The Ministry of Trade, Industry and Energy said on Sept. 3 that South Korean companies are likely to take a serious hit from Japan’s export curbs with regard to nine import items.
“When it comes to the nine items, South Korean companies are fully dependent on Japanese suppliers and finding an alternative supplier is almost impossible for now, which means their production setbacks are inevitable after any expansion of the export restrictions,” the ministry explained, adding, “Those items include secondary battery pouches and the combined global market share of Showa Denko and Dai Nippon Printing amounts to more than 70 percent in the market.”
The ministry also mentioned that South Korean companies’ degree of dependence on Japanese suppliers is at least 90 percent for 22 industrial materials and components, including those necessary for electric vehicle and hydrogen vehicle manufacturing. “Most of the 22 materials and components are indispensable for South Korea’s future growth industries and the growth of those industries will be increasingly affected as the ongoing confrontation with Japan continues,” a lawmaker said.
The South Korean government recently selected 100 vulnerable items so that local companies’ dependence on Japanese companies supplying the items can be significantly reduced within five years. The government is planning to enhance the supply stability of the undisclosed items by promoting in-house development and import source diversification at the same time.
In the meantime, the seized assets of Nippon Steel and the other Japanese companies that rejected the ruling of the Supreme Court of South Korea regarding compensation for wartime forced labor victims are scheduled to be turned into cash through auction in October this year. The Japanese government is likely to strengthen the restrictions in that case.