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Home > News > Business > Japan and South Korea begin to strengthen global supply chain cooperation


Japan and South Korea begin to strengthen global supply chain cooperation

Sunday,May 14,2023

 On the afternoon of May 7th, Fumio Kishi of Japan arrived in Seoul, South Korea, and started a two-day working visit. This visit to Korea is a return visit to Yin Xiyue's visit to Japan in March.

During the talks, the leaders of the two countries discussed issues such as security, high-tech industries, youth and cultural cooperation. Kishida's speech showed that both sides agreed to expand bilateral economic cooperation at the private level. According to Korean media reports, the two sides also discussed the need for the two countries to jointly respond to the recent adjustment of the global supply chain led by the United States.
South Korean President Yoon Suk-yue and Japan's Fumio Kishi agreed on Sunday to work together to build a solid semiconductor supply chain between South Korean chipmakers and Japanese materials, parts and equipment companies. They believe that the combination of South Korea's chip manufacturing capabilities and Japan's technological advantages in materials, components and equipment can create synergies.
The South Korean government and companies have begun to develop their own capacity to produce chip materials, parts and equipment after being hit hard by Japan's export controls on core chip materials in 2019. In the last four years since then, South Korea has managed to produce some chip materials and parts, but the technology gap and dependence on Japan remain. Some core materials and parts cannot be sourced from outside Japan.
According to the Korea International Trade Association, 90 percent of wafer coating materials and 79 percent of photoresists are still imported from Japan. As much as 94 percent of extreme ultraviolet (EUV) photoresist, a key material in semiconductor processing, is produced in Japan.
In July 2019, Japan restricted the export of three key semiconductor materials, high-purity hydrogen fluoride, fluorine-containing polyimide, and photoresist, to South Korea, and removed South Korea from the "white list" of simplified trade procedures in August of the same year. In September of the same year, South Korea filed a complaint with the WTO and removed Japan from the trade "white list".
Yoon Suk-yue had said in early March that South Korea "can attract a large number of competitive chip material, component and equipment manufacturers from Japan."
On March 23 this year, the Japanese government announced that the strengthening measures to control the export of three semiconductor-related raw materials to South Korea implemented in 2019 have been lifted. The South Korean side stated that it had withdrawn its previous complaint to the WTO on this matter and was proceeding to put Japan back on the "white list".
Economic exchanges between Japan and South Korea are expected to gain momentum following the normalization of bilateral trade relations.