A Long Way to Go for Independence
The Japanese government banned the export of hydrogen fluoride, photoresist and fluorine polyimide to South Korea in July 2019. South Korean companies have made efforts to replace the materials domestically and their efforts in cooperation with the South Korean government are bearing fruit. However, it is pointed out that there is still a long way to go for complete replacement and the government needs to concentrate more on R&D assistance.
According to the Ministry of Trade, Industry and Energy, the government’s relevant budget increased from 1.09 trillion won to 2.07 trillion won in 2020 and will increase to 2.55 trillion won this year. More than 85 percent of the budget is scheduled to go to equipment, material and component R&D.
Nonetheless, South Korea’s dependence on Japan in the industries is not decreasing. The former imported US$167.8 billion of materials and components in 2020 and those from Japan accounted for 16 percent of the total whereas the ratio was 15.8 percent in 2019. In addition, South Korea’s material and component trade deficit with Japan rose from US$14.15 billion to US$15.37 billion last year.
Experts point out that the government’s relevant policies are too wide in scope. For the 18 months since the export ban, the South Korean government has invested two trillion won to help develop 100 items. At present, R&D is underway for 85 items. “It is impossible to replace every item to the point of being competitive,” one of them advised, adding, “The government needs to focus on more promising ones to make its policies more effective.”