the rigging of their currencies as Japan. As such, there is no logical basis even in geopolitics to create military alliances based on the internal destruction of the US industries as part of alliance structures against China and Russia as during the McCarthy era. Yet that has been the case since 1945 as can be seen in the correspondence between myself and the then Secretary of the Treasury quoted next:
Robert Rubin Correspondence – David Lifschultz
The so-called myth of free trade can not work based on accessing cheaper labor markets unless the currencies are rigged as the dollar would otherwise fall against the cheap labor market based on supply and demand for dollars as demonstrated in the above correspondence. This would nullify the comparative advantage of the cheaper labor rates by the cheapening dollar. This has been the case with South Korea which now faces the fact that China is more important to its economy than the US. South Korea does not want to be involved with the US boycott of Huawei for this reason.
According to research organization the Observation for Economic Complexity, South Korea exported $160 billion worth of products to China, and just $73 billion to the US in 2018.
Global Times, which speaks for the Chinese Government, for its part, turned the tables on those assessments of South Korea abandoning China. Samsung has been “deeply” reliant upon China” and the company, it said, “can neither afford to lose the vast China market, nor a decline in its revenue if Huawei, one of the major purchasers of its memory products, turns its back.”
The newspaper did offer some incentives. It suggested that amid the US chip ban Samsung could assist Huawei “in a low profile way”, adding, “If Samsung could help Huawei get through these difficult times….[it] could greatly improve its prestige and regain its lost fame in the Chinese market.”
We interpret this to mean that South Korea may help Huawei "indirectly" obtain the knowhow from Samsung so that China can make the Samsung sanctioned products themselves neutralizing the US sanctions and rewarding South Korea with great amounts of additional business.
While Pompeo bewails that there is no NATO in Asia, which was once SEATO, the truth is that there will never be a NATO in Asia again and NATO itself is finished to all intents and purposes. As to NATO, the US will never used nuclear weapons to defend Germany incurring 200 million dead in the US. That is a giant fact the Europe better get to understand. South Korea and Japan clearly understood this when the US threatened to destroy North Korea while it could by a nuclear attack so that North Korea could not develop an ICBM that could reach the US. The South Koreans and Japan saw this to mean their countries were to be sacrificed by total destruction as they were within range of North Korean short-range nuclear missiles while the US was saved. The US defensive missile systems that they have are the equivalent of a Potemkin Village. The alliance had no meaning to the US unless it was in the US interest which had nothing to do with the goals of Japan and South Korea. Germany watched this also. Of course, this is elementary geopolitics. The Asian and European alliances of the US are are similarly Potemkin Villages essentially over though we have not gone through with the funeral arrangements as yet. It is a lot of sound and fury signifying nothing.
Samsung turns away from Huawei
By ANDREW SALMON
SEOUL – As a tech war rages between Beijing and Washington over Chinese flagship Huawei, indications are that South Korea’s national champion and global semiconductor powerhouse Samsung Electronics has sided with the US.
Widespread reports in South Korea that appeared in both TV and online news on Wednesday (September 9) stated that the country’s two major chipmakers, Samsung and its smaller rival SK Hynix, will cease supplying semiconductors to Huawei as of September 15.
“I understand that Samsung Electronics will stop shipping chips to Huawei from next Tuesday, though there is a possibility of selling products after winning US approval,” an industry observer said, according to South Korea’s semi-official news agency Yonhap.
That’s the same day the latest round of US tech sanctions on Huawei are scheduled to take effect. The accuracy of Wednesday’s reports, quoting anonymous sources, could not be immediately verified by Asia Times.
But unless there is a brilliantly conducted smokescreen operation in place, drawing a cloud over a secret Huawei-Samsung relationship, the reports synch with a range of developments, indications, analyses and rumors that Asia Times has recently closely monitored.
Commercial logic would dictate that Samsung – if forced to make a choice – would choose the US over China: It sells over twice as much product to the Americas as a whole than to China.
This year, Washington has tightened the screws on Huawei with a wide range of measures.
Those sanctions and bans have also cast shadows over companies that supply Huawei with components. If those companies fail to win US approval for their sales to Huawei, they could face the wrath of US regulators, including potential secondary sanctions.
“The key issue for Samsung is the level of support for sanctions placed by the US government from both short-term and long-term perspectives,” said Handel Jones, founder and CEO of International Business Strategies, or IBS, a US-based electronics-focused consultancy
Another fear that is likely causing hairs to turn gray in Samsung’s executive suites is how far a possible Chinese retaliation could reach. But beyond the chip sector, Chinese leverage over Samsung does not appear massively strong in other electronics sub-sectors.
In smartphones, Samsung has just a tiny share of the Chinese market. And in terms of 5G, it is equally positioned to benefit. Samsung has nothing to lose on Huawei’s home turf: It seems highly unlikely that it would have any significant opportunities to sell 5G equipment in China.
But, as Washington and its allies balk at using Huawei-made gear in the 5G network build-out that is underway globally, the Korean company is well-positioned to fill the Huawei vacuum.
The big question is how much damage Samsung could suffer in semiconductors – its biggest revenue stream and a sector that has been bolstered further amid Covid-19 lockdowns in 2020 – if China decides to play hardball in retaliation for South Korea’s snub of Huawei.
The company is often criticized for opacity, but it is difficult to fault its prudence: When asked by Asia Times about trade war issues and its Huawei ties, the company declined to comment.
Strained neutrality
The China-US decoupling presents unprecedented challenges to Samsung. The company faces all the high and rising geopolitical risks that South Korea does as a nation.
South Korea is strategically allied to the distant US: It has no mutual defense agreement with any other nation. However, its top trade partner is neighboring China.
According to research organization the Observation for Economic Complexity, the country exported $160 billion worth of products to China, and just $73 billion to the US in 2018.
And with the Chinese economy’s recovery from Covid-19 far outpacing America’s, China is looking ever more promising than the US for Korean exporters.
It is the modern iteration of an age-old regional conundrum. Positioned between China, Russia and Japan, Koreans have customarily referred to their strategic peninsula as “a shrimp between whales.”
Since the establishment of diplomatic relations with former Korean War foe Beijing in 1992, Seoul’s diplomats have walked this high-altitude tightrope without tripping. Now, 28 years hence, Beijing-Washington ties have plummeted to their lowest nadir since that year.
Seoul’s top diplomat openly admits the stresses.
“The biggest concern among foreign policymakers is the heightened tension between the superpowers,” fretted Seoul’s Foreign Minister Kang Kyung-wha at a forum on August 31.
“The competition began with trade disputes but has now expanded to a wider range of issues, including the economy, technology, military, security, politics and public health sectors.”
Beijing and Washington are both leaning on Seoul.
US Deputy Secretary of State Stephen Biegun, bemoaning the lack of a NATO-like structure in East Asia, recently spoke of expanding the “Quad” security alliance, comprising Australia, India, Japan and the US, to include South Korea.
That was pushing the diplomatic envelope. South Korean President Moon Jae-in had assured Chinese President Xi Jinping in 2019 that it would not join a Japan-US alliance. The Quad includes both.
Chinese diplomacy toward South Korea may be even more assertive.
China’s most senior diplomat, Yang Dechi, director of the Office of the Foreign Affairs Commission of the Communist Party of China’s Foreign Affairs Commission and a Politburo member, visited South Korea in late August for talks with Seoul’s National Security advisor Suh Hoon.
The agenda and outcome of those talks remain under wraps. And it is not known what proportion of carrots and sticks Yang deployed. But Beijing’s English language mouthpiece Global Times did not pull its punches in an August 21 piece that referenced the visit.
While South Korean media assumed that Yang and Suh’s key agenda was an anticipated state visit by Chinese President Xi Jinping later this year, the state-run Chinese media put Samsung-Huawei ties front and center in its article.
Samsung should “make the wise choice and flexibly maintain its cooperation with Huawei amid the US chip ban,” the paper advised. Reading between the lines, this suggests Huawei finds itself in a tight corner when it comes to sourcing high-end semiconductors.
Two manufacturers dominate the non-memory sector, supplying foundry services to make the most sophisticated logic chips, also known as system chips. Both are headquartered in countries that lie in the US’ orbit.
The first is the market leader, Taiwan-based Taiwan Semiconductor Manufacturing Company, or TSMC. The second – which is currently in the midst of an expansion from its globally dominant position in the simpler memory chip market to the more sophisticated, lucrative non-memory chips – is Samsung.
Chips are the top earner for Samsung, which does electronics nose-to-tail, B2B and B2C. Despite persistent fears in Seoul that Chinese competitors could overtake Samsung in chips, the company has a comfortable lead.
“Samsung entered semiconductors in the 1980s, but now it is very difficult to get into, it is capital intensive and knowledge-intensive,” an industry official told Asia Times.
In terms of dynamic random-access memory (DRAM), the most common type of random-access semiconductor memory currently in use, “the number of processes you have to duplicate are in the hundreds, not the dozens, and there are lots of physics-challenging components,” the official said. “This requires decades of know-how.”
IBS estimates that Samsung is 12-18 months ahead of all competitors in DRAM. “China will find it difficult to organically close the gap with industry leaders,” Fitch Ratings added in a July report.
Global Times, for its part, turned the tables on those assessments. Samsung has been “deeply” reliant upon China” and the company, it said, “can neither afford to lose the vast China market, nor a decline in its revenue if Huawei, one of the major purchasers of its memory products, turns its back.”
The newspaper did offer some incentives. It suggested that amid the US chip ban Samsung could assist Huawei “in a low profile way”, adding, “If Samsung could help Huawei get through these difficult times….[it] could greatly improve its prestige and regain its lost fame in the Chinese market.”
The Global Times is known for floating trial balloons and for aggressive pro-Beijing messaging. But Koreans will get its gist immediately, for they have real reasons to fear.
In 2017, after Lotte Group supplied Korean land for a US anti-missile defense system that irked Beijing, it faced boycotts in China and ultimately withdrew from China’s retail market. “Any blow felt by China could also be felt by South Korean firms in the semiconductor sector,” Global Times added.
However, Global Times may not be aware of Samsung’s 107 trillion won (US$899 billion), war chest. It may also overstate commercial ties linking Samsung and Huawei. Those ties have not been made public by either party. According to Wednesday’s South Korean news reports, Huawei is Samsung’s fifth-biggest customer globally.
And China itself is not the premier market for Samsung. The Americas (as a whole) buy more than twice the amount of product that Samsung sells to China.
According to Samsung Electronics’ 2020 Sustainability Report, in 2019, the company sold 79 trillion won ($66.5 billion) worth of products to the Americas, and 36 trillion ($31.9 billion) to China. Overall, its sales ratio was 32% to the Americas – the highest percentage in the world – compared to 16% to China.
In both categories, total sales and sale ratios, China lagged behind the Americas and Europe.
Forced to leap westward?
Samsung’s chip-manufacturing archipelago is diverse.
Among its major facilities, its core DRAM and NAND memory plants are in Korea, south of Seoul, and in Pyeongtaek, a port on the Yellow Sea. Pyeongtaek also possesses foundry facilities.
Overseas, it has a US foundry in Texas, in addition to its NAND plant in Xian, China.
The question is how far the cross-Pacific trade war will affect this vast operation. “The negative impact is reduction in flexibility of Samsung’s participation in the China market,” said IBS’ Jones.
Certainly, Samsung has been trying to hedge. Samsung vice-chairman Lee Jae-yong visited China in May, where party officials requested cooperation in logic chips, among other sectors. But mounting indications are that Samsung is leaning westward.
On September 2, Samsung pulled out of a Chinese liquid crystal display plant. In August, Samsung announced it was closing its last personal computer factory in China. Those closures follow the shuttering of all of Samsung’s smartphone plants in China.
Another clue to Samsung’s Huawei logic chip stance was reported in South Korea’s Korean-language Joongang Ilbo. The Joongang Media Group has traditionally had close ties with Samsung’s Lees, so is widely seen as a sound source on the conglomerate’s moves.
The paper reported that on June 17 Samsung turned down Huawei’s request to manufacture an application processor (AP). Even though the article noted that Samsung possesses foundries with European and Japanese equipment, Samsung reportedly rejected the request to service Huawei “…in consideration of US policy.”
As per new US policy, companies which supply Huawei with chips using American equipment are required to obtain US licenses. The tricky issue is how to define US equipment, as the value chain is fiendishly complex. In addition to actual machinery, the US could crack down on firms using US design solutions, tools and materials.
“You have the value chain of design, the foundry, the equipment used in the foundry that is from all over the world, and then you have software design, tools which are dominated by the US,” said Mark Newman, a senior analyst at Bernstein and former Samsung employee.
“Though Huawei wants to increase purchases from Samsung, such as APs, Samsung is likely to stop selling due to strengthened US regulations,” Song Jae-yong, AmorePacific Professor of Business Management at Seoul University Business School, predicted prior to Wednesday’s news.
Meanwhile, Samsung is winning big order after big order for non-memory chips from major US clients. Last month, IBM and this month gaming company Nvidia announced major foundry contracts with the Korean firm. And on September 9, specialist US tech media reported that Qualcomm will use Samsung to make its mass market 5G Snapdragon 4 chipset.
Such deals, however, are likely unrelated to US policy: Due to the complexity of logic chip roadmaps, they have probably been months or even years in the making.
Still, it might have been sensible for Samsung to wait out the US election before setting any policy on Huawei in stone.
After all, if trade warrior and China basher Donald Trump loses the upcoming presidential election, a Joe Biden administration could move to restore calm and predictability to global supply chains.
The imminence of US measures against Huawei, and possibly its suppliers, may have compelled South Korea’s chip makers to jump earlier than they may have liked. That conclusion is supported by at least one Samsung watcher.
“I don’t think Samsung knows how to navigate this [new] world,” said Geoff Cain, author of Samsung Rising. “I think they are not strategic, they are reactive.
David Lifschultz
THE LIFSCHULTZ ORGANIZATION
DAVID@LIFSCHULTZORGANIZATION.COM
______________________________________________________
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The subject of your email entry should be: "Entry Post | (Title of your post) | Operation Disclosure"
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Newsletter
If you wish to receive the daily Operation Disclosure Newsletter, you can subscribe here.
______________________________________________________
Our mission at Operation Disclosure is to bring you important news events and raw intel from various sources focused on exposing the Deep State/Cabal and their downfall. We are also focused on disclosing our lost ancient origins and extraterrestrial contact.
Disclaimer: All articles, videos, and images posted on Operation Disclosure were submitted by readers and/or handpicked by the site itself for informational and/or entertainment purposes. All statements, claims, views and opinions that appear on this site are always presented as unverified and should be discerned by the reader. We do not endorse any opinions expressed on this website and we do not support, represent or guarantee the completeness, truthfulness, accuracy, or reliability of any content posted on this website.
Copyright © 2020 Operation Disclosure
September 15, 2020
WILL THE US ALLIANCE WITH SOUTH KOREA AND GERMANY END?
South Korea and Germany (EU) have been responsible for the massive destruction of US industry by the rigging of their currencies as Japan. As such, there is no logical basis even in geopolitics to create military alliances based on the internal destruction of the US industries as part of alliance structures against China and Russia as during the McCarthy era. Yet that has been the case since 1945 as can be seen in the correspondence between myself and the then Secretary of the Treasury quoted next:
Robert Rubin Correspondence – David Lifschultz
The so-called myth of free trade can not work based on accessing cheaper labor markets unless the currencies are rigged as the dollar would otherwise fall against the cheap labor market based on supply and demand for dollars as demonstrated in the above correspondence. This would nullify the comparative advantage of the cheaper labor rates by the cheapening dollar. This has been the case with South Korea which now faces the fact that China is more important to its economy than the US. South Korea does not want to be involved with the US boycott of Huawei for this reason.
According to research organization the Observation for Economic Complexity, South Korea exported $160 billion worth of products to China, and just $73 billion to the US in 2018.
Global Times, which speaks for the Chinese Government, for its part, turned the tables on those assessments of South Korea abandoning China. Samsung has been “deeply” reliant upon China” and the company, it said, “can neither afford to lose the vast China market, nor a decline in its revenue if Huawei, one of the major purchasers of its memory products, turns its back.”
The newspaper did offer some incentives. It suggested that amid the US chip ban Samsung could assist Huawei “in a low profile way”, adding, “If Samsung could help Huawei get through these difficult times….[it] could greatly improve its prestige and regain its lost fame in the Chinese market.”
We interpret this to mean that South Korea may help Huawei "indirectly" obtain the knowhow from Samsung so that China can make the Samsung sanctioned products themselves neutralizing the US sanctions and rewarding South Korea with great amounts of additional business.
While Pompeo bewails that there is no NATO in Asia, which was once SEATO, the truth is that there will never be a NATO in Asia again and NATO itself is finished to all intents and purposes. As to NATO, the US will never used nuclear weapons to defend Germany incurring 200 million dead in the US. That is a giant fact the Europe better get to understand. South Korea and Japan clearly understood this when the US threatened to destroy North Korea while it could by a nuclear attack so that North Korea could not develop an ICBM that could reach the US. The South Koreans and Japan saw this to mean their countries were to be sacrificed by total destruction as they were within range of North Korean short-range nuclear missiles while the US was saved. The US defensive missile systems that they have are the equivalent of a Potemkin Village. The alliance had no meaning to the US unless it was in the US interest which had nothing to do with the goals of Japan and South Korea. Germany watched this also. Of course, this is elementary geopolitics. The Asian and European alliances of the US are are similarly Potemkin Villages essentially over though we have not gone through with the funeral arrangements as yet. It is a lot of sound and fury signifying nothing.
Samsung turns away from Huawei
By ANDREW SALMON
SEOUL – As a tech war rages between Beijing and Washington over Chinese flagship Huawei, indications are that South Korea’s national champion and global semiconductor powerhouse Samsung Electronics has sided with the US.
Widespread reports in South Korea that appeared in both TV and online news on Wednesday (September 9) stated that the country’s two major chipmakers, Samsung and its smaller rival SK Hynix, will cease supplying semiconductors to Huawei as of September 15.
“I understand that Samsung Electronics will stop shipping chips to Huawei from next Tuesday, though there is a possibility of selling products after winning US approval,” an industry observer said, according to South Korea’s semi-official news agency Yonhap.
That’s the same day the latest round of US tech sanctions on Huawei are scheduled to take effect. The accuracy of Wednesday’s reports, quoting anonymous sources, could not be immediately verified by Asia Times.
But unless there is a brilliantly conducted smokescreen operation in place, drawing a cloud over a secret Huawei-Samsung relationship, the reports synch with a range of developments, indications, analyses and rumors that Asia Times has recently closely monitored.
Commercial logic would dictate that Samsung – if forced to make a choice – would choose the US over China: It sells over twice as much product to the Americas as a whole than to China.
This year, Washington has tightened the screws on Huawei with a wide range of measures.
Those sanctions and bans have also cast shadows over companies that supply Huawei with components. If those companies fail to win US approval for their sales to Huawei, they could face the wrath of US regulators, including potential secondary sanctions.
“The key issue for Samsung is the level of support for sanctions placed by the US government from both short-term and long-term perspectives,” said Handel Jones, founder and CEO of International Business Strategies, or IBS, a US-based electronics-focused consultancy
Another fear that is likely causing hairs to turn gray in Samsung’s executive suites is how far a possible Chinese retaliation could reach. But beyond the chip sector, Chinese leverage over Samsung does not appear massively strong in other electronics sub-sectors.
In smartphones, Samsung has just a tiny share of the Chinese market. And in terms of 5G, it is equally positioned to benefit. Samsung has nothing to lose on Huawei’s home turf: It seems highly unlikely that it would have any significant opportunities to sell 5G equipment in China.
But, as Washington and its allies balk at using Huawei-made gear in the 5G network build-out that is underway globally, the Korean company is well-positioned to fill the Huawei vacuum.
The big question is how much damage Samsung could suffer in semiconductors – its biggest revenue stream and a sector that has been bolstered further amid Covid-19 lockdowns in 2020 – if China decides to play hardball in retaliation for South Korea’s snub of Huawei.
The company is often criticized for opacity, but it is difficult to fault its prudence: When asked by Asia Times about trade war issues and its Huawei ties, the company declined to comment.
Strained neutrality
The China-US decoupling presents unprecedented challenges to Samsung. The company faces all the high and rising geopolitical risks that South Korea does as a nation.
South Korea is strategically allied to the distant US: It has no mutual defense agreement with any other nation. However, its top trade partner is neighboring China.
According to research organization the Observation for Economic Complexity, the country exported $160 billion worth of products to China, and just $73 billion to the US in 2018.
And with the Chinese economy’s recovery from Covid-19 far outpacing America’s, China is looking ever more promising than the US for Korean exporters.
It is the modern iteration of an age-old regional conundrum. Positioned between China, Russia and Japan, Koreans have customarily referred to their strategic peninsula as “a shrimp between whales.”
Since the establishment of diplomatic relations with former Korean War foe Beijing in 1992, Seoul’s diplomats have walked this high-altitude tightrope without tripping. Now, 28 years hence, Beijing-Washington ties have plummeted to their lowest nadir since that year.
Seoul’s top diplomat openly admits the stresses.
“The biggest concern among foreign policymakers is the heightened tension between the superpowers,” fretted Seoul’s Foreign Minister Kang Kyung-wha at a forum on August 31.
“The competition began with trade disputes but has now expanded to a wider range of issues, including the economy, technology, military, security, politics and public health sectors.”
Beijing and Washington are both leaning on Seoul.
US Deputy Secretary of State Stephen Biegun, bemoaning the lack of a NATO-like structure in East Asia, recently spoke of expanding the “Quad” security alliance, comprising Australia, India, Japan and the US, to include South Korea.
That was pushing the diplomatic envelope. South Korean President Moon Jae-in had assured Chinese President Xi Jinping in 2019 that it would not join a Japan-US alliance. The Quad includes both.
Chinese diplomacy toward South Korea may be even more assertive.
China’s most senior diplomat, Yang Dechi, director of the Office of the Foreign Affairs Commission of the Communist Party of China’s Foreign Affairs Commission and a Politburo member, visited South Korea in late August for talks with Seoul’s National Security advisor Suh Hoon.
The agenda and outcome of those talks remain under wraps. And it is not known what proportion of carrots and sticks Yang deployed. But Beijing’s English language mouthpiece Global Times did not pull its punches in an August 21 piece that referenced the visit.
While South Korean media assumed that Yang and Suh’s key agenda was an anticipated state visit by Chinese President Xi Jinping later this year, the state-run Chinese media put Samsung-Huawei ties front and center in its article.
Samsung should “make the wise choice and flexibly maintain its cooperation with Huawei amid the US chip ban,” the paper advised. Reading between the lines, this suggests Huawei finds itself in a tight corner when it comes to sourcing high-end semiconductors.
Two manufacturers dominate the non-memory sector, supplying foundry services to make the most sophisticated logic chips, also known as system chips. Both are headquartered in countries that lie in the US’ orbit.
The first is the market leader, Taiwan-based Taiwan Semiconductor Manufacturing Company, or TSMC. The second – which is currently in the midst of an expansion from its globally dominant position in the simpler memory chip market to the more sophisticated, lucrative non-memory chips – is Samsung.
Chips are the top earner for Samsung, which does electronics nose-to-tail, B2B and B2C. Despite persistent fears in Seoul that Chinese competitors could overtake Samsung in chips, the company has a comfortable lead.
“Samsung entered semiconductors in the 1980s, but now it is very difficult to get into, it is capital intensive and knowledge-intensive,” an industry official told Asia Times.
In terms of dynamic random-access memory (DRAM), the most common type of random-access semiconductor memory currently in use, “the number of processes you have to duplicate are in the hundreds, not the dozens, and there are lots of physics-challenging components,” the official said. “This requires decades of know-how.”
IBS estimates that Samsung is 12-18 months ahead of all competitors in DRAM. “China will find it difficult to organically close the gap with industry leaders,” Fitch Ratings added in a July report.
Global Times, for its part, turned the tables on those assessments. Samsung has been “deeply” reliant upon China” and the company, it said, “can neither afford to lose the vast China market, nor a decline in its revenue if Huawei, one of the major purchasers of its memory products, turns its back.”
The newspaper did offer some incentives. It suggested that amid the US chip ban Samsung could assist Huawei “in a low profile way”, adding, “If Samsung could help Huawei get through these difficult times….[it] could greatly improve its prestige and regain its lost fame in the Chinese market.”
The Global Times is known for floating trial balloons and for aggressive pro-Beijing messaging. But Koreans will get its gist immediately, for they have real reasons to fear.
In 2017, after Lotte Group supplied Korean land for a US anti-missile defense system that irked Beijing, it faced boycotts in China and ultimately withdrew from China’s retail market. “Any blow felt by China could also be felt by South Korean firms in the semiconductor sector,” Global Times added.
However, Global Times may not be aware of Samsung’s 107 trillion won (US$899 billion), war chest. It may also overstate commercial ties linking Samsung and Huawei. Those ties have not been made public by either party. According to Wednesday’s South Korean news reports, Huawei is Samsung’s fifth-biggest customer globally.
And China itself is not the premier market for Samsung. The Americas (as a whole) buy more than twice the amount of product that Samsung sells to China.
According to Samsung Electronics’ 2020 Sustainability Report, in 2019, the company sold 79 trillion won ($66.5 billion) worth of products to the Americas, and 36 trillion ($31.9 billion) to China. Overall, its sales ratio was 32% to the Americas – the highest percentage in the world – compared to 16% to China.
In both categories, total sales and sale ratios, China lagged behind the Americas and Europe.
Forced to leap westward?
Samsung’s chip-manufacturing archipelago is diverse.
Among its major facilities, its core DRAM and NAND memory plants are in Korea, south of Seoul, and in Pyeongtaek, a port on the Yellow Sea. Pyeongtaek also possesses foundry facilities.
Overseas, it has a US foundry in Texas, in addition to its NAND plant in Xian, China.
The question is how far the cross-Pacific trade war will affect this vast operation. “The negative impact is reduction in flexibility of Samsung’s participation in the China market,” said IBS’ Jones.
Certainly, Samsung has been trying to hedge. Samsung vice-chairman Lee Jae-yong visited China in May, where party officials requested cooperation in logic chips, among other sectors. But mounting indications are that Samsung is leaning westward.
On September 2, Samsung pulled out of a Chinese liquid crystal display plant. In August, Samsung announced it was closing its last personal computer factory in China. Those closures follow the shuttering of all of Samsung’s smartphone plants in China.
Another clue to Samsung’s Huawei logic chip stance was reported in South Korea’s Korean-language Joongang Ilbo. The Joongang Media Group has traditionally had close ties with Samsung’s Lees, so is widely seen as a sound source on the conglomerate’s moves.
The paper reported that on June 17 Samsung turned down Huawei’s request to manufacture an application processor (AP). Even though the article noted that Samsung possesses foundries with European and Japanese equipment, Samsung reportedly rejected the request to service Huawei “…in consideration of US policy.”
As per new US policy, companies which supply Huawei with chips using American equipment are required to obtain US licenses. The tricky issue is how to define US equipment, as the value chain is fiendishly complex. In addition to actual machinery, the US could crack down on firms using US design solutions, tools and materials.
“You have the value chain of design, the foundry, the equipment used in the foundry that is from all over the world, and then you have software design, tools which are dominated by the US,” said Mark Newman, a senior analyst at Bernstein and former Samsung employee.
“Though Huawei wants to increase purchases from Samsung, such as APs, Samsung is likely to stop selling due to strengthened US regulations,” Song Jae-yong, AmorePacific Professor of Business Management at Seoul University Business School, predicted prior to Wednesday’s news.
Meanwhile, Samsung is winning big order after big order for non-memory chips from major US clients. Last month, IBM and this month gaming company Nvidia announced major foundry contracts with the Korean firm. And on September 9, specialist US tech media reported that Qualcomm will use Samsung to make its mass market 5G Snapdragon 4 chipset.
Such deals, however, are likely unrelated to US policy: Due to the complexity of logic chip roadmaps, they have probably been months or even years in the making.
Still, it might have been sensible for Samsung to wait out the US election before setting any policy on Huawei in stone.
After all, if trade warrior and China basher Donald Trump loses the upcoming presidential election, a Joe Biden administration could move to restore calm and predictability to global supply chains.
The imminence of US measures against Huawei, and possibly its suppliers, may have compelled South Korea’s chip makers to jump earlier than they may have liked. That conclusion is supported by at least one Samsung watcher.
“I don’t think Samsung knows how to navigate this [new] world,” said Geoff Cain, author of Samsung Rising. “I think they are not strategic, they are reactive.
David Lifschultz
THE LIFSCHULTZ ORGANIZATION
DAVID@LIFSCHULTZORGANIZATION.COM
______________________________________________________
Guest Posting
If you wish to write and/or publish an article on Operation Disclosure all you need to do is send your entry to UniversalOm432Hz@gmail.com applying these following rules.
The subject of your email entry should be: "Entry Post | (Title of your post) | Operation Disclosure"
- Must be in text format
- Proper Grammar
- No foul language
- Your signature/name/username at the top
______________________________________________________
If you wish to receive the daily Operation Disclosure Newsletter, you can subscribe here.
______________________________________________________
Our mission at Operation Disclosure is to bring you important news events and raw intel from various sources focused on exposing the Deep State/Cabal and their downfall. We are also focused on disclosing our lost ancient origins and extraterrestrial contact.
Disclaimer: All articles, videos, and images posted on Operation Disclosure were submitted by readers and/or handpicked by the site itself for informational and/or entertainment purposes. All statements, claims, views and opinions that appear on this site are always presented as unverified and should be discerned by the reader. We do not endorse any opinions expressed on this website and we do not support, represent or guarantee the completeness, truthfulness, accuracy, or reliability of any content posted on this website.
Copyright © 2020 Operation Disclosure
