South Korea accuses Japan of blocking semiconductor material exports after 90-day review period

The Japan-South Korea trade dispute shows no signs of abating. South Korea's Ministry of Trade stated in a statement on the 1st that Japan continues to delay approval of the export of key materials for the semiconductor manufacturing industry and demanded that Japan immediately remove its "unfair and discriminatory export control measures."

South Korea's trade ministry said a Japanese exporter of liquid hydrogen fluoride, a high-purity chemical used for cleaning and etching chips, has not yet been released 90 days after it applied.

South Korea said the Japanese government had repeatedly requested additional documents from exporters and had not approved export applications for the material after a 90-day review period, while applications for other materials were approved in a "heavily restrictive manner."

Japan has imposed export controls on three key materials for the production of high-end chips and flexible displays to South Korea, effective July 4. The South Korean Ministry of Trade pointed out that although the 90-day review period is not explicitly stipulated, it is a common practice for the export application process.

The statement pointed out: "Japan's export controls on South Korea are unpredictable, which has led to increased uncertainty in the supply chain and seriously affected business operations." South Korea also accused Japan of conducting case-by-case reviews of exports of specific materials, which constituted "discriminatory treatment."

Since the control came into effect, Japan has approved the export of some fluorinated polyimide, photoresist and gaseous hydrogen fluoride to South Korea. South Korean technology giants Samsung Electronics and KS Hynix rely on Japan to import these materials and have begun looking for alternative sources, but it may take months. Investors and market observers are increasingly concerned that the escalating trade tensions between Japan and South Korea may disrupt the global supply chain.

On the other hand, South Korean officials said that Japan's regulations have not actually affected the production capacity of South Korean companies.

South Korean Deputy Prime Minister and Minister of Strategy and Finance Hong Nam-ki said in response to a question in the National Assembly that Japan has removed South Korea from its trade whitelist and restricted the supply of key components, new materials and technical equipment, but there has been no actual impact on the productivity of South Korean companies.

In addition, South Korea recently imposed tariffs on Japanese pneumatic valves that were improperly sold at low prices, and was sued at the WTO. The WTO Dispute Settlement Committee passed a final ruling that South Korea violated the WTO agreement. The South Korean government also filed a complaint with the WTO on September 11 against Japan's strict control of semiconductor raw material exports. The confrontation between Japan and South Korea is also becoming increasingly fierce in the WTO.