Business

Japan delaying export of key chipmaking material beyond 90-day limit, South Korea says

Bloomberg

Japan is delaying export approval of a material vital to South Korea’s semiconductor manufacturing industry, Seoul’s trade ministry said in a statement as the bilateral trade fight shows no signs of abating.

The trade ministry issued a statement Tuesday saying Japan has not approved the export of liquid hydrogen fluoride — a highly purified chemical used to refine chips in production — to South Korea even though 90 days have passed since a Japanese exporter submitted an application to do so.

The Japanese government has not approved a single export request after the 90-day review window as it has repeatedly asked for additional documents from the exporters, the South Korean ministry said. Other materials that Japan has placed export restrictions on are being approved in a “highly restrictive manner,” it said.

Japan’s export curbs on three key materials crucial for manufacturing high-end chips and flexible display took effect July 4. Although the 90-day deadline is not stipulated in Japanese law, it’s a conventional period of time that Tokyo requires for export approvals, the ministry has said.

“Japan’s hardly predictable export controls against Korea have increased uncertainties in supply chain and so substantively affected the operations of companies,” the trade ministry’s statement says. It is “discriminatory” that Japan only approves exports of the certain materials on a case-by-case basis.

Japan has so far approved for export partial amounts of fluorinated polyimide, photoresist and hydrogen fluoride in gas form. South Korean tech giants such as Samsung Electronics Co. and SK Hynix Inc. — dependent on the materials from Japan — are looking for alternative sources, but transitioning to non-Japanese sourced materials could take several months.

Investors and market watchers are raising concerns over the escalating trade spat that could disrupt the global tech supply chain.

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