US Benchmark Interest Rate Hiked by 0.25%P, SK Hynix Discusses US Production

The US Federal Reserve (Fed) raised its benchmark interest rate by 0.25%p, adjusting it from 3.75-4.0% to 4.0-4.25%. This rate hike was unanimously decided by the 12 members of the Federal Open Market Committee (FOMC).

The rate hike is analyzed as a measure taken due to the recent improvement in economic growth, strong corporate earnings, and a robust job market, which have created the necessary conditions for such a move.

Two members expected the current level to be maintained, while four members anticipated two more hikes.

As most members signaled the possibility of further rate hikes, the Fed's tightening stance is expected to continue for some time.

Chair Nossy showed a cautious stance, stating that he would not provide forward guidance and refraining from publishing the dot plot.

Reporter Kwon Soon-woo analyzed that "raising it now would have been more advantageous for market response than delaying it."

Former President Donald Trump argued that US interest rates should remain below 1%. He cited America's high creditworthiness as a reason for needing lower rates.

Additionally, former President Trump advocated for a tough shift in trade policy, claiming that the US would earn $1.5 trillion annually if it ceased trade with all countries with which it has a trade deficit.

After the rate hike announcement, the US stock market saw the Dow Jones Industrial Average fall by over 1%, while the S&P and Nasdaq showed slight weakness. This is seen as a moderate impact, as the rate hike was within market expectations, preventing a major crash.

This suggests that the dot plot is more an indicator of current policy intentions than a definitive forecast of the future.

With most members keeping the possibility of further rate hikes open, the market anticipates a continuation of the Fed's tightening stance.

He stated that each must maintain their own domain and that independence is reciprocal.

Chair Powell emphasized the need for those in charge of monetary and fiscal policy to avoid encroaching on each other's territory, advocating for a clear division of roles.

Reuters, citing multiple sources, reported that SK Hynix is discussing various options with Intel for building a factory in the US. This news is drawing attention in light of delays in completing Intel's Ohio plant due to foundry yield issues.

Following this news, Intel's stock rose 4%, while SK Hynix's ADR closed flat.

SK Hynix's push for US production faces many negative factors, including high costs, labor supply issues, and concerns about the leakage of national core technologies. Despite these challenges, the only reason for considering US production is analyzed to be strong pressure from the US government and tariff policies.

While a decline in profitability is expected with US production, it is seen as an unavoidable choice due to geopolitical factors.

Reporter Kwon Soon-woo stated, "We'll have to give up the Chinese domestic market," anticipating a 10-15% loss of market share in China.

If the US demands some semiconductor production within the US for security reasons, the share of companies that once held 70% of the global market could drop to around 50%.

These changes are likely to be driven by geopolitical factors rather than technological competitiveness.

Ultimately, the global semiconductor market is likely to be restructured not by stable technological competition but by the political and economic interests of individual countries.

Recently, several controversies have emerged concerning some labor unions, including personal mileage accumulation for equipment purchases, allegations of purchasing vests from a father-in-law's company, and referral to prosecutors over personal information issues.

Reporter Kwon Soon-woo mentioned, "There was an instance where they were referred to prosecutors over personal information issues, and they spent 20 million won on petitions, among other controversies," indicating that questions are being raised about the transparency of union activities.

This illustrates one facet of changing global labor relations.

This phenomenon shows a trend where unions, unlike in the past, focus on practical gains rather than merely solidarity as the disadvantaged, leading to calls for a re-evaluation of unions from a progressive perspective.

New forms of unions are emerging, such as MG Union, which prioritize the practical gains of individual unions over solidarity. This phenomenon contradicts the past image of unions advocating for solidarity among the disadvantaged.

Reporter Kwon Soon-woo said, "If a strong union says, 'I'll take my share, you weak ones fend for yourselves,' then even progressives start to question, 'Are they truly progressive?'" suggesting a deepening debate within progressive circles regarding their perception of unions.

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