SK Hynix, the world’s No.2 memory chipmaker, may be forced to shutter some of its assembly plants following the Japanese government’s latest decision to ban or limit the exports of semiconductor materials to South Korea.
“It’s a little less urgent for Samsung Electronics, which has its own warehouse in Korea, but for SK hynix, it may be faced with the very real possibility of shutting down assembly lines because it buys supplies sporadically, whenever necessary,” one industry source told The Elec on the condition of anonymity.
Both Samsung and the SK unit have consequently dispatched buyers to Japan to secure whatever supplies they could get its hands on, he added.
These reports came after the Sankei Shimbun announced that Tokyo would restrict Japanese exports of three key materials needed for producing memory chips as of July 4 in relation to an ongoing dispute over Seoul’s court ruling over war-time forced labor. Fluorinated polyimide, photoresist and high-purity hydrogen fluoride, which are key components of OLED displays.
About 30 percent of high-purity hydrogen fluoride can be supplied domestically, but high-tech photoresist is almost entirely from Japan, with companies like JSR and TOK as main suppliers.
Wider restrictions involving other materials are to take effect as of August 1.
Another industry watcher forecast that if the situation drags on, chipmakers would be forced to process the materials elsewhere, such as China and the US, then import them. But in this case, prices would naturally surge, he said.
Some believe over the export ban could eventually boost the memory chip market.
“Local chipmakers and display makers may suffer initially, but over the mid and long-term, this could be a blessing in disguise,” said Kim Yang-jae, a researcher for KTB Investment & Securities. “Semiconductors and displays are currently stuck in a supply glut, so this could create an opportunity for the manufacturers to empty their inventory. The local chipmakers can also use this as leverage to drive down prices from Japanese suppliers in the future.”
In the local equities market, companies like Dongjin Semichem, Soulbrain, Foosung Chem and Ram Technology, which produce photoresist and high-purity hydrogen fluoride, saw their stock prices soar.