Since the 2018 US-China trade conflict, the share of Chinese products in the US semiconductor import market has been cut by one-third, while the share of Korean products has only increased slightly. It was analyzed that Taiwan filled the gap left by the decline in Chinese products.

The Federation of Korean Industries analyzed the market share of major countries in the U.S. semiconductor import market following the 2018 U.S.-China trade conflict.

As a result, Taiwan (+9.7%p) and Vietnam (+7.3%p) took advantage of China's decline in market share (-18.5%p) from 2018 to 2022 to rapidly increase their market share and strengthen their position as semiconductor production bases.

Although Korea's market share also increased, the increase (+1.8%p) was found to be relatively small.

By country, China's share will fall by a third, from 30.2% in 2018 to 11.7% in 2022.

China maintained the top market share throughout the 2000s, but began to decline after 2018, falling to fourth place in 2022.

Taiwan's market share doubled from 9.5% in 2018 to 19.2% in 2022, rising from fourth place to first.

South Korea, which benefited from the memory boom in 2017 and 2018, rose to third place in market share in 2017 and maintained that position in 2022 due to China's weakening position.

Comparing Korea and Taiwan, Korea's market share exceeded Taiwan's by 1.3 percentage points in 2018, but due to Taiwan's recent rapid increase in market share, Korea's market share is expected to fall below Taiwan's by 6.6 percentage points in 2022, widening the gap between the two countries.

Since 2018, the United States has imposed various regulations, including import tariffs and export restrictions on Chinese companies, citing national security and strengthening its own supply chain.

First, additional tariffs of 10-25% were imposed on public imports three times in 2018, and this trend continued in 2019.

During the same period, the United States used the Entity List to restrict the export of parts and equipment made directly using American technology or software. As a result, sanctioned Chinese companies have had difficulty producing semiconductors and strengthening their semiconductor capabilities.

Taiwan and Vietnam have reportedly taken advantage of China's weakening position in the US semiconductor import market, which accounts for 33.4% of the country's total imports of computer parts, to increase their market share and enjoy windfall profits.

In the area of 'computer and other parts', the US imports from China decreased by $9.67 billion (-58%) from 2018 to 2022, but during the same period, imports from Taiwan increased by $7.56 billion (+327%), imports from Vietnam increased by $3.51 billion (+4038%), and imports from Korea increased by $2.58 billion (+52%), quickly filling the gap left by China.

As a result, from 2018 to 2022, 'computer parts, etc.' contributed 15.0%p to the decline in China's share of the US import market, while contributing 6.8%p, 3.5%p, and 1.0%p to the increase in Taiwan, Vietnam, and Korea's share of the US import market, respectively, indicating that this item played a key role in the restructuring of the US semiconductor import structure.

Taiwan and Vietnam have accelerated their market share expansion by strengthening their positions in high-growth items within the U.S. semiconductor import market.

First, imports of ‘other electronic integrated circuits’ from the U.S. increased by 77% (from $8.53 billion to $15.13 billion) from 2018 to 2022, and among these, imports from Taiwan increased by 119% (from $1.84 billion to $4.03 billion), contributing 1.6 percentage points to the expansion of Taiwan’s share of the U.S. import market.

The U.S. imports of items such as LEDs and solar cells/solar modules increased by 135% (from $5.61 billion to $13.16 billion) from 2018 to 2022, and among these, the import amount from Vietnam increased by 874% (from $390 million to $3.80 billion), leading to a 135% increase in imports from Vietnam.It contributed 3.3 percentage points to expanding the U.S. import market share.

Choo Kwang-ho, head of the Economic and Industrial Division of the Federation of Korean Industries, pointed out that “the countries that benefited the most from the restructuring of the U.S. semiconductor import market following the U.S.-China trade conflict in 2018 were Taiwan and Vietnam, while Korea’s market share only saw a slight increase.”

Vice Minister Choo emphasized, “As our government has recently been accelerating efforts to improve the domestic investment environment, including expanding tax credits for investment in advanced strategic industries and expediting investment permit processing, we should use the restructuring of the global supply chain as a turning point to strengthen the domestic semiconductor production base and diversify semiconductor export items.”