Samsung seeks alternatives to Japan suppliers amid trade row

Visitors in a Samsung Electronics showroom in Seoul. A Samsung spokesman said the firm was "seeking ways to diversify" supplies of materials and components where it relied heavily on Japanese imports.
Visitors in a Samsung Electronics showroom in Seoul. A Samsung spokesman said the firm was "seeking ways to diversify" supplies of materials and components where it relied heavily on Japanese imports.PHOTO: AGENCE FRANCE-PRESSE

This comes after Tokyo imposed curbs on exports of chemicals vital for chipmaking in S. Korea

SEOUL • South Korean tech giant Samsung Electronics, the world's biggest smartphone and memory chipmaker, is seeking alternatives to Japanese suppliers for some key materials, it said yesterday, with Seoul and Tokyo embroiled in a bitter trade dispute.

The row has seen the Japanese government impose restrictions on chemical exports crucial to chipmaking and last week, Seoul and Tokyo removed each other from their "white lists" of trusted trading partners.

Two of the Japanese chemicals targeted, hydrogen fluoride and photoresists, are essential to making memory chips.

The third chemical, fluorinated polyimide, is used for high-spec TV screens and smartphone displays, including hotly-anticipated folding models from Samsung.

Tokyo's move has also raised international concern about the effect on global supply chains and possible price hikes for consumers.

A Samsung spokesman told AFP the firm was "seeking ways to diversify" supplies of materials and components where it relied heavily on Japanese imports.

Analysts have warned the restrictions - and reduction in the availability of the materials - would "significantly impede" chip producers.

Japan holds a 60 per cent to 70 per cent share of the global hydrogen fluoride market, according to Taipei-based market intelligence firm TrendForce, which could make it difficult for Korean companies to find alternatives elsewhere.

But the Samsung spokesman denied a South Korean media report that the firm had decided to replace all the approximately 220 Japanese chemicals and materials it uses for chip production with Korean or overseas products.

Samsung is by far the biggest of the family-controlled conglomerates that dominate business in the world's 11th-largest economy, and it is crucial to South Korea's economic health.

The country's exports have fallen for the eighth consecutive month through July. Production in all industries slipped 1.1 per cent in June from a year earlier, after growing 1.2 per cent in the previous month.

Retail sales, which reflect private consumption, rose 1.2 per cent in June from a year ago, thanks to the government's efforts to raise household income, but it slowed down from a growth of 3.4 per cent in May.

REUTERS, XINHUA

A version of this article appeared in the print edition of The Straits Times on August 08, 2019, with the headline 'Samsung seeks alternatives to Japan suppliers amid trade row'. Print Edition | Subscribe