The country’s commerce minister told CNBC that South Korea is closely monitoring the Russia-Ukraine crisis to assess its impact on energy prices, or the potential for supply chain disruptions.
“I think first, we are closely monitoring the spike in energy prices,” Yeo Han-koo said, adding that 92 percent of South Korea’s demand is being met by energy imports.
“Some of these supply chains in [the] The manufacturing sector could also bear these potential geopolitical risks,” he told CNBC’s Chery Kang. “So we’re taking all of these policy measures in response to this potential risk.”
Tensions between Russia and Ukraine Yes add in recent months as Russia has bolstered its military along its border with Ukraine.
A senior Biden administration official said Wednesday that about 7,000 troops have joined the 150,000 who have been near the border in recent days. That is though statement of the Russian government A day earlier, the Kremlin had begun withdrawing part of its troops along the Ukrainian border and returning them to their bases.
We believe that no one country can own the entire supply chain in the semiconductor sector or any other industry.
Yeo Han-koo
Finance Minister of Korea
Military tensions have raised concerns that Russia may be preparing to invade the country, and have raised concerns that the Kremlin will repeat its 2014 annexation and illegal occupation of Crimea. repeatedly denied those allegations.
The price of gasoline is like the price of oil rose after those tensions, but traded lower on Thursday.
‘Early warning system’ for supply chain
The finance minister told CNBC his country is taking steps to manage its supply chain risks.
Some of South Korea’s main exports include automobiles, chips and other electronic devices.
Yeo said the government is trying to figure out which key raw materials might be vulnerable.
“We are trying to identify all these critical raw materials that can disrupt our supply chain and then, for example, if we depend on one or two countries [for] Too much of this vital raw material can also hurt,” he said.
South Korea is also trying to develop an “early warning system” at risk some these main materials. “If there is some kind of sign or red mark in the supply chain, [we could] before responding to that potential threat immediately,” he added.
If necessary, a reserve system or some kind of swap system could be developed with other countries, Yeo said.
‘No country’ owns the chip supply chain
As global chip shortage Yeo called for international cooperation to solve the problem.
South Korean tech giant Samsung, along with Taiwan TSMCThe current dominate the world’s chip production.
“Korean companies play a very important role in this semiconductor supply chain,” Yeo said. “We believe that no one country can own the entire supply chain in the semiconductor sector or any other industry.”
Happenning chip supplies have affected production In a number of industries – from cars to consumer devices, personal computers and smartphones, semiconductors are required.
“It is very important to maintain really close international cooperation in managing this important semiconductor, battery or electric vehicle supply chain,” said Yeo. He added that South Korea is developing a “network of partnerships” in the semiconductor sector and other key industrial supply chains.
