{"id":2200435,"date":"2023-03-17T18:16:54","date_gmt":"2023-03-17T09:16:54","guid":{"rendered":"https:\/\/koreapro.org\/?p=2200435"},"modified":"2023-04-05T16:07:55","modified_gmt":"2023-04-05T07:07:55","slug":"yoon-suk-yeols-task-convincing-south-koreans-its-ok-to-get-along-with-japan","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2023\/03\/yoon-suk-yeols-task-convincing-south-koreans-its-ok-to-get-along-with-japan\/","title":{"rendered":"Yoon Suk-yeol\u2019s task: Convincing South Koreans it\u2019s OK to get along with Japan"},"content":{"rendered":"
Diplomatic relations between South Korea and Japan have thawed rapidly since the Yoon Suk-yeol administration announced its <\/span>unilateral plan<\/span><\/a> to compensate Korean victims of Japanese forced labor programs, leading to the first bilateral summit in more than 11 years.<\/span><\/p>\n During a <\/span>joint press conference<\/span><\/a> after their meeting on Thursday, South Korean President Yoon and Japanese Prime Minister Fumio Kishida made two significant announcements. First, Japan will <\/span>lift<\/span><\/a> the <\/span>export restrictions<\/span><\/a> that it had imposed on South Korea since 2019. Second, the two countries will normalize the General Security of Military Intelligence Act (GSOMIA), a military intelligence-sharing pact.<\/span><\/p>\n The two announcements signal an opportunity for South Korean corporations to stabilize their supply chains and for Seoul to defend itself from North Korea’s nuclear and missile threats more effectively. However, much of this progress will depend on Yoon\u2019s ability to convince South Korean voters that his decision to improve Seoul\u2019s ties with Tokyo \u2014 as heavily criticized as it was by victims, activists and opposition parties \u2014 was the right call.<\/span><\/p>\n IMPROVED SEMICONDUCTOR PRODUCTION YIELDS<\/b><\/p>\n South Korea\u2019s economy has logged <\/span>record trade deficits<\/span><\/a> over the past <\/span>12 months<\/span><\/a>, as exports of computer chips and other high-tech items sank amid a global economic slowdown.\u00a0<\/span><\/p>\n According to Korea International Trade Association (KITA) \u2014 an umbrella economic organization representing South Korea\u2019s international trade community \u2014\u00a0 semiconductor exports <\/span>decreased<\/span><\/a> by 44.5%, accounting for over half of the decrease in total exports.<\/span><\/p>\n However, not all semiconductor manufacturers are suffering. While Samsung Electronics <\/span>recorded<\/span><\/a> a $2.3 billion loss from its memory chip business in the first two months of the year, Taiwan Semiconductor Manufacturing Company (TSMC) <\/span>logged<\/span><\/a> a $9.7 billion profit in the final quarter of 2022.<\/span><\/p>\n One of the reasons Samsung Electronics has lost market share to its Taiwanese rival has to do with production yield issues. Semiconductor yields <\/span>refer<\/span><\/a> to the percentage of the total number of chips that were produced to the maximum chip count on one wafer \u2014 the key material used to create semiconductor integrated circuits.<\/span><\/p>\n Samsung Electronics <\/span>lost a deal<\/span><\/a> to manufacture Qualcomm\u2019s Snapdragon 8 chips to TSMC last year due to its yield issues. While Samsung announced a <\/span>plan<\/span><\/a> in 2021 to invest $151 billion in the logic chip and foundry sectors by 2030, the company\u2019s 4nm process node had a yield rate of as low as <\/span>35%<\/span><\/a> as of last year, while TSMC\u2019s 4nm process node reportedly had a yield rate of over 70%.<\/span><\/p>\n The Japanese government\u2019s decision to lift its export restrictions on South Korea might help ROK semiconductor manufacturers improve their production yields. Japan\u2019s restrictions severely limited the export of <\/span>three critical materials<\/span><\/a> necessary for manufacturing semiconductors \u2014 hydrogen fluoride, fluorinated polyimide and photoresist.<\/span><\/p>\n Japan produces about 90% of fluorinated polyimide and photoresist and about 70% of hydrogen fluoride in the global market.<\/span><\/p>\n In response to the export restrictions, ROK semiconductor manufacturers expanded <\/span>localization efforts<\/span><\/a> to secure the materials they imported from Japanese manufacturers. Despite the <\/span>insistence<\/span><\/a> that South Korean companies secured local supply chains, Tokyo\u2019s decision to impose its restrictions regime must have hurt.<\/span><\/p>\n For instance, semiconductor manufacturers use pure hydrogen fluoride to remove excess material from around circuit patterns on silicon wafers. Industry experts <\/span>say<\/span><\/a> that the quality of materials matter because \u201csemiconductor production yield rates are higher when using high-quality materials from Japanese companies.\u201d<\/span><\/p>\n South Korean companies, such as Samsung Electronics and SK Hynix, could thus reclaim the <\/span>market share they lost<\/span><\/a> in the past several years by regaining access to critical Japanese materials.<\/span><\/p>\n