Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

South Korea finance minister warns of direct countermeasures to Japan's export curbs

Economy Jul 04, 2019 06:55AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: The logo of Samsung Electronics is pictured at the company's factory in Tijuana
 
AAPL
+0.27%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
000660
-0.61%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
005930
+0.56%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
5401
0.00%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Ju-min Park

SEOUL (Reuters) - South Korea said on Thursday it may retaliate against Japan's latest export limits on high-tech materials, as a row over forced wartime labor threatened to disrupt global supplies of memory chips and smartphones.

Samsung Electronics Co (KS:005930) and SK Hynix Inc (KS:000660) - the world's top memory chipmakers, and suppliers to Apple (O:AAPL) and China's Huawei Technologies - could face delays if the measures that took effect on Thursday drag on.

"Implementing corresponding measures against Japan cannot be ruled out," Finance Minister Hong Nam-ki told South Korea radio. He said the trade row could cause "unfortunate damage to both Korean and Japanese economies".

The dispute is the latest flashpoint in a quarrel over South Korean efforts to seek compensation for Japan's use of forced wartime labor, which got fresh impetus from South Korean court rulings last year.

The curbs on exports of three materials used in South Korean chips and smartphone displays, which Japan had announced on Monday, will disrupt the global supply chain, South Korea's trade minister said.

Japan accounts for 70%-90% of the production of the three materials, Japanese media have said, making it difficult for South Korean chipmakers to find alternative sources of supply.

"It will pose a huge uncertainty and threat to the global economy by shaking up the global supply chain," Trade Minister Yoo Myung-hee told a meeting of industry groups on Thursday.

South Korea's presidential office said on Thursday that it plans to actively seek diplomatic countermeasures, including complaining to the World Trade Organization (WTO) against the "retaliatory" export curbs.

"We will explain to major countries about the unfairness of Japan's action, and the fact that this violates the principle of free trade," Yoon Do-han, press secretary to the President, said in a statement.

Finance Minister Hong had said it would take a long time to get a WTO ruling on the dispute.

The row exploded late last year when South Korean court rulings ordered Japan's Nippon Steel & Sumitomo Metal Corp (T:5401) and Mitsubishi Heavy Industries Ltd to pay hundreds of thousands of dollars to South Korean plaintiffs.

Japan denounced the court verdicts as "unthinkable".

The two countries share a bitter history that includes Japan’s 1910-45 colonization of the Korean peninsula and the use of comfort women, Japan's euphemism for girls and women, many of them Korean, forced to work in its wartime brothels.

FIGHT JUST STARTING

Both sides showed no signs of backing down in the trade dispute.

Kyodo News Agency reported on Tuesday that Japan was considering expanding its export controls to more items bound for South Korea.

The leader of South Korea's ruling Democratic Party, Lee Hae-chan, said: "This fight is just in the beginning, not the end".

The items affected by Japan's curbs include photoresists and hydrogen fluoride, both essential materials in the chipmaking process at Samsung and SK Hynix.

Samsung was reviewing measures to minimize the impact on its production, the company told Reuters.

SK Hynix declined to comment. The company sent a letter to its clients on Tuesday saying it could handle the current situation in the short term, but there would be problems if the curbs dragged on, a source with knowledge of the matter said.

"Without these materials, which South Korean chipmakers rely on mostly from Japan, the whole process of semiconductor manufacturing can be in trouble," the source said, asking for anonymity due to the sensitivity of the matter.

South Korea finance minister warns of direct countermeasures to Japan's export curbs
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email