Fate of S. Korea-Japan military pact in doubt amid escalating export row

Japan’s curbs aimed at containing S. Korea’s semiconductor industry: report

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Published : 2019-07-12 16:14
Updated : 2019-07-12 16:19

The latest restrictions on exports of key chip-making materials imposed by the Japanese government could be aimed at containing South Korea’s thriving semiconductor industry, a report claimed Friday.

Park Sang-hyun, analyst at HI Investments & Securities said in a report that the rising tensions between Japan and Korea could be based not only on diplomatic issues but also the widening gap between the competitiveness of the Japanese and Korean semiconductor industries.

“The Japan-imposed curbs could be viewed as an attempt to contain Korea in the upcoming competition in the semiconductor industry,” Park said. “Especially in the non-memory sector, Japan could be wanting to hamper Korea’s plan to be the leader in logic chips.”

Park compared the latest Korea-Japan spat with a similar conflict between Japan and the United States in the 1980s.

The US government back then put pressures on Mitsubishi Electricity, Hitachi and Toshiba by accusing the Japanese IT businesses of dumping their products. The US signed an agreement with Japan that prompted Japan to increase imports of US-based chips.

“At the time the US government pressed the Japanese firms because they were recognized as the leaders of the world’s most cutting-edge industry, and were concerned that might undermine the national and industrial status of America,” Park said. 

(Samsung Electronics)

If the US has implicitly agreed with Japan on the restrictions, the likelihood of Japan expanding the current restrictions to a broader scope or for a longer period are high, the analyst said.

“Korea’s goal of growing its share in the non-memory market wouldn’t be tolerated by the US either,” Park said. “In this case, both the US and Japan could attempt to keep Korea in check.”

By Song Su-hyun (song@heraldcorp.com)