New government “transferring commerce business” controversy
Industry criticizes “Not knowing Industries reality”
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The semiconductor industry criticized on the new government's controversy over the transferring ministry of commerce business, saying, "It is armchair argument that does not know the reality of companies and industries." They criticized that government was too free even though there were silent industrial wars such as the semiconductor supply chain turmoil and the leakage of high-end technology. They pointed out that further specializing in industry-oriented commerce business accumulated over a decade is a "fire drops on the foot."
Seo-gyu Lee, chairman of the Korea Fabless Association, said, “As the global industrial structure becomes increasingly complex, it is important to specialize in commerce business covering global imports and exports, customs duties, and logistics. Organizations that communicate closely with businesses should take on normal business.” A anonymous representative of a semiconductor equipment company said, “Usually, it is standard that commerce business working with the national semiconductor nurturing industry strategy. It should be led by a ministry that is familiar with industrial policy.” Currently, they are against of the Ministry of Trade, Industry and Energy handing over the commerce business to the Ministry of Foreign Affairs.
The industry pointed out that commerce business is not only a matter of corporate survival but also about national security. The U.S.-China trade conflict, semiconductor supremacy war, Japan's export regulations, and semiconductor supply difficulties have been experienced one after another recently. The U.S. Department of Commerce's request for information that is almost like trade secrets from major global semiconductor companies, including Korea, last year also adds to the sense of crisis. It also played a role in the overall industry being hit by the supply shortage of semiconductors including automobiles and home appliances.
If semiconductor market, which accounts of 20% of whole exports, is shaken, South Korean economy will also collapse. In this timing, there are voices that transferring commerce business from industry-base into diplomacy-base is an anachronism.
The government's commerce business was transferred from the Ministry of Trade and Industry (currently the Ministry of Trade, Industry and Energy) to the Ministry of Foreign Affairs and Trade in 1998. Afterwards, it was transferred back to the present Ministry of Trade, Industry and Energy in 2013. Jae-geun Park, president of the Korean Society of Semiconductor & Display Technology (Professor at Hanyang University), said, “The Ministry of Trade, Industry and Energy has accumulated (by taking charge of commerce) the current global network and expertise. If they transfer it to the Ministry of Foreign Affair, there will be an inevitable gap that will damage our companies in the rapidly changing market.”
The industry also demanded strong governance to survive the global semiconductor war by expanding cooperation between the Ministry of Trade, Industry and Energy and the Ministry of Foreign Affairs. It is a demand to prepare for the battle for semiconductor supremacy by adding national diplomatic capabilities to industry-based trade functions.
They also suggested alternative solution to establish ‘Control Tower’ to provide cooperation between the Ministry of Trade, Industry and Energy and the Ministry of Foreign Affairs. Policy Coordination Bureau of Ministry of Economy and Finance has been assigned with similar task so far as a senior government department. However, their position has been narrowed due to the frequent government reorganization. A semiconductor manufacturer official said, “Control tower should be made into an organization similar to the presidential committee, rather than simply placed in a one of the ministries. They have to utilize commerce business function from economy·security side.” President Park (the Korean Society of Semiconductor & Display Technology) also added, “The voice of the industry will be actively reflected only when they form a public-private joint committee that has significantly increased the participation of the private sector, including companies from the field.”
There was also an opinion that the semiconductor·display department, which is currently at the ‘Department’ level, should be upgraded to the 'Bureau·Office' level.
By Staff Reporter Dong-jun Kwon (djkwon@etnews.com)