National core technology designation for semiconductor and display production equipment to be delayed to December

The government attempted to designate semiconductor and organic light emitting diode (OLED) display equipment technology as a national core technology but postponed it due to oppositions from the industry and stakeholders.

According to industry sources, the Ministry of Trade, Industry and Energy (MOTIE) planned to revise and announce semiconductor and OLED production equipment technology to be a national core technology this month. To do so, MOTIE and the National Intelligence Service Industry Confidentiality Protection Center have held numerous Industrial Technology Protection Committee meetings for various semiconductor and display sectors. The decision, however, has been delayed until December.

The postponement seems due to many complaints that this was a de facto ban on exports to China, which emerged as the industry’s major issue, and this caused the National Assembly to be interested in the issue. It means that the government deemed it difficult to push forward with the revision and notification process.

At the end of last year, the government and some of the large corporations opined to add "OLED equipment technology" to the list of the national core technologies based on the determination that industrial technology is frequently leaked to China. The opinion of Samsung Display has been paricularly strong because it believes that the Edge OLED panel production technology has been leaked to China duing the "TopTek incidents"

In the meantime, there has been a hidden move to designate semiconductor equipment as a national core technology. There are seven national core technologies in the semiconductor field including 'Design, Process, Device Technology, and 3D Lamination Technology correspond to 30nm or less DRAM'. The government attempted to add the word 'equipment' to some of the seven items.

When the word "equipment" is included in the national core technology items of semiconductor or display, the exports of such items to China must be approved by or declared to the government. Technology developed with government support for research and development (R & D) expenses must obtain approval, otherwise, the declaration is required. If equipment technology is designated as the national core technology, most medium and small equipment companies that deal with Samsung Electronics, SK Hynix, Samsung Display, and LG Display must go through the approval or declaration process for exports.  

The equipment industry opposed the argument that national core technology is a de facto strict export regulation. Export approval is made by the Industrial Technology Protection Committee, which is held once every 2-3 months, making it difficult for companies to react to the demands of foreign customers including China.

An official of a large enterprise said, "We need to ensure that core technology is protected while exports to China can be achieved through mutual consultation among stakeholders." However, an official in the industry said, "It is difficult to say that there was sufficient consensus. They tried to discuss on their own behind doors under the name of ‘Committee’ and proceed with the revision. They postponed it only because there was strong opposition.”