From Japan to the World... Core Items of Materials, Parts, and Equipment '100 → 338'

Ministry of Industry: "Expanding Achievements in Material, Component, and Equipment Self-Reliance and Responding to GVC Restructuring"
Industry Minister: "Achieved Substantial Supply Stabilization of Three Key Export-Regulated Items from Japan"

Sung Yun-mo, Minister of Trade, Industry and Energy./Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Moon Chaeseok] The government plans to expand the number of core materials, parts, and equipment items from 100 to 338 to manage supply chain risks. This policy expansion aims to respond to the world's "New Normal" beyond Japan's export restrictions and transform Korea into the "world factory of advanced industries."

The Ministry of Trade, Industry and Energy will hold the "2nd Post-COVID Industrial Strategy Dialogue" at 2:30 p.m. on the 11th at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul, chaired by Minister Sung Yun-mo. The dialogue will be attended by Minister Sung, Jung Yang-ho, President of the Korea Institute for Advancement of Technology, Seok Young-cheol, President of the Korea Institute for Industrial Technology Promotion, Heo Jae-myung, CEO of Iljin Materials, and other company CEOs.

The second dialogue was organized to review the supply stabilization achievements of the 100 core items established in the August last year’s measures to strengthen the competitiveness of materials, parts, and equipment, and to hear companies’ future strategies in the post-COVID-19 era. It also aims to discuss a joint public-private response plan for the reorganization of the global value chain (GVC).

The Ministry explained that it overcame the three major Japanese export-restricted items?hydrofluoric acid, EUV resist, and fluorinated polyimide?by substituting products from the U.S., China, and Europe, attracting investment from DuPont (U.S.), and expanding production at Soulbrain, achieving practical supply stabilization. For the 100 core items, amid supply uncertainties, the supply chain was stabilized by expanding average inventory holdings by 2 to 3 times, securing alternative import sources for 76 items, and strengthening domestic production capacity for 48 items (with an investment of 734 billion KRW).

After COVID-19, it was judged necessary to pay attention not only to Japan but also to the strengthening of global protectionism. Minister Sung diagnosed, "Due to the severe threats to the global supply chain, the period before COVID-19 (BC) and after COVID-19 (AC) will be distinctly different for our companies."

Minister Sung urged companies to identify risks of second- and third-tier suppliers and share supply and production plans (S&OP) with suppliers in the short term (six months) to respond to the New Normal. In the mid to long term, he requested the prompt establishment of a digital supply chain management system to enable real-time value chain management, securing multiple and alternative suppliers, and dispersing supply chains by economic zones.

The Ministry plans to promote the "3 Major Policy Directions for Materials, Parts, and Equipment GVC Reorganization." First, it will expand the 100 core items for Japan to 338 items globally to thoroughly manage supply chain risks. This is to leverage the experience of minimizing production disruptions despite Japan’s export restrictions and the spread of COVID-19.

At the national level, a resilient supply system for materials, parts, and equipment will be established. Focusing on core items, the government will actively support companies in expanding inventory, securing proprietary technologies, and diversifying import sources to secure practical supply stability early. In case of supply chain disruption, early operation of local factories and strengthening bilateral cooperation channels for business trips will be ensured. To secure core technologies, technological cooperation with leading countries in materials, parts, and equipment will also be activated.

Minister Sung emphasized, "In the process of GVC reorganization, Korea will be transformed into a transparent and safe world factory of advanced industries," adding, "The world has begun to prefer innovation capabilities and safe investment destinations over cheap labor costs, which is a golden opportunity for us."

He continued, "Leveraging the advantages of an effective quarantine system and robust industrial ecosystems such as semiconductors, displays, and automobiles, we will nurture core companies in the materials, parts, and equipment value chain," and added, "We will actively promote attracting investments from global materials, parts, and equipment companies and reshoring of our companies."

Meanwhile, the Ministry of Trade, Industry and Energy announced that it will continue to promote industrial strategy dialogues by industry and theme to overcome the COVID-19 crisis and prepare for the post-COVID-19 era. Policies will be prepared for ▲ GVC reorganization ▲ fostering non-face-to-face industries ▲ global advancement of K-quarantine and K-bio ▲ and post-COVID global cooperation leadership.

This content was produced with the assistance of AI translation services.