South Korean tech giant Samsung Electronics Co, the world’s biggest smartphone and memorychip maker, yesterday said that it is seeking alternatives to Japanese suppliers for some key materials amid a bitter trade dispute between Seoul and Tokyo.
The row has seen the Japanese government impose restrictions on chemical exports crucial to chipmaking and last week Seoul and Tokyo removed each other from their “white lists” of trusted trading partners.
Two of the Japanese chemicals targeted, hydrogen fluoride gas and photoresists, are essential to making memory chips, while the third chemical, fluorinated polyimide, is used for high-spec TV screens and smartphone displays, including hotly anticipated folding models from Samsung.
Tokyo’s move has also raised international concern about the effect on global supply chains and possible price hikes for consumers worldwide.
A Samsung spokesperson told reporters that the firm was “seeking ways to diversify” supplies of materials and components where it relied heavily on Japanese imports.
Analysts have warned that the restrictions — and reduction in the availability of the materials — would “significantly impede” chip producers.
Japan holds a 60 to 70 percent share of the global hydrogen fluoride market, according to Taipei-based market intelligence firm TrendForce Corp (集邦科技), which could make it difficult for South Korean companies to find alternatives elsewhere.
However, the Samsung spokesperson denied a South Korean media report that the firm had decided to replace all the approximately 220 Japanese chemicals and materials it uses for chip production with South Korean or overseas products.
Japanese Chief Cabinet Secretary Yoshihide Suga yesterday said that Tokyo’s downgrading of South Korea’s trade status was not intended as retaliation for disputes over court rulings ordering Japanese companies to pay compensation for their treatment of Korean workers during World War II.
“The revision was a necessary step for Japan to appropriately carry out its export control system from a national security point of view,” Suga said. “It was not intended to affect Japan-South Korea relations, let alone economic countermeasures or retaliation.”
A decision by the Japanese Cabinet on Friday last week to drop South Korea from a list of countries granted preferred trade status became official yesterday when it was published in its official gazette.
The measure is to take effect on Aug. 28.
The measure only puts South Korea back to a standard class, or second tier of four divisions, Suga said.
“It’s not an export ban,” he said.
Additional reporting by AP
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