FirstFT: US asks South Korea not to fill market gap if China bans Micron chips

Ahead of a state visit by President Yoon Suk Yeol to Washington today, the White House has asked South Korea to urge its chipmakers not to boost sales to China should Beijing ban Micron from selling chips, people familiar with the situation said.

China this month launched a national security review into US-based Micron, one of three dominant players in the global Dram memory chip market alongside South Korea’s Samsung Electronics and SK Hynix. US officials and business executives believe this is retaliation for President Joe Biden’s moves to prevent China from obtaining or making advanced semiconductors.

It is unclear whether punitive action will be taken after the probe, but with mainland China and Hong Kong generating 25 per cent of its $30.8bn in revenue last year, the stakes are high for Micron.

The case has emerged as a litmus test of whether Beijing is willing to take coercive economic measures against a major US company for the first time. While the US has worked with allies to counter China in the security area in the Indo-Pacific, this is the first known occasion that it has asked an ally to enlist its companies to play a role.

Here’s what else I’m keeping tabs on today:

• Results: Troubled lenders Credit Suisse and First Republic Bank report, as will The Coca-Cola Company, Philips and Vivendi.

• EU meeting: The bloc’s Foreign Affairs Council meets in Luxembourg to discuss Russia’s war on Ukraine.

• Economic data: Ifo has its business climate index for Germany and Rightmove publishes its house price index for the UK.

Five more top stories

1. EXCLUSIVE: Santander is in talks to hire several of Credit Suisse’s top investment bankers in New York, according to people familiar with the matter, as it seeks to capitalise on the Swiss lender’s emergency rescue by UBS. Find out which bankers the Spanish group has spoken to.

2. Investors are underestimating how high eurozone borrowing costs will rise, the head of Belgium’s central bank told the Financial Times. Pierre Wunsch, who sits on the European Central Bank’s rate-setting council, said he would agree to halt interest rate rises only if wage growth slowed.

3. Tougher UK legislation on workplace sexual harassment is set to be shelved after a flurry of amendments from Conservative peers stymied its progress through parliament. Groups that urged ministers to prioritise the long-awaited legislation in the wake of the CBI rape allegations have accused the peers of seeking to “wreck” the bill.

4. Jeff Shell will step down as NBCUniversal chief executive after an “inappropriate relationship” with a female colleague, parent company Comcast said yesterday. A complaint had prompted an investigation led by outside counsel into the 19-year veteran of the company.

5. US president Joe Biden’s Inflation Reduction Act may actually complicate efforts to reduce inflation, critics ranging from Bank of America to BlackRock’s Larry Fink have warned, though it has sparked an investment boom. Here’s why the scale of the federal handouts is causing worry.

The Big Read

The weeks since Silicon Valley Bank collapsed on March 10 have brought an uncomfortable realisation — the problems that provoked the biggest bank run in history were neither a freak occurrence nor an unforeseeable emergency. Ahead of the first official postmortem on its failure, almost everyone agrees that the crisis had been hiding in plain sight.

We’re also reading . . . 

Chart of the day

Technology businesses drove profit warnings by UK-listed companies in the first quarter to their highest for the period since the onset of the Covid-19 pandemic in 2020, as economic uncertainty led to delayed and cancelled contracts.

Take a break from the news

On the Weekend podcast, presenter Lilah Raptopoulos speaks to Pulitzer Prize-winning playwright Suzan-Lori Parks about her new show Plays for the Plague Year, which asks us to remember, process and grieve the pandemic.

Additional contributions by Annie Jonas and Emily Goldberg