The U.S. Customers Require Korean Fabless To Provide Non-Chinese-Made Certificates

On September 29, South Korean media reported that semiconductor customers in the U.S. require suppliers to provide certificates of origin to prove that the products are not produced by Chinese foundry, even if it’s designed by Korean semiconductor fabless.

 One South Korean company recently received stricter requirements from a U.S. customer, such as to attach the non-China origin indication in the contract. Another company that supplies semiconductors to the U.S., has withdrawn plans for mass production at SMIC, a CCP controlled foundry, due to U.S. export restrictions. A chip industry official said from this July to August, the demand to provide the origin of semiconductors to exclude Chinese-made products is spreading in the industry. Many U.S. customers are avoiding damages caused by sanctions from the U.S. government. Some companies have even changed the name of country of origin of their Taiwanese foundry from “Republic of China” to “Taiwan” to avoid confusion.

 The Chips and Science Act of 2022 lists the sanctions against the Communist China to exclude Chinese products as well as restrictions on exports of materials, parts, and equipment. Now even the semiconductors that are at the bottom of the finished product must prove that the country of origin is not Communist China.

 The president of the Korea Fabless Association believes that a supply chain restructuring is highly likely to occur to meet U.S. customers, which could be an opportunity for the Korean fabless.