Samsung Asks Parts Suppliers to Secure 90-day Inventory
Samsung Electronics secured high-purity hydrogen fluoride equivalent to a two-month inventory after the Japanese government restricted the export of semiconductor and display materials to South Korea on July 4. The company is planning to keep improving the efficiency of its semiconductor manufacturing processes and working closely with overseas suppliers for more procurement. The company recently asked its partner firms to increase their inventories to a 90-day amount.
Until July 3, Samsung Electronics’ hydrogen fluoride inventory had been less than a one-month amount. “Samsung Electronics used to maintain its hydrogen fluoride inventory at a two week-amount or less with regard to environmental regulations before beginning to increase it months ago,” said an industry insider, adding, “Its current inventory will hold out until September this year and there will be no immediate problem regarding the production and supply of memory chips, which Samsung Electronics can continue to supply for at least 75 days as of now.”
Still, the company is not perfectly safe in that Japan’s export restrictions can be prolonged. “The Japanese government prepared the measure for a very long time and public opinions in Japan are in favor of the measure, which implies the restrictions are not going to end soon,” said a Japanese consulting firm.
It is in this context that the Consumer Electronics (CE) and IT and Mobile (IM) Divisions of Samsung Electronics recently asked the partner firms to increase their inventories by Aug. 15. The divisions also said that the partner firms do not have to be worried about their inventory costs. “We will bear every additional procurement cost and cost related to unused inventory,” Samsung Electronics explained.