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Vice Chairman of Samsung Electronics Staying in Japan for Raw Material Procurement
Seeking to Circumvent Tokyo's Export Restrictions
Vice Chairman of Samsung Electronics Staying in Japan for Raw Material Procurement
  • By Jung Min-hee
  • July 9, 2019, 08:55
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Samsung Electronics vice chairman Lee Jae-yong at Gimpo International Airport before departing to Japan on July 7

Samsung Electronics vice chairman Lee Jae-yong flew to Japan on July 7 to deal with Japan’s display and semiconductor material export restrictions. The next day, he discussed the issue with a number of local entrepreneurs, expressing concerns that the restrictions may negatively affect Samsung Electronics’ memory and display panel production and then none other than Japanese companies such as Sony and Panasonic may take a hit as well.

The Nihon Keizai Shimbun reported that the vice chairman would ask Japanese partners to supply those materials from their production facilities outside Japan. Samsung Electronics has purchased photoresists from Sumitomo, Shin-Etsu and JSR, hydrogen fluoride from Morita and Stella, and fluorine polyimide for use in flexible OLED panels from Sumitomo.

Immediately after the Japanese government’s announcement of the restrictions, both Samsung Electronics and SK Hynix made efforts to procure the materials from such overseas facilities, and yet the efforts have been in vain so far. “The issue is basically diplomatic and intergovernmental, related to legal compensation for forced labor victims, and the facilities outside Japan are under the control of the Japanese government as well, which implies things are unlikely to get better in the near future,” said a South Korean entrepreneur.

Some experts point out that Samsung Electronics will be able to keep importing hydrogen fluoride from Stella, which has production facilities in Taiwan and Singapore. This is because South Korea can file a suit with the WTO once the Japanese government attempts to control overseas production.