The government of Japan has made a decision that should seriously affect Samsung and LG. According to information released by the Japanese portal Sankei, the administration of Prime Minister Shinzō Abe should begin to restrict the export of some essential chemicals to the South Korean giants.
The action was motivated by an impasse that has been dragging since the end of World War II. During the years of the conflict, the Japanese occupied the territory that now belongs to the two Koreas (South and North) and promoted a series of acts that were considered a crime.
Therefore, the South Korean Supreme Court held that the Koreans were not “properly compensated” by Japanese companies for forced labor during World War II. The ruling was issued last year and aroused the ire of the Japanese.
As a consequence, the impasse has not been resolved and the government of Japan has issued a note with supplies that will require a “special permit” to be exported to South Korean companies. Check the bill of materials:
polyimide fluoride (used in smartphone and TV displays ), resistor (used in PCB chips), and high purity hydrogen fluoride (used in semiconductors).
The list may seem small, but it should cause a huge headache for Samsung and LG. This is because Japan produces about 90% of the fluorinated polyimide and 70% of the resistors. To make matters worse, a “permit” to export these products takes up to 90 days to ship.
For now, there is no agreement between countries. Even so, Japan has already said in a statement that it will remove South Korea from the simplified permit list on July 4:
After reviews by relevant ministries, it must be stated that trust relations between Japan and South Korea have been seriously damaged.