Seoul [South Korea], August 12 (ANI): South Korea has urged the United States to grant leniency to its companies in an ongoing probe into imported polysilicon, warning that broad restrictions could hurt both nations' clean energy and semiconductor industries, The Korean Herald reported.

According to a filing published by the US Bureau of Industry and Security, Korea's Ministry of Trade, Industry and Energy asked Washington to apply 'flexible consideration' for Korean firms as the US reviews whether low-priced polysilicon imports threaten its domestic industry under Section 232 of the US Trade Expansion Act of 1962. The investigation, launched on July 1, is examining the potential national security risks of foreign-made polysilicon, a crucial material for solar panels and semiconductors.

'Korea is a net importer of high-quality polysilicon from the United States. At the same time, Korea and its companies have established a secure supply chain for polysilicon to US importers and US companies,' the ministry said in its submission. 'If import restrictions on polysilicon are introduced, we respectfully request that special consideration be given to allow for flexible application to Korean companies.'

Global polysilicon prices have plummeted in recent years, largely due to China's dominance in the sector. Backed by state support, China now produces nearly 80 per cent of the world's supply, with prices around USD 5 per kilogram, far below the USD 18 to USD 25 range for equivalent non-Chinese products, according to IBK Securities. US officials have said such pricing pressures are forcing local plants to shut down.

Korea warned that limiting imports could undermine Washington's own push to boost domestic manufacturing of solar panels and chips. It cited examples of Korean firms such as Hanwha Qcells and OCI Holdings that are deeply involved in US renewable energy projects. 'Korean-invested companies that are helping to grow US renewable energy and semiconductor manufacturing are importers of polysilicon, as well as consumers of US-produced polysilicon,' the ministry noted. 'Broadly applied tariffs or other import restrictions... risk disrupting supply chains that are important to both economic and national security.'

Hanwha Qcells and OCI Holdings stressed in their separate statements that their supply chains avoid low-cost Chinese polysilicon. Hanwha Qcells mainly sources from OCI's Malaysian facilities, while OCI's US subsidiary, Mission Solar Energy, uses Malaysian polysilicon to manufacture modules in the United States.

Industry sources have cautioned that overly broad restrictions could backfire. 'US polysilicon production is currently limited, while US demand for power is surging,' one source said. 'If broad import restrictions are implemented in this environment, even companies from allied nations that are building supply chains and investing in US manufacturing could face indirect damage.' (ANI)