Logo of Phnom Penh Post newspaper Phnom Penh Post - US’ Russia sanctions may hit Korea’s chip, auto industries

US’ Russia sanctions may hit Korea’s chip, auto industries

Content image - Phnom Penh Post
Ukraine forces stand by to respond to Russia’s military offensive near the eastern border. AFP

US’ Russia sanctions may hit Korea’s chip, auto industries

As the US Biden administration imposes economic sanctions against Russia for invading Ukraine, South Korean firms including Samsung Electronics and SK hynix are expected to take collateral damage.

On February 25, President Joe Biden unveiled comprehensive economic sanctions to cripple the Russian economy. The sanctions would limit the export of products that can potentially increase Russia’s ability to advance its military and aerospace sector.

The sanctions would prohibit companies from selling products such as telecommunications equipment, lasers, sensors and of course, chips to Russia. For Samsung Electronics and SK hynix, who sold chips worth 88.5 billion won ($73.5 million) to Russia last year, the damage is inevitable unless they find an alternative market.

“All the chips in the market are based on designs by US companies, including those manufactured by Samsung Electronics and SK hynix,” a chip industry official said.

Korean Society of Semiconductor and Display Technology chairman Park Jae-geun expressed concerns that demand on the entire consumer electronics could slow down.

“The sanctions will indirectly limit the sales of chips that go inside Russian smartphones, laptops and data centers. This can curb the demand on consumer electronics and dampen the chip market,” Park said.

Korean-made cars and auto equipment, which take up 25.5 per cent and 15.1 per cent of Korea’s exports to Russia, are expected to take a hit as well.

As auto chips are manufactured by five major companies – NXP of the Netherlands, Infineon of Germany, Renesas of Japan, Texas Instruments of the US and STMicroelectronics of Switzerland – Korean cars mounted with those chips are likely to face restrictions in the Russian market.

In 2014, when Russia forcefully annexed Crimea, Korea’s export of cars and tires plunged 62.1 per cent and 55.7 per cent, respectively.

Hyundai Motor and its sister company Kia, who run factories that churn out 230,000 cars per year in Russia, are within the range of the sanctions. More than 90 per cent of Korean auto parts exports to Russia go to the two automakers.

“Last year, Korea exported auto parts worth $1.5 billion. For domestic parts companies, Russia is the biggest market next to the US and China. Due to the sanctions, they will be forced to supply their products to somewhere else, but those who can’t will take a hit,” an auto parts industry official said.



  • Angkor lifetime pass, special Siem Reap travel offers planned

    The Ministry of Tourism plans to introduce a convenient, single lifetime pass for foreign travellers to visit Angkor Archaeological Park and potentially other areas. The move is designed to stimulate tourism to the culturally rich province of Siem Reap as the start of the “Visit

  • Ice cream, noodles flagged over carcinogen

    The General Department of Customs and Excise of Cambodia (GDCE) has identified three types of instant noodles and ice cream trademarks originating from Thailand, Vietnam and France that are suspected to contain ethylene oxide, which poses a cancer risk to consumers. The general department has

  • Exclusive interview with Josep Borrell Fontelles, High Representative of the EU

    CAMBODIA is hosting the 55th ASEAN Foreign Ministers’ Meeting (AMM) and Related Meetings this week with top officials from the US, China, and Russia and other countries in the region slated to attend and to meet with face-to-face with their counterparts on the sidelines. In

  • Rise in Thai air routes to Siem Reap fuels travel hopes

    Local tourism industry players are eager for regional airline Bangkok Airways Pcl’s resumption of direct flight services between the Thai capital and Siem Reap town on August 1 – home of Cambodia’s awe-inspiring Angkor Archaeological Park – which is expected to boost the growth rate of

  • ASEAN Foreign Ministers’ meet commences, Taiwan issue possibly on table

    The 55th ASEAN Foreign Ministers’ Meeting (AMM) and related meetings hosted by Cambodia kicks off in Phnom Penh on August 3, with progress, challenges, and the way forward for the ASEAN Community-building on the table. Issues on Taiwan, sparked by the visit of US House Speaker

  • Recap of this year’s ASEAN FM meet and look ahead

    This year’s edition of the ASEAN Foreign Ministers’ Meeting (AMM) hosted by Cambodia comes against the backdrop of heightened global tensions and increasing rivalry between major powers that have been compared to the animosity of the Cold War era. The following is The Post’