According to www.cambridge.org, Japan imposed export controls on three critical semiconductor materials—fluorinated polyimide, photoresists, and hydrogen fluoride—in July 2019, directly targeting South Korea’s high-technology supply chain.
Export Restrictions and Immediate Fallout
The Japanese government removed South Korea from its ‘white list’ of trusted trading partners on August 28, 2019, a status previously held by only 27 countries. This decision required individual licensing for exports of 1,147 controlled items, including the three materials essential for OLED display and memory chip production. According to the report, Japan’s Ministry of Economy, Trade and Industry (METI) cited ‘concerns over export control compliance’ as the official justification—though South Korean officials contested the evidence behind the claim. The controls took effect just 15 days after METI’s announcement, compressing lead times for Korean firms reliant on Japanese suppliers.
Market-Scale Impact on Key Materials
South Korea imported $6.03 billion worth of materials, parts, and equipment (MPE) from Japan in 2018—the year before the dispute erupted. Of that total, fluorinated polyimide accounted for 94% of global supply, with Japan’s Sumitomo Chemical and Shin-Etsu Chemical dominating production. Photoresists represented 89% of Japan’s $1.2 billion annual MPE exports to South Korea in 2018, while ultra-pure hydrogen fluoride—used in silicon wafer etching—was supplied almost exclusively by Stella Chemifa and Kanto Chemical. The source states that South Korea’s domestic capacity for these materials stood at less than 5% of national demand at the time of the controls’ implementation.
Corporate and Industrial Response
Samsung Electronics and SK Hynix—two firms responsible for 72% of global DRAM output and 50% of NAND flash production—faced immediate inventory pressure. Samsung reported a 12.4% year-on-year decline in operating profit for Q3 2019, partly attributed to procurement uncertainty. According to the report, both companies accelerated R&D investment into local alternatives: SK Hynix allocated ₩320 billion ($268 million) toward domestic material qualification between 2019 and 2021, while Samsung partnered with Korean firms including ENF Technology and SFA Engineering to co-develop hydrogen fluoride purification systems. A senior executive at a Korean display manufacturer stated:
“We had to hold 12 weeks of buffer stock for fluorinated polyimide—up from our standard 4-week safety margin—just to avoid line stoppages.” — Park Min-jae, Procurement Director, LG Display
Broader Supply Chain Implications
The dispute catalyzed structural shifts across East Asia’s tech supply chain. By 2022, South Korea’s domestic share of fluorinated polyimide usage rose to 18%, up from 3.1% in 2018. Meanwhile, Japan’s MPE exports to South Korea fell 21.7% year-on-year in 2020, dropping to $4.72 billion. Industry data cited in the article shows that 27 Korean firms received government-backed R&D grants totaling ₩1.1 trillion ($920 million) between 2019 and 2022 to localize MPE production. From a practitioner perspective, procurement teams at tier-1 electronics manufacturers now routinely conduct dual-sourcing audits for all Class-A critical materials—and require minimum 8-week onshore buffer inventories for any item with >70% single-country supply concentration.
Source: www.cambridge.org
Compiled from international media by the SCI.AI editorial team.
