CEO Morning Brief

Japan to Lift Restrictions on Chip Material Exports to South Korea

Publish date: Fri, 17 Mar 2023, 09:08 AM
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TheEdge CEO Morning Brief

(March 16): Japan will lift export curbs of key semiconductor materials to South Korea, signalling an end of a bitter feud between the two Asian tech powerhouses that had the potential to threaten global supply chains.

Japan will scrap restrictions on fluorinated polyimide, hydrogen fluoride and photoresist, and South Korea will drop its complaint to the World Trade Organization, the countries said in separate statements as leaders from the two nations began a rare summit on Thursday. The materials are essential ingredients for the manufacture of the displays and semiconductors that go into gadgets including Apple Inc and Samsung Electronics Co phones.

The export controls had roiled South Korea’s biggest companies, and had driven a wedge between the two US allies, disrupting ties ranging from security to trade. A breakthrough in the bickering came last week after South Korean President Yoon Suk Yeol said companies from his country, rather than Japanese ones, would finance a foundation to pay Koreans forced to work at Japanese mines and factories during its 1910-1945 colonial rule over the peninsula. Yoon is in Tokyo in a first formal summit since 2011 between the neighbours held on Japanese soil.

Japan began requiring licences to export the three compounds to South Korean firms in 2019, amid the dispute over compensation for the colonial-era workers.

It’s yet to be decided when the export restrictions will be lifted, an official at Japan’s Ministry of Economy, Trade and Industry told reporters.

The three materials are controlled almost wholly by Japanese companies such as JSR Corp, Shin-Etsu Chemical Co and Tokyo Ohka Kogyo Co — a left-over legacy from when Japan led the world in semiconductor technology in the 1980s.

Source: TheEdge - 17 Mar 2023

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