Samsung asks local partners to secure Japanese parts amid export curbs

Published : Jul 18, 2019 - 20:15 Updated : Jul 18, 2019 - 20:15

Samsung Electronics Co. is exploring all possible means to secure stock piles of Japanese materials in preparation for Tokyo expanding its export restrictions, company sources said Thursday.

The tech giant has sent letters to its local partners in the production of televisions, consumer electronics and smartphones, urging them to secure various Japanese components by the end of July, or before Aug. 15 at the latest.

Japan began applying stricter export rules to South Korea for three key materials needed to make chips and displays on July 4 over the wartime forced labor issue. It is pushing to remove South Korea from a list of trusted buyers, which could affect the supply of other key materials needed to make smartphones, televisions, chemicals and other industrial materials.

The Japanese government is expected to announce the decision on the white list after a review process that ends on July 24.

(Yonhap)

"The Japanese government has recently applied stricter regulations on materials needed for semiconductor manufacturing, and is considering removing South Korea from a white list," Samsung said in the letters sent earlier this week. "If South Korea is excluded from the white list, it is likely that Japanese companies will be required to seek approval for all materials bound for South Korea."

Samsung promised to shoulder additional costs for securing the stockpiles and pay reimbursement for the supplies if they remain unused after the proposed deadline, the letter noted.

Tokyo's move to exclude Seoul from its white list of countries on national security grounds would require Korean companies to seek export licenses for a wider range of technologies, which could result in additional costs and time.

Samsung may become a prime target if the scope of export controls expands beyond materials for chips and displays to smartphones, televisions and other consumer electronics.

In the face of rising trade risks, Samsung Electronics Vice Chairman Lee Jae-yong last week visited Japan to minimize fallout from the export regulations of three materials to prevent a disruption of production in its facilities and order top executives to prepare scenarios from Japan's expansion of export curbs. (Yonhap)