Taiwan chipmakers set to benefit from Japanese export ban targeting South Korea

Japan has moved to slap restrictions on export of three materials vital to South Korea’s semiconductor sector

Samsung photo

Samsung photo

TAIPEI (Taiwan News) – Taiwan’s semiconductor manufacturers are poised to benefit from the ban imposed by Japan on exports to South Korea that target chip companies.

On Monday (July 1), the Shinzo Abe administration announced measures to restrict the export of three key electronic components to South Korea. It also suggested there was a possibility the country was removed from its list of trusted buyers, reported Bloomberg.

South Korea has protested the move, calling it retaliation for court rulings in June demanding that Japan provide compensation to South Koreans who were forced to work for Japanese companies during World War II, reported TechCrunch. The materials to be prohibited include polyimides, which tech companies like Samsung use to make flexible displays.

Photoresist and etching gas, in addition, also serve as indispensable materials for the semiconductor industry, said Central News Agency. South Korean chipmakers and OLED display manufacturers may not feel the pinch for now as stocks should not run out for another two or three months, but in the long term they are bound to be affected.

Japan is a major supplier of the three key electronic components, taking up a market share of 70 to 90 percent. Taiwan’s semiconductor businesses will become a major beneficiary if friction deepens between the two Northeast Asian countries, CNA said, citing local manufacturers.

According to market intelligence company Trendforce, Samsung and SK Hynix of South Korea accounted, respectively, for over 70 percent and 40 percent of the global markets of DRAM and NAND Flash memory in the first quarter, reported CNA.