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Samsung Electronics, SK Hynix Respond to Japan’s Export Restrictions in Different Ways
Desperate to Secure Raw Materials
Samsung Electronics, SK Hynix Respond to Japan’s Export Restrictions in Different Ways
  • By Michael Herh
  • July 16, 2019, 10:18
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Samsung Electronics and SK Hynix are using different approaches to responding to Japan’s export curbs. 

Samsung Electronics and SK Hynix, the No. 1 and No. 2 memory chipmakers in the world, are responding to Japan’s export curbs in different ways. In the case of Samsung Electronics, vice chairman Lee Jae-Yong is in the forefront of searching for ways out of the crisis. At SK Hynix, working level officials are leading the efforts to cope with the export restrictions.

Samsung Electronics and SK Hynix are striving to secure raw materials in preparation for a possible extension of the Japanese government's long-term restrictions on exports of semiconductor and display materials to Korea, sources in the semiconductor industry said on July 15. Both companies have sent out purchasing personnel to Japan since the Japanese government's tightening of export regulations, and sent letters to customers to make sure that their production would continue without any big problems.

As mentioned above, both companies are actively preventing interruptions in receiving materials in order to prevent production from stopping and maintain customer trust, but semiconductor industry observers point out that they are employing different strategies in terms of their top management's moves.

First of all, Samsung Electronics vice chairman Lee directly flew into Japan and searched for solutions. After his business trip to Japan, he held a meeting with top executives of the Semiconductor (DS) and Display Business Divisions, and told them to devise countermeasures by scenario to prepare for the extension of Japanese export regulations.

In contrast, SK Hynix is ​​concentrating on securing materials with its working level employees front and center. As the political and diplomatic problems between Korea and Japan had triggered the current situation, SK Hynix was employing a strategy that does not accentuate its moves as an individual company, the observers said.

In addition to the differentiation of coping strategies, they also say that a difference in technology between the two companies' foundry businesses made their strategies different. This is because the Japanese government is tightening regulations on the export of etching gas and high-quality photoresists used in ultrafine processes such as an extreme ultraviolet (EUV) process.

For example, Samsung Electronics prepared a full-scale volume production system by beginning production of its products through a 7nm EUV foundry process in April, while SK Hynix is reportedly using Japanese materials for research and development rather than mass production. This difference makes the two Korean chipmakers feel different about securing materials, they say.