How Japan's trade row with South Korea could hit tech supplies

[nitpicker]

https://www.bbc.com/news/business-49041285

How Japan's trade row with South Korea could hit tech supplies

By Virginia Harrison
BBC News

8 hours ago

A trade spat between Japan and South Korea threatens to spill beyond their borders, posing potential risks to consumer electronics supplies around the world. The row stems from export restrictions Tokyo imposed on certain industrial materials that Seoul needs to make semiconductors and display screens. Japan has also warned tougher trade curbs could be on the way.

The moves have drawn anger from South Korea, and earlier this month President Moon Jae-in described the situation as an "unprecedented emergency" for his country's economy.
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The export curbs apply to three high-tech materials: fluorinated polyimide, photoresists and hydrogen fluoride. Japan is the dominant producer of those materials which are vital to make memory chips and display screens. These are key industries for South Korea.

The country's tech giants Samsung Electronics and SK Hynix exported around 60% of global memory components last year, according to IHS Markit. A spokesperson for Samsung said the company was "assessing the current situation" and "reviewing a number of measures to minimise impact on our production". SK Hynix declined to comment.

The restrictions don't block the sale of the materials, but require Japanese exporters to acquire licences to sell the products to South Korea, potentially causing delays and choking supplies.
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What does the row mean for electronics supplies?

Many analysts have joined South Korea in raising the alarm over the risk the trade spat presents to the global technology supplies.

"The ripple effects on the regional electronics supply chains cannot be underestimated," says DBS economist Ma Tieying. She says supply disruptions could hit Apple, Huawei and Sony among others in the production of smartphones, computers and televisions.
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Rajiv Biswas, Asia-Pacific chief economist at IHS Markit, says if Japan's export controls remain in place for a prolonged period it "could disrupt the global electronics supply chain" given South Korea's dominance in the memory chip market. He says the price of memory components "could significantly increase due to the inability of the other memory suppliers to meet global demand".
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