Japan’s Ministry Approves Shipments of Industrial Chemicals to South Koreaby Anton Shilov on August 9, 2019 12:00 PM EST
Amidst the ongoing trade conflict between Japan and South Korea, there is some good news to close the week out. The Japanese Ministry of Economy, Trade and Industry has approved a new shipment of industrial chemicals to South Korea, which the latter country's high-tech manufacturers rely on for the ongoing production of processors and other components. This is the first of shipment to be approved since early July, when a diplomatic conflict between the two countries broke out. If South Korean manufacturers get the materials on time, it will help to avoid a painful disruption in the manufacturing and shipping of various tech components, including DRAM, NAND flash, LSI chips, and display panels.
Starting as of early July, Japanese producers must now get approval for individual exports to South Korea of polyimides (used both for LCDs and OLEDs), photoresists, and high-purity hydrogen fluoride (used to make chips, such as LSI, DRAM and NAND devices). The major Japanese manufacturers — JSR, Showa Denko (SDK), and Shin-Etsu Chemical — not only control the lion’s share of the global supply for these chemicals, but they also are among the only suppliers that can meet the quality needs that companies like LG, Samsung, and SK Hynix have built their manufacturing lines around.
Export reviews in Japan may take up to three months, whereas South Korean makers typically only keep one to two months' worth of materials in stock because they are highly toxic and uneasy to store. Luckily, the first individual exports was approved by the ministry in about four weeks. The review by the officials concluded that the shipments will not be used for military purposes. However, the ministry did not disclose what specific chemicals are set to ship. Presumably, the South Korean giants will get their needed materials shortly.
Here is what trade minister Hiroshige Seko told local journalists.
“Usually we do not make an announcement when any single export is approved. But in extraordinary circumstances, in which the South Korean government unjustly called our measures an export ban, we decided to make an announcement.”
One thing to keep in mind is the starting from July all individual exports from Japan to South Korea will have to be approved separately, which means these shipments will have to pass export review procedures every few weeks.
- LG Display & SK Hynix Looking to Diversify Industrial Suppliers as Row with Japan Intensifies
- Supply of DRAM, NAND & Displays Could Be Disrupted by Japan & South Korea Dispute
Source: The Japan Times
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imaheadcase - Friday, August 9, 2019 - linkSomething seems fishy about this whole thing. Why is Japan the only places making these chemicals? Why is being highly toxic and hard to store a reason to keep limited supply..its prob more of limited storaged to charge more for it like lots of big players keep limited stock to jack prices up.
Its not like making chips is a niche market anymore. China has its own production facilities now that prob also need these chemicals.
eastcoast_pete - Friday, August 9, 2019 - linkSome of these chemicals are indeed difficult to produce in sufficient quantity, especially at the very high (consistent) purity required for semiconductor fabrication. Let's recall that just this year TSMC lost several weeks of production due to a contamination of one of the chemicals they use.
Tams80 - Saturday, August 10, 2019 - linkIt's a bit like China and their metallurgy problem. They can't (or at least couldn't; maybe they've made progress) make metals that can withstand the very high temperatures caused when can engine is powering a plane at several times the speed of sound. They can turn out over metals just fine, but the very high-quality stuff, they struggle with.
UltraWide - Sunday, August 11, 2019 - linkYes, this is very accurate. The purity is the issue, not so much the quantity.
eastcoast_pete - Friday, August 9, 2019 - link@Anton: I believe what's missing from this notice is that the first export licenses granted were and are for vital chemicals for Samsung's new EUV fab. Preventing that fab from operating would have had major consequences for several key players, including some from Japan, Inc.
Tams80 - Saturday, August 10, 2019 - linkIt looks like the Japanese authorities are starting to sweat a bit (and not because of this dreadful summer).
I reckon it's finally hit them that the South Korean companies will do almost anything to secure a supply of the chemicals. So there's the threat that the demand eventually moves away from Japan in the long term and potentially more concerning to them; set up their own production.
In the short term, they also probably have Japanese companies telling them that they have products that they need to move as soon as possible or they will be lost,
Of course, they won't admit to any of that. No government would, but especially a Japanese one.