business

The high-tech materials at the heart of the Japan-S. Korea row

26 Comments
By Reporting by Makiko Yamazaki in Tokyo and Heekyong Yang in Seoul;

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"Japan produces about 90% of fluorinated polyimide and about 70% of etching gas worldwide, Japanese media have said. It produces around 90% of photoresists, according to a government report. That makes it difficult for South Korean chipmakers to find alternative sources of supply.

A source at one of South Korea's top memory chipmakers said chipmakers would have to try to build stockpiles, adding that it relies on Japan for more than 70 percent of its photoresists and etching gas."

According to well known JT "experts" , Japan is screwed because any other suppliers will jump on and readily supply the markets.. These are easily produced, therefore it will be Japan's loss.

"South Korean tech giants such as Samsung Electronics, SK Hynix and LG Display are all expected to be impacted."

Once again, not true!

Source: JT "experts".

6 ( +9 / -3 )

According to South Korean press, Masayoshi Son went to SK to meet the business community and to make some important deals with chaebols. I wonder if the timing is a coincidence...I am sure South Korean comoanies won't have real any consequences, Japan wanted only to give a signal to SK, it didn't mean to hurt its economy. People are over reacting as usual.

2 ( +4 / -2 )

companies*

2 ( +2 / -0 )

I do not know anything about the subject, but I would have thought that South Korea would now invest in producing these materials domestically, so although in the short-term it will be an effective trade weapon, in the long-term it will deprive Japanese companies of an important customer.

I don't suppose that Japan's actions have anything to do with the fact that Tarō Asō's family business is notorious for having used a slave labor during the war.

0 ( +5 / -5 )

"I do not know anything about the subject, but I would have thought that South Korea would now invest in producing these materials domestically,"

If only it was that easy!

Japanese companies also control around 75-80% of micro machines (machines that produce/go inside machinery); that will probably be the next step.

Koreans are over-stating their importance to Japan; just like many here in my beloved Britain are doing to the EU.

Japan is "la vecchia signora".

4 ( +8 / -4 )

@Hello Kitty: Korean Companies can find new suppliers, but also Japanese companies could find new customers. Anyway it's true that Western press is always more pro-SK than Japan, but it's absolutely easy to understand why. SK economy is too small to threat American or EU economy, unlike Chinese and Japanese economies. Not only that, the US needs a strong SK for their propaganda against NK and China. America is supporting also kpop spreading in the West for this reason. Nothing is random.

9 ( +9 / -0 )

In the long term, I don't believe South Korean servilism towards America will be so positive for the Korean peninsula. But for now, you can find silly articles in the SK Press like "Is Japan a bully like China"?

Dividi et impera...but SK doesn't understand.

6 ( +6 / -0 )

This morning I saw an interesting documentary on Italian public TV service about China and president Xi. It was French produced. Despite some criticism to some extent, overall it praised Chinese success. It's maybe the first time I saw such a positive view about Chinese politics on Italian television (again, It was French produced). Something in Europe is changing in the relationship towards US and China, and it's impressive like instead SK can still be so negatively biased against China and Japan, despite these Countries can offer so many opportunities to a small peninsula, compared to the US that is declining.

1 ( +1 / -0 )

Nothing like rare metals and threat of its supply for the anti-Japan crowd to jump on the "apologize and compensate for comfort women/colonialism" whine fest.

0 ( +3 / -3 )

Leaders who have to listen to their constituents are limited in power by design; they can be voted out. That’s why you see all the tough talk by leaders of many countries.

Someone like Xi hardly talks at all but can make Trump blink and concede (Huawei is a National Security Threat but now apparently not and US Chipmakers can sell to Huawei again.) Trump and US presidents have to listen to the people or corporate interests by design. Abe has to make a fuss about North Korea. Moon has to be nationalistic. Have you ever heard Xi say anything on TV? We never hear Xi speak. He just continues to push the economy.

I’m not for Xi’s draconian ways but if our leaders had a mandate of a decade, they might be able to invest more in building relations and long-term growth instead of appearing tough in these little spats. Four years is too short and Japanese prine ministers turn like a carousel.

-3 ( +1 / -4 )

@Alex80

Korean Companies can find new suppliers, but also Japanese companies could find new customers

Yes, Korean companies can find new suppliers, but Japanese companies cannot find new customers.

As the fab process become more advanced and advanced, existing players are dropping out and there are only three companies in the world investing in 7 nm or smaller fab processes; TSMC, Samsung, and SK Hynix. Japanese dropped out, Americans dropped out(AMD is fabbing its Ryzen CPUs at TSMC while Intel gave up on its own 7 nm process and is moving to Samsung), Germans dropped out, etc.

The only new player is the Chinese, but Chinese projects are on the red light due to US sanctions.

What Japan's selling to Korea is the remnant of Japan's semiconductor industry, which has gone all but moribund.

Thanks to Abe san, Japan will have nothing left soon.

-8 ( +4 / -12 )

@Samit Basu: whatever you like think...You always speak like if SK is some kind of superpower, when its economy is always gloomier, and Chinese are already taking what the Korean had taken from Japan. Probably, the future isn't Japanese, sure, but not even Korean. Sorry for crashing your delusion. It's Chinese.

6 ( +8 / -2 )

@quercetum: your comment is REALLY interesting.

3 ( +5 / -2 )

And, in other news, South Korean youth unemployment rate is around 25%...

1 ( +4 / -3 )

@Alex80

whatever you like think..

It's not whatever I like, it is what it is.

Japan itself has no use for the said materials, because Japan stopped at 15 nm(Toshiba NAND) as the most advanced process due to financial troubles and was left in the dust. Only Koreans and Taiwanese are going 7 nm and below and has cash resources to do so as this is a money fight.

In other word, Japan just cut out 2 out of 3 customers in the world who could possible use the said materials, so they are doomed.

-6 ( +4 / -10 )

@Samit Basu: yeah, only Korea (and Taiwan) has the know how to use that stuff, sure, okay.

Mark my words: this fact won't have ANY consequences. Not for South Korea, not for Japan.

1 ( +6 / -5 )

Alex80, the same thing that happen to Italian auto industry, will happen to japan.

All of the big Italian Automobile player are now German own, so don't talk to much about this kind of subject.

-5 ( +0 / -5 )

Since the semiconductor market is shrinking this year, I am wondering what other semiconductor giants in Japan, US, and Taiwan think about this. If I'm in that position, I would definitely take advantage of this situation.

0 ( +0 / -0 )

Japan and s.korea both are developed countries. Around the globe every country knows the power of both of this countries.so both of them should work together .Both of them should deal with their resources to improve the nations .

-2 ( +1 / -3 )

@The_True: Sorry, but what you said about Italian carmakers isn't true, I don't know which is your source. Plus, I don't know how Italian and German car industries are relevant to the discussion, and why I can't express my opinion about the content of this article.

1 ( +2 / -1 )

Hate all wars including emotional conflicts between Japan and Korea!

Peace to you all!

0 ( +1 / -1 )

Jack TaranceJuly 7  05:36 pm JST

Japan and s.korea both are developed countries. Around the globe every country knows the power of both of this countries.so both of them should work together 

South Korea's population is under half that of Japan's, and (therefore) South Korea's economy is two thirds the size of Japan's. They are not equal at all, and Japan is not obligated to assume that position for the sake of goodwill. Apologies if you weren't implying that, but that's the way it came across.

I do agree they should work together on sociological level, but as far as industry is concened, so long as South Korea is towing the anti-Japan line they should be treated the same as China.

2 ( +2 / -0 )

I think that there is a misunderstanding about the abolition of the trade preferential treatment to South Korea this time by the Japanese government.

The Japanese government said that due to security issues, it would abolish export incentives for high-tech materials in the same way as other countries.

But South Korea says that this is caused by the problem of forced labor during World War II.

First of all, this discrepancy is strange.

The Japanese government is concerned that South Korea is smuggling high-tech materials to North Korea.

The South Korean government should insist that it does not smuggling high-tech materials to North Korea, and I think that Japan will abolish the cancellation of preferential treatment.

1 ( +1 / -0 )

When any personal issue become a public issue and then a government issue, it often loses "perspective" and may "ignore" reality and presence (pragmatic practicality) of the "now" situation, circumstances, condidion and environment. When that particular issue becomes the "focal" point of any relationship, and if based upon so called "moral, ethical" values particular to that group / public, that alone loses proper focus (becomes single minded or with tunnel vision) and obstructs flexibility in addressing that issue. If taken at a national level, it becomes a major problem often affecting the entire country. Such is the situation now.

The abductee issue for Japan has been a different but similar problem in relation with N Korea. It has become an international issue when Abe and Trump got involved. Now Abe and Japoan is "forced" to bring up that issue which may actually hamper a much more softer start in negotiations.

This case with S Korea is entirely different since it is a direct accusation and verdict affecting business relatinships as well as government relationships. It even appears that S Korea has taken advantage of the abductee issue from many years ago by Japan to force Japan to consider their claims as being legitimate.

While S Korea has for whatever reason extremely idealistically nationalistic (from individual to government and courtts), ignoring current reality and refusing to change, taking advantage of "legality" and world politics rather than rationalism and human relationships, has created worldwide unrest, adding to the already "volatile" religious, poltical and economic conditions.

But again they may be taking advantage of the "volatile" condition to force the issue and get sympathy and world consensus in their favor when the entire world is currently more "emotional" than "rational" due to the extreme "stress" created by economic conditions and mass migrations. It is apparent that under "stress" more are likely to be idealistic and wishful and hopeful often acting irrationally.

Hopefully it does not explode as in Hong Kong into physical confrointations.

0 ( +0 / -0 )

The South Korean government should insist that it does not smuggling high-tech materials to North Korea

Postscript: On the 8th, according to Seoul affairs, the South Korean government claims that it has faithfully implemented the UN Security Council's resolution on sanctions against North Korea.

I think it is a good response.

The Japanese government will require referrals and inspections, but the Korean government should not refuse.

Because the next problem is the response to Japanese public comment, it is necessary for the Korean government to support Japanese public opinion.

The Japanese government can not but cancel the preferential policy again if the public comment gives a negative opinion from the Japanese people.

That would be the shortest way to solve problems.

0 ( +0 / -0 )

Why are there people here who thinks SK is a superpower? HAHA. Please do take note that the SMALL countermeasure made by Japan hit SK tech industry right in the face. Look at SK now whining like an ungrateful brat. Because of Japan, SK prospered and reached its full potential. If this dispute continues, we all know who's gonna be sorry, SK. Pretty obvious.

I agree that Japan only sent a warning, this countermeasure is only a warning to SK since they continue to play this victim type of crap. Ungrateful, heedless people. What a shame.

1 ( +1 / -0 )

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