South Korean firms scrambling because of export restrictions by Japan

South Korean firms scrambling because of export restrictions by Japan

It has been a month since the government of Japan tightened their controls on their exports to South Korea of the three items that include hydrogen fluorides that are used in the production of semiconductors.

Up till now, there had been no noticeable impact on the production or the corporate performance in both Japan and South Korea. However, the South Korean firms are still moving for increasing their stocks of the 3 products and diversifying their suppliers. In the meantime, some of the Japanese companies are getting increasingly concerned regarding the future.

The Minister of Economy, Trade, and Industry, Hiroshige Seko, said during a press conference on his visit to Beijing that the export controls were being very carefully explained to the companies.

The 3 materials are hydrogen fluorides that are used for cleaning semiconductors, the photoresists which are applied to the semiconductor boards, and lastly the fluorinated polyimides that were used in organic electroluminescence panels. The firms in Japan hold huge shares of the global production for every one of these items.

Some of them can be obtained from other foreign competitors but the high-purity hydrogen fluoride, for instance, was considered to be available from the Japanese companies only, and therefore the impact on the South Korean companies that were trying to develop as well as produce the high-performance semiconductors would be significant.

An executive of the SK Hynix Inc. said that if the restriction on export continued, they could not rule out the possibility of disruption being caused in the production.

On top of adjusting to their use of the items that were export-controlled, the firms of South Korea are also making effort to obtain as much of the stock as possible and for broadening their supplier base for including the non-Japanese firms.