Technology experts in Japan holding back on trade with South Korea could harm both of them  

 

Japan’s Ministry of Trade, Economy, and Industry announced earlier in this week that it will be tightening the restrictions of its export of high technology materials to South Korea. This has caused serious damage to the relationship of mutual trust that they had built.

Under these new restrictions that took effect on Thursday, separate applications will be required for the export of three specific materials that are used in products of high technology to South Korea. This procedure can take up to 90 days.

These materials are hydrogen fluoride, fluorinated polyimide, and resist. These materials are utilized in the manufacturing of semiconductors and the screens of televisions and smart phones..

On Monday, Japan also indicated its plans of removing S. Korea from its “white list”, a list that includes all the countries that have shipment priority.

This move was a result of the souring of the relationship between Japan and South Korea last year due to some court rulings of S. Korea that ordered the Japanese Firms to compensate its laborers that were made to serve the companies during the World War Two.

Experts have said that this decision could heavily impact the technological industries of both countries, whose supply chains are deeply linked.

According to the South Korea Trade Association, among the 3 materials which Japan has tightened export controls, South Korea has imported 90% or more from Japan of 2 materials.

According to the expert, if exports to South Korea are restricted, there will be an oversupply of production equipment and investment, and even the survival of Japanese enterprises will be threatened.