|Japan-South Korea trade dispute threatens global tech market |
July 13 06:45 am JST 65 Comments
By Claire LEE SEOUL
A simmering diplomatic row with Japan is threatening South Korea's output of components that drive smartphones and computer displays, which analysts say could batter the global tech market and hike prices for consumers.
Tokyo last week said it would restrict exports of three chemicals vital to South Korea's world-leading chip and smartphone industry in an escalation of a decades-long dispute over Japanese forced labour during World War II.
And with the issue showing no sign of ending any time soon, there are worries it could also delay the rollout of 5G technology and futuristic folding screens.
"If this situation persists, there may be reductions in production, which will drive up memory (chip) prices and certainly drive up end-product prices in turn," said Avril Wu, senior research director at Taipei-based market intelligence firm TrendForce.
While South Korea holds stockpiles, shortages could set in after three months, she told AFP.
South Korean President Moon Jae-in has called the situation an "unprecedented emergency" and told business leaders to prepare for a drawn-out crisis.
On Thursday, the country's ruling party called for an extra budget of 300 billion won ($250 million) to help local firms survive the upheaval, more than double what the prime minister had asked for a day earlier.
With Japan so far refusing to negotiate, the news is bleak for top market players Samsung Electronics and SK Hynix.
The two firms supply tech titans Apple, Huawei and Amazon, and together account for almost two-thirds of the world chip market, according to the Hana Institute of Finance in Seoul.
"South Korea is the world leader when it comes to chip-making, and Japan is the world leader in the manufacturing of the key materials for chip-making," said Ahn Ki-hyun, vice-president of the Korea Semiconductor Industry Association.
"With this trade row, Japan and South Korea are both losing the best partners. And neither of them will find good alternatives for a very long time," he added.
"Ultimately, this will bring a stagnation or regression of the world's most cutting-edge technology. The price of gadgets may rise, as chips will likely be in short supply."
continues at japantoday.com