Hwang Soon-min and Choi Mira
South Korea’s chip and display makers are doubling down efforts to find substitutes for the three chemicals Japan has been cutting off to Korea to complete their fab tests by next month as not to disrupt global supplies.
According to industry sources on Tuesday, Samsung Electronics Co. and SK Hynix Inc. responsible for more than 60 percent of global memory supplies and dominant OLED maker LG Display Co. are on an aggressive hunt for substitutes to Japanese origins of fluorinated polyimides, photoresists and hydrogen fluoride ? three chemicals Tokyo have been restricting from last month on unspecified “security” reasons.
Since July 4, Japanese exporters of the three items must seek government approval for every shipment to Korea. No shipments have been approved since then.
Testing of new materials would require up to six months, but Korean makers are reportedly working on to complete first round of tests of non-Japanese sources by the end of September.
Market research company DRAM eXchange estimated Samsung Electronics and SK Hynix have Japanese hydrogen fluoride, or etching gas essential for chip cleaning, to last 2.5 months at best.
They reportedly have secured substitute materials from Korea, Russia and China but when they can confidently employ on the fab lines remains uncertain.
According to the Korea International Trade Association, Korean manufacturers sourced 94 percent of fluorinated polyamides, 92 percent of photoresists and 44 percent of hydrogen fluoride from Japan from January to May this year. China took up the largest share in supply for hydrogen fluoride as Korean firms sourced 46.3 percent of the material from Chinese firms during the period.
Japan has tightened its shipments of the three materials to Korea since July 4, suspecting some of them could have ended up in North Korea in breach of the United Nations’ sanctions. South Korea immediately rebutted that the claims are groundless allegations.
Tokyo on Friday officially removed Korea from its list of trade allies called ‘whitelist’ nations that enjoy fast-track shipment procedures, a measure that will require more complicate clearance procedures for more than 1,100 items falling under strategic and sensitive category when shipped out to Korea.
Seoul believes a series of actions recently taken by Tokyo are punitive actions against Korean court’s rulings last year ordering that Japanese firms must compensate Korean workers for forced labor before and during World War II.