Tokyo’s curbs on high-tech materials exports to South Korea could backfire

Chipmakers such as SK Hynix have relied on Japanese materials. (Reuters)
Updated 30 August 2019

Tokyo’s curbs on high-tech materials exports to South Korea could backfire

  • Japan tightened restrictions last month on exports of three chipmaking materials to South Korea

TOKYO: Japan’s curbs on exports of high-tech materials to South Korea could backfire in the long run, eroding its dominance over a key link in the global chip supply chain, suppliers and experts say.

Japan tightened restrictions last month on exports of three chipmaking materials to South Korea, home to memory chip titans Samsung and SK Hynix, threatening to disrupt the global tech supply chain as it provides about 70 percent or more of the restricted products to the world.

While the move highlights Japan Inc’s firm place in the industry even after its once mighty giants such as Sony lost out to nimble Chinese and Korean rivals, it has fueled concerns that its grip on the niche market for fluorinated polyimides, photoresists and hydrogen fluoride could loosen.

“South Korean companies cite quality and stable supply as reasons for choosing Japanese materials. But this has made them aware of the need for change and they are already taking action,” a source at a Japanese materials supplier said. “This will hit us like a body blow.”

Samsung, for instance, has stepped up testing of non-Japanese photoresists and hydrogen fluoride, informed sources said.

Soulbrain, a supplier of hydrogen fluoride to the Samsung and Hynix — the world’s No.1 and No.3 chip vendor — is aiming to match the purity of Japanese hydrogen fluoride at a plant that is still under construction.

Industry experts, however, note it would take time for South Korean firms to move up the value chain as the three high-tech materials are not easy to replicate.

Japanese suppliers “have built up their capabilities through decades-long experience of developing products,” Atsushi Ikeda, Citigroup analyst, said.

Top photoresist supplier Tokyo Ohka Kogyo says it takes up to two years to develop new resists.

From South Korea, the curbs are likely to elicit a response similar to Japan’s during the “rare earth shock” nearly a decade ago, when China’s restriction on exports of rare-earth minerals used in electronic devices forced Japan Inc. to find alternate supplies, industry participants said.

“Under the circumstances, anyone would do that,” said the source at the Japanese supplier that has been hit by the curbs.

Seoul has pledged to subsidise the domestic chip supply chain to accelerate the buildup of knowledge needed for firms to catch up in more advanced fields.

The curbs were prompted by an old row over compensation for forced South Korean laborers at Japanese firms during World War Two.

Japanese suppliers have so far refrained from directly commenting on how the curb will affect their business, claiming they had no inkling of the government’s decisions beforehand.

“We have very good relations with our Korean clients,” said Hideo Ohhashi, a spokesman for Tokyo Ohka. “But this is up to politics.”


Japan’s Uniqlo pulls ad after South Korean fury

Updated 21 October 2019

Japan’s Uniqlo pulls ad after South Korean fury

  • South Korean and Japanese relationship is deeply strained by the legacy of Tokyo’s 20th-century expansionism
  • Seoul and Tokyo are currently locked in a bitter trade and diplomatic row stemming from historical disputes
SEOUL: Japanese retail giant Uniqlo has pulled a commercial featuring a 98-year-old US fashion figure from South Korean screens, it said Monday after it was accused of whitewashing colonial history.
South Korea and Japan are both US allies, democracies and market economies faced with an overbearing China and nuclear-armed North Korea, but their relationship is deeply strained by the legacy of Tokyo’s 20th-century expansionism.
The latest example is an advert for Uniqlo fleeces showing elderly fashion celebrity Iris Apfel chatting with designer Kheris Rogers, 85 years her junior.
The last line has the white-haired Apfel, asked how she used to dress as a teenager, innocuously responding: “Oh my God. I can’t remember that far back.”
But Uniqlo’s Korean arm subtitled its version of the ad slightly differently, reading: “I can’t remember things that happened more than 80 years ago.”
That would put the moment as 1939, toward the end of Japan’s brutal colonial rule over the Korean peninsula, where the period is still bitterly resented, and some South Koreans reacted furiously.
“A nation that forgets history has no future. We can’t forget what happened 80 years ago that Uniqlo made fun of,” commented one Internet user on Naver, the country’s largest portal.
The phrase “Uniqlo, comfort women,” in reference to women forced to become sex slaves to Japanese troops during the Second World War, was among the most searched terms on Naver at the weekend, and demonstrators protested outside Uniqlo shops on Monday.
Seoul and Tokyo are currently locked in a bitter trade and diplomatic row stemming from historical disputes, and South Korean consumers have mounted boycotts of Japanese products.
Uniqlo — which has 186 stores in South Korea — has itself been one of the highest-profile targets, while Japanese carmakers’ sales dropped nearly 60 percent year-on-year in September.
The company denied the allegations in a statement, saying the text was altered to highlight the age gap between the individuals and show that its fleeces were for people “across generations.”
“The ad had no intention whatsoever to imply anything” about colonial rule, a Uniqlo representative said on Monday, adding the firm had withdrawn the ad in an effort at damage control.
Analysts said the controversy demonstrated the politicization of the neighbors’ complex history.
The reaction was excessive, said Kim Sung-han, a former foreign affairs vice minister who teaches at Korea University, involving a “jump in logic” that “assumes everything Uniqlo does is political as a Japanese company.”
“I don’t see how her remark could be linked to the comfort women issue,” he added. “This is overly sensitive.”