One year since Japan’s trade curbs on S. Korea, firms using local substitutes

日 수출규제 1년... 韓 소부장 산업 깨워Today, July 1st, marks 1 year since Japan imposed restrictions on its exports to South Korea... of three key materials used to make computer chips and displays.That triggered a bitter trade dispute between the two sides, South Koreans even boycotting Japanese products.One year on, our Eum Ji-young takes a look at how South Korean manufacturers have been dealing with the restrictions.Last July, Japan imposed unprecedented export controls on three key materials used for the production of chips and displays, namely photoresist, hydrogen fluoride and fluorinated polyimide.This raised concerns in South Korea, which imported more than 90 percent of some of those materials from Japan.However, South Korean firms managed to survive without any serious damage from the restrictions. One expert says it actually served as an opportunity for South Korea's small and medium sized enterprises because chip and display manufacturers have turned to locally-made materials as they look to diversify their suppliers."In the case of hydrogen fluoride, a substantial part of the demand is being met by domestic companies. For fluorinated polyimide, 100 percent of localization has been completed. Companies are in the process of developing EUV photoresist."SK Materials is one of the several domestic manufacturers that has successfully developed ultra-high purity hydrogen fluoride."Development of the ultra-high purity hydrogen fluoride has been accelerated due to Japan's export curbs."Another firm, Itchem has managed to localize core ingredients of fluorinated polyimide, which many domestic conglomerates had been purchasing from Japanese firms."Not only have local large display makers turned to our firm after Tokyo's export regulations, but Japanese conglomerates are also requesting our products due to their supreme quality.""Since last July, South Koreans have been boycotting Japanese products to express their anger over Tokyo's export curbs on Seoul. And this has led to dramatic changes to the trade balance between the two countries."According to Korea Customs Service, Japanese beer imports from January to May this year dropped a whopping 91 percent from the same period last year. And Japanese automaker Nissan Motors is shutting down its business operation in South Korea from 2021 after 16 years in the country.Eum Ji-young, Arirang News.