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Japanese reliance to end in South Korea for 20 products

South Korea plans to spend $6.42bn to boost industry's R&D

On Monday, the South Korean government said it would discourage its industry from depending on 20 Japanese exports within a year, as political tensions between the countries threaten its electronics market.

The announcement followed a formal decision by the Japanese government to remove South Korea from a “white list” of 27 preferential trade-related countries.

The 20 products include hydrogen fluoride and the other materials used to produce semiconductors that Tokyo began rigorously to monitor in July.

Nonetheless, it is unknown if South Korea will achieve its objective; it takes long periods of R&D to produce high-tech materials and components.

The South Korean Ministry of Commerce, Industry and Energy published a list of 20 products that called for the “reinforce materials, components and equipment competitiveness.” part of the plan to achieve a stable supply from non-Japanese sources in one year.

Japan supplied 70 to 90 per cent of the South Korean industry’s demand for these products.

In all, 100 things are classified as strategic by the South Korean Ministry. This broader scope includes semi-conductor, display panels, vehicles, electronics, machinery, metals and essential chemicals.

The broader list was not released, but the plan calls for reliable supplies from non-Japanese sources.

This will be done by increasing imports from non-Japanese countries and by increasing domestic production.

The government of South Korea will spend 7.8 trillion ($6.42 billion) on research and development activities for over seven years. The Government would promote joint development ventures between large customers, such as Samsung Electronics, and domestic component builders to increase domestic production. The plan also demands that customs processes be streamlined by providing 24-hour service and reducing taxes.

A source in the electronics industry in South Korea, however, said that although the government sets targets, they seem impractical.

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