Japan okays one shipment of material Samsung needs for its most advanced chips

Japan okays one shipment of material Samsung needs for its most advanced chips
The term Free trade has become an oxymoron. Just look at the mess that is taking place with the U.S. and China. As we've pointed out countless times, the tariffs that the U.S. is imposing on imports from China (which start to directly impact the Apple iPhone on September 1st) are import taxes that are paid by U.S. corporations. The latter can decide to eat some or all of the additional taxes lowering their profit margins or pass along the higher costs to U.S. consumers. China is retaliating by devaluing its currency, the Yuan. This makes Chinese goods cheaper to buy in the states but will force Apple to raise the price of the iPhone in China.

This isn't the only trade war going on. Japan and South Korea have been fighting since last October. That's when a South Korean court ruled that South Koreans forced to work for Nippon Steel during World War II must be compensated for their labor. Calling the decision "unthinkable," Japanese authorities said that the issue had already been decided when the two countries restored diplomatic ties in 1965.

Japan approves the export of a material Samsung uses to produce its most advanced chips

To retaliate against the court decision, Japan started restricting the export to South Korea of materials like fluorinated polyimide and resist, and high-purity hydrogen fluoride (HF). These are used in the production of chips used inside smartphones, and for smartphone displays, respectively. Beginning last month, companies looking to ship these materials to South Korean phone manufacturers like Samsung and LG need to apply for permission to do so. Receiving such approval could take as long as 90 days. That's because Japan has removed South Korea from its "white list" of trade partners that have fast-track trade status. South Korea plans on discussing the removal of Japan from its "white list" but has tabled the matter for a future time. It does plan on tightening regulations on some of Japan's exports into South Korea for materials used in other industries besides tech.

According to Reuters, for the first time since announcing the restrictions, Japan has approved a shipment of EUV photoresists to South Korea. Samsung uses this material to help it mask or map out designs on the silicon that ends up in chipsets. These show the placement of billions of transistors and EUV, or extreme ultraviolet lithography, allows for more precise designs to be made. This leads to the design of more powerful chips that consume less energy. Japan controls as much as 90% of the global market for this material, so Samsung cannot simply move on to another country to source the EUV photoresist it needs.

However, it doesn't seem as though this approval changes anything between the two countries. A South Korean senior trade ministry official pointed out that Japan "approved only one out of a number of items," and a presidential official said that  Japan's actions "doesn’t mean that uncertainties have been completely removed for the other items." While these materials can be used to produce smartphones, they also can be used to manufacture weapons.

Apple iPhone models that sport an OLED display (iPhone X, iPhone XS, iPhone XS Max) and those expected to be equipped with such a screen (iPhone 11, iPhone 11 Max) could be affected by this trade war. That's because, as we've mentioned, high-purity hydrogen fluoride (HF) is used to produce smartphone displays. As one of the materials that Japan will no longer allow to be shipped to South Korea without permission, both Samsung and LG could face delays in obtaining it. And that could mean that Apple, which purchases its OLED panels for the iPhone from both South Korean firms, could find itself scrambling for this important part as production gears up for the 2019 iPhone models.



1. Kingnukem

Posts: 1; Member since: Aug 08, 2019

I feel sorry for the poor author, whose understanding of economics is at the same level as my understanding of hyeroglyphics. Tariffs result in a loss of sales. What China is doing in response is lowering the standard of living of its citizens. Meantime, foreign companies in China are scrambling to get out as fast as possible, giving the Chinese economy another jolt. And the USA barely feels it.

7. mootu

Posts: 1541; Member since: Mar 16, 2017

"Tariffs result in a loss of sales" So why has the US - China deficit increased in the 18 months that the trade spat has been running. Devaluing the yuan is a genius move as it essentialy wipes out the value of Trumps tariffs, China is just protecting it's foreign market. and the Yaun has been held artificially low for years otherwise the currency would be very strong. As for the USA barely feeling it, tell that to the farmers that Trump is having to subsidise to the tune of $16 billion. You talk as though China is struggling yet they still have growth of over 6%, thats double US growth and numbers any western nation would kill for.

8. TBomb

Posts: 1671; Member since: Dec 28, 2012

I don't quite understand everything that is happening, but I'm assuming lots of China's "growth" is through it's rail projects out in Africa will China will basically be using to "own through debt" those countries in Africa in a few years. I feel like any country and move smoke and add mirrors to make statistics and money work out in their favor. China probably has the easiest time doing this.

9. mahalo15

Posts: 84; Member since: Nov 30, 2018

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