October 30, 2024

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Semiconductor giants Samsung Electronics and SK hynix have requested parts suppliers to utilize domestic equipment and materials instead of those imported from Japan following its trade restrictions, according to news reports on Aug. 6.

“In the past, our clients (Samsung and SK hynix) usually rejected our offers to use local components due to concerns over performance and production stability issues,” an official from a local chip company was quoted by local news outlet Etoday as saying.

(From right)Samsung Electronics Vice Chairman Lee Jae-yong, Kim Ki-nam, CEO of Samsung`s DS business unit, Baek Heung-joo, head of the test and system package division, and Jin Kyo-young, head of the memory chip business. (Samsung Electronics)

“This time, however, they have asked us to replace as many Japanese parts as possible,” the official added.

The localization measures are thought to be aimed at reducing the risks of parts shortage amid the ongoing trade dispute between the two countries.

Samsung and SK hynix refused to confirm the news.

“We are considering different options to respond to the trade restrictions,” a Samsung official said.

The two companies are also said to be testing parts and materials from suppliers in China and Taiwan.

Some market watchers painted a rosy picture of the ongoing localization efforts, saying it would eventually help the nation wean itself away from Japan when it comes to precision machine tools and chemical products needed in producing chips and displays. Some others, however, were skeptical as it could take years to localize the key components.

“It will take quite a long time for local suppliers in the chip sector to have stable production capability,” said an industry official, who asked to be unnamed.

On Aug. 5, both Samsung Vice Chairman Lee Jae-yong and SK hynix Chairman Chey Tae-won called an emergency meeting with their top brass to discuss countermeasures against Japan’s trade curbs targeting the Korean chip, display and battery sectors.

The CEOs of Samsung Group affiliates, including Samsung Display, Samsung Electro-Mechanics and Samsung SDI, are said to have partaken in the meeting.

By Kim Young-won (wone0102@heraldcorp.com)