Chip production among affected industries
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SEOUL • A week-long strike by truck drivers in South Korea has disrupted shipments to China of a key cleaning agent used by makers of semiconductor chips, the Korean International Trade Association (Kita) said yesterday.
It was the first sign that the strike had affected the global supply chain of chip production, having already cost South Korean industry more than US$1.2 billion (S$1.7 billion) in lost output and unfilled deliveries.
Kita said a Korean company that produces isopropyl alcohol (IPA), a chemical used in the cleaning of chip wafers, faces difficulties in shipping to a Chinese company, which in turn supplies wafers to chipmakers.
About 90 tonnes of the material, or a week's worth of shipments, had been delayed, the trade body said in a statement.
It corrected an earlier statement saying that production had been disrupted, and clarified that the Chinese company does not supply wafers to Samsung Electronics' chip production operations in China.
Also facing problems because of the strike were IPA shipments by a major South Korean petrochemical company from its plant in the port city of Yeosu.
Only an "essential amount" had been let through, said a person familiar with the matter, who sought anonymity and declined to identify the company because of the sensitivity of the matter.
The company's IPA output is used as an industrial cleaning agent in semiconductors and liquid crystal displays or LCDs, among other applications, it said on its website.
The truckers' union was protesting against soaring fuel prices and demanding guarantees of minimum pay.
Last night, the union announced that it had reached an agreement with the Transport Ministry to end the eight-day strike.
Analysts had expected the strike's impact on domestic chipmakers to be limited, saying that both Samsung and the world's second-largest memory-chip maker SK Hynix usually keep on hand three months or more of inventory for materials.
"Both drastically increased inventory since Japan's export curbs on chip material in 2019 highlighted the issue," said Mr Ahn Ki-hyun, senior executive director of the Korea Semiconductor Industry Association.
REUTERS