Japan to Make Semiconductor Materials Exports Harder
01 July, 2019
Tokyo said Monday it will tighten restrictions on the export of high-tech material used in semiconductor chips and smartphones in a potential blow to Korean manufacturers.
A day earlier the Sankei Shimbun reported that the decision came after Japanese Prime Minister Shinzo Abe found no time to sit down with President Moon Jae-in on the sidelines of the G20 Summit in Osaka.
President Moon Jae-in (right) moves into a conference room after shaking hands with Japanese Prime Minister Shinzo Abe at the G20 Summit in Osaka, Japan on Friday. /Yonhap
The two countries are at loggerheads over Korean court rulings that Japanese companies must compensate Korean victims of forced labor during World War II.
The retaliation Tokyo has arrived at is to toughen export regulations on three items that are essential for the production of semiconductors, televisions and smartphones from Thursday.
They are fluorinated polyimide, high-purity hydrogen fluoride, and photoresist, whose world market is controlled to the tune of 70 to 90 percent by Japan.
The Sankei called the decision "retaliation" for Korean courts ordering the seizure of assets of Japanese companies that failed to comply with the compensation order.
Samsung Electronics, Samsung Display and SK Hynix were shocked at the news.
Tokyo has put 27 countries on a "whitelist" for export restrictions so they do not have to seek permission every time they want to buy certain high-tech goods. Korea has been on the whitelist since 2004, but the new curbs would exclude it.
Now Tokyo can simply drag its heels in giving out case-by-case permits for the export of those items to Korea, which could paralyze the production of semiconductors and OLED displays starting in August, since manufacturers here have only about a month's worth of inventories.
But the restrictions would also hurt Japanese suppliers to Samsung and SK Hynix, the world's largest and second largest makers of DRAM memory chips, who are among their biggest customers.
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