Helping SMEs Localize Parts and Components
Samsung Electronics is planning to focus on helping smaller South Korean firms develop semiconductor and display materials and components, rather than developing those on its own, against Japan’s export restrictions. This is because Samsung Electronics is a key part of the global electronics and IT value chains and its self-development activities can have a negative impact on the structure of international division of labor and its own credibility.
The Japanese government has restricted exports of etching gas, photoresists and fluorine polyimide to South Korea since July 4 for national security purposes. At present, Samsung Electronics is not planning to develop the chemicals on its own although most of the chemicals it uses are from Japan.
“It is true that we have tested some possible alternatives since the implementation of the restrictions, but those are yet to be applied to mass production processes in place of the same materials from Japan,” a company official explained, continuing, “We are not going to develop the chemicals on our own, and we will be in line with the policy of the South Korean government by supporting small and medium-sized enterprises (SMEs).”
“Samsung Electronics has not broken the international supply network in the industry for 30 years or so since it developed South Korea’s first DRAM chip in the early 1980s,” said a semiconductor industry expert, adding, “In that network, Samsung Electronics purchases materials and components from Japan, Taiwan, Europe and so on and manufactures chips as intermediate goods for supply to global TV, consumer electronics and mobile phone manufacturers.” He went on to say, “Those clients including Japanese companies will strongly resist Samsung Electronics’ engagement in material and component production in that it can threaten their own survival.”
“We are currently providing the support via the Korea Semiconductor Industry Association,” a Samsung official explained, adding, “Specifically, we are testing existing and potential partner firms’ materials and components at our places of business while providing R&D support for them.”