Supply-Chain Pain: South Korea Chipmakers And Their Suppliers Seek To Bypass Tokyo Curbs | 6/1/2019 | Staff
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SEOUL/TOKYO (Reuters) – South Korean chipmakers and Japanese chemical suppliers caught in the midst of a sudden escalation of a bilateral diplomatic dispute are scrambling to circumvent tightened export controls imposed by Tokyo, industry executives said.

Japan said last week it would stop preferential treatment for shipments of the three materials to South Korea, requiring exporters to gain permission each time they want to ship, which takes around 90 days.

Curbs - Apply - Materials - Japan - Photoresists

The curbs apply to three materials where Japan is dominant: photoresists, used to transfer circuit patterns onto semiconductor wafers; hydrogen fluoride, used as an etching gas in the chipmaking process and fluorinated polyimides, used in smartphone displays.

Samsung Electronics Co Ltd and SK Hynix are seeking to buy more of the materials from countries like Taiwan or China, said Park Jea-gun, head of the Korean Society of Semiconductor & Display Technology.

Companies - Countries - Japan - Stock - Materials

That includes sounding out companies in countries other than Japan which may have surplus stock of the materials, he added.

Kim Young-woo, an analyst at SK Securities, said the chipmakers have already dispatched sales teams to factories or joint ventures operated by the suppliers outside of Japan to secure stock.

Samsung - Number - Measures - Impact - Curbs

Samsung has said it is reviewing a number of measures to minimize an impact from the curbs. Its vice chairman Jay Y. Lee, heir to the parent conglomerate, traveled to Tokyo on Sunday, according to a Samsung official, who declined to provide further details on what measures the tech giant was taking.

SK Hynix declined comment.

Tokyo - Export - Approval - Process - Towards

Though it remains unclear exactly how far Tokyo could slow the export approval process or if it will shift towards a ban, South Korean chipmakers are worried the situation could develop into a full-blown crisis.

“These materials, they are not something that we can find at another store and buy quickly,” said a source at one South Korean chipmaker, declining to be...
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