S. Korea's Chip, Display Industries Intact from Japan's Export Curbs | Be Korea-savvy

S. Korea’s Chip, Display Industries Intact from Japan’s Export Curbs

Employees of Samsung Electronics Co. check equipment of the clean room of its semiconductor production facility. (image: Samsung Electronics)

Employees of Samsung Electronics Co. check equipment of the clean room of its semiconductor production facility. (image: Samsung Electronics)

SEOUL, Nov. 24 (Korea Bizwire)South Korea’s chip and display industries, the backbone of Asia’s No. 4 economy, have remained intact since Tokyo’s export curbs against the Asian neighbor, Seoul’s trade ministry said Sunday.

The country’s top four tech giants — Samsung Electronics Co., Samsung Display Co., SK hynix Inc. and LG Display Co. — claimed that they have suffered no significant damages in their production lines from the restrictions, according to the Ministry of Trade, Industry and Energy.

In July, Japan implemented export restrictions on key industrial materials crucial for the production of chips and displays, citing Seoul’s lax control system for strategic items that can be diverted for military use, although it provided neither clear evidence nor sufficient explanations to back up its claim.

Seoul views the measure as apparent economic retaliation against the country’s Supreme Court ruling that ordered compensation for Koreans forced into labor during Japan’s 1910-45 colonial rule of the Korean Peninsula.

Japan’s move was initially widely seen to deal a harsh blow to local industries due to South Korea’s heavy dependence on the three materials controlled by Tokyo — resist, etching gas and fluorinated polyimide.

“South Korea was able to avoid damages as it thoroughly coped with the situation,” an official from a local tech firm said.

“As far as we know, none of the country’s major firms failed to meet their production targets due to Japan’s export restrictions.”

The companies managed to overcome hurdles by diversifying their import portfolios by reaching out to European countries, and they sought to find domestic sources as well, industry watchers said.

Local companies are expected to face no significant impacts on their third and fourth-quarter performances as well, industry watchers added.

South Korea, however, is still expected to continue to face uncertainties, as Japan vowed to continue excluding the country from its list of trusted trading partners, a move that will delay shipments of goods to the Asian neighbor.

In efforts to settle the protracted dispute, South Korea announced a decision Friday to “conditionally” suspend the expiry of a military information-sharing accord with Japan.

Seoul has also decided to temporarily halt a petition process at the World Trade Organization (WTO) while negotiations with Japan continue.

South Korea decided in August to terminate the General Security of Military Information Agreement (GSOMIA) in response to Japan’s abrupt export restrictions.


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