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Japan invokes export controls against S. Korea

The Yomiuri ShimbunThe government on Thursday invoked a measure to tighten export controls against South Korea on three items, including hydrogen fluoride needed to produce semiconductors and other devices.

Under the measure, exporters are required to apply to the government for each shipment, and screening of the applications will take about 90 days. The move could affect Japanese companies, such as those in the electronics industry, that do business with South Korean manufacturers.

The three items are hydrogen fluoride, which is used to clean semiconductors; fluorinated polyimide, used in smartphone displays; and resist, a photosensitizing agent for semiconductor substrates. Japan holds a 70 percent to nearly 100 percent share of these materials in the global market.

South Korean companies, including Samsung Group and LG Group, procure almost all their supply of the materials from Japan.

Since 2004, the Economy, Trade and Industry Ministry had waived applications for individual licenses to export these items to South Korea for three years, in principle. However, this preferential treatment has been halted.

From now on, permission must be sought for every export contract by filing an application with the ministry.

South Korea is said to have reserves of only about one month’s supply of the three items. Production of semiconductors and organic electroluminescent panels could be delayed in South Korea possibly in August, and that could deal a blow to the South Korean economy, for which semiconductors are a key industry.

The measure could also affect television production by Panasonic Corp. and Sony Corp., which use organic EL panels produced in South Korea. Output of Apple Inc.’s iPhone could likewise be affected.

Furthermore, the government has started the process of revising a Cabinet order to remove South Korea from the list of so-called “white countries” that can receive preferential treatment that simplifies export procedures, and to require individual export applications for items other than these three materials. The government intends to revise it by the end of August after seeking comment from the public.

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