Nikkei: "Export Restrictions Backfire on Japanese Companies... Korea Achieves Localization of Semiconductor Materials"

[Image source=Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] The Nikkei newspaper reported on the 7th that Japanese companies have actually suffered significant damage due to Japan's export restrictions imposed as retaliatory measures against compensation rulings for forced labor victims. This is because localization of semiconductor materials has progressed in Korea since the implementation of the retaliatory measures.

Previously, in July 2019, the Japanese government imposed export restrictions on three semiconductor and display material items?hydrofluoric acid, photoresist, and polyimide?to Korea.

Nikkei cited data from the Korea International Trade Association, reporting that Japan's hydrofluoric acid exports to Korea last year decreased by 75% compared to the previous year. Compared to before the Japanese government's export restrictions were strengthened, the reduction is about 90%.

This is because Korean material companies began producing high-purity hydrofluoric acid, a semiconductor material that had depended on Japanese companies, and started supplying it to Samsung Electronics and others.

Within Samsung Electronics, which introduced some domestic products into its production process at the request of the Korean government, voices such as "We want to continue using the high-performance Japanese manufacturing equipment and materials we are accustomed to" (Samsung Electronics executive) have emerged, but Nikkei reported that the company's intentions cannot ignore the government's stance.

As a result, Japanese companies producing hydrofluoric acid, such as Stella Chemifa and Morita Chemical Industries, suffered significant damage. Statistically, the decrease in sales to Korea amounts to about 6 billion yen (approximately 64 billion won) annually.

Stella Chemifa's shipments of hydrofluoric acid for semiconductor and display use in the 2019 fiscal year (April 2019 to March 2020) decreased by 26% compared to the previous year, and shipments from April to September last year remained at a similar level to the previous year.

Photoresist and polyimide, which were also subject to export restrictions along with hydrofluoric acid, did not see a decrease in shipments because the Japanese government quickly granted export permits.

Nikkei stated, "The Korean government is promoting localization of materials and manufacturing equipment to break away from dependence on Japan in the supply chain," and introduced policy efforts such as corporate research and development subsidies and tax benefits.

Nikkei evaluated, "In Japan, four months have passed since the formation of a new cabinet, and within the government, issues related to export control to Korea have become a thing of the past due to responses to COVID-19, but in Korea, the export control measures by the Japanese government have steadily advanced the localization movement of advanced materials and equipment."

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