Imports increased by nearly 80%! South Korea still relies heavily on Japanese semiconductor equipment

SMM: according to BusinessKorea, the Korean Trade Association (KITA) announced on September 6th that in the first seven months of 2020, South Korea imported semiconductor devices and integrated circuit manufacturing equipment from Japan totaling 1.7 billion US dollars, an increase of 77.2 percent over the same period last year. In addition, imports of processors and controllers and photosensitive semiconductor devices increased by 8.6% and 3.7%, respectively.

Although South Korea's total imports from Japan fell by about 10% in the same period compared with the same period last year, the semiconductor sector, as a pillar industry, is still heavily dependent on Japan.

South Korean media pointed out that this data is related to the large-scale investment of Samsung Electronics. The company announced in May that it would build a NAND flash memory production line in Pingze and plans to start building a "P3" fab in September, which is expected to become Samsung's largest fab in Pingze.

In addition, the new factory needs advanced equipment and manufacturing machinery, but it is difficult for local enterprises to meet the technological needs of Samsung, SK Hynix and other enterprises. At present, Samsung Electronics and many other South Korean companies still rely on Japanese semiconductor devices as high as 25.7%, almost the same as last year's 27.4%. Even if equipment from other countries is used to reduce dependence on Japan, it will not be easy to maintain the same level of efficiency.

On the other hand, South Korea's dependence on Japanese semiconductor equipment directly leads to its dependence on Japanese engineers. Usually, new equipment imported from South Korea is installed by Japanese engineers sent by suppliers, which led to the exemption of Japanese engineers from self-isolation when they entered South Korea in July. Despite violating the principle of reciprocity and risking the spread of the epidemic, the South Korean government cannot ignore companies' concerns about production disruptions.

It can be said that since Japan imposed trade controls on semiconductor materials in South Korea, the Korean government and enterprises have been working hard to improve the competitiveness of the materials, parts and equipment industries, as well as increasing support for the semiconductor and display industries. But for now, it will take time to be self-sufficient.

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