Chipmaker material suppliers in Korea have been earning more from domestic semiconductor companies who have been looking for local suppliers.
Since export restrictions were put in place by their neighbours, Korean chipmakers like Samsung Electronics have been using local suppliers. This has led to suppliers in Korea more than doubling their earnings in the last four years.
Japan’s restrictions affected areas including photoresist chemicals and hydrogen fluoride used in chip manufacture. Fluorinated polyamide for organic light-emitting displays was also affected.
The restrictions were first changed back in mid-2019, and since then 16 Korean materials companies saw combined sales grow by approximately $15 billion between 2018 and 2022.
Korea Semiconductor Industry Association VP and COO, Ahn Ki-hyun, said Korean companies weren’t damaged by the restrictions. He said, however, the restrictions may have impacted Japanese companies attempting to export to South Korea.
One of the toughest materials to re-source was hydrogen fluoride gas, used for etching in display production. Much of this has been replaced since 2018 to lower-purity gas produced in Korea.
Despite some of the restrictions now being lifted, the domestic suppliers that have been adopted may stay for good.
Just last month the two countries came together and agreed to lift many of the restrictions. Korea has continued to promote using domestic suppliers even if restrictions are eased.
In general the chip industry has not changed much, other supplies and exports between the countries have stayed the same. In light of the changes it will be interesting to see how the Asian chip market now develops.
The US Chips Act will also affect these new business relationships. Market shares might change, and only time will tell how the industry will shift as a whole.
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