One month after Japan announced the ban on Korean products, how long can Samsung and SK's inventory last?

The import and export trade statistics of the Ministry of Trade, Industry and Energy of South Korea in July showed that the imports of semiconductor materials such as hydrogen fluoride, photoresists and etching gases, which Japan restricted from export to South Korea, from Japan dropped sharply to zero in July, compared with the import value of these items in the same month of 2018 of US$390 million!

According to Korean media reports, major Korean semiconductor manufacturers have not been able to import high-purity hydrogen fluoride and photoresist materials from Japan for one month since Japan announced the semiconductor material ban on July 4. It is estimated that the current raw material inventory of Samsung Electronics and SK Hynix can only last for 2.5 months, and the impact of Japan's ban on South Korea is expected to take effect in the third quarter.

As Japan's export review has been implemented for one month, the Korean industry speculates that SK Hynix only has 1.5 months of high-purity hydrogen fluoride and photoresist inventory left. Samsung Electronics' situation is similar. Although Vice Chairman Lee Jae-yong visited Japan in mid-July, he did not successfully resolve the problem of obtaining raw materials.

South Korean experts believe that SK Hynix executives visited Japanese raw material suppliers in Japan on July 21, but the main focus of the discussions between the two sides was not on resolving export reviews, but on how to strengthen bilateral cooperation.

In addition to trying to reduce the amount of raw materials used, SK Hynix is ​​also actively testing Korean-made semiconductor materials. It is understood that some Korean-made raw materials have passed SK Hynix's production standards and are expected to be actually used in semiconductor processes. However, due to technical differences between suppliers, it is impossible to immediately replace all raw materials with Korean suppliers. Therefore, if Japan's export review time is extended, SK Hynix may still be affected in the end.