News Article

South Korea look into invest ¥91.8 billion in chip supply chain

A senior governing party lawmaker said Wednesday after Japan loosened curbs on imports of some high-tech products to the nation, South Korea will try to spend 1 trillion won (91.8 billion yen) annually in creating homegrown products and machinery used to create microchips.

Japan said Monday, in the widening conflict over payment for South Koreans compelled to operate for Japanese firms during World War II, it would loosen laws on imports of products used in smartphone screens and chips to South Korea.

“We’re doing a preliminary feasibility analysis (on the budget),” Democratic Party’s Cho Jeong-sik informed journalists after gathering with presidential office leaders and government ministries to address a reaction to Japan’s choice.

Export curbs could hamper manufacturing at South Korea’s chip giants Samsung Electronics Co. and SK Hynix Inc. as the two specific chemicals are crucial, commentators believe.

Data company IHS Markit said on Wednesday that trade constraints against South Korea would contribute to global trade problems. Asian exporters are already being stressed by a continuous slowdown in the worldwide electronics sector.

“Reducing or eliminating the accessibility of these components will considerably impede the manufacturing of storage and other semiconductor chips, affecting significant semiconductor manufacturers including Samsung Electronics and SK Hynix,” said Len Jelinek, Executive Director of Semiconductor Research at IHS Markit, in a statement.

Industry Minister Hiroshige Seko said Tuesday that the choice to loosen controls was not in breach of the regulations of the World Trade Organization, rejecting the previous allegations of South Korea.

Cho, the South Korean ruling party lawmaker, shrugged criticism in local media that the government is not rapidly laying out countermeasures. But he did not provide further information on the size of the expenditure.

Shares in South Korean tablet products manufacturers fell after the government’s expenditure scheme was rendered open.

Shares of Ram Technology and Ocean Bridge, local chemicals production companies used in the chip manufacturing method, grew as much as 20 percent and 15 per cent, respectively.

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