Samsung, SK vow to join state drive to cut reliance on Japan

President Moon Jae-in, center, asks SK Group Chairman Chey Tae-won, right, about how the group's chip-making arm SK hynix procures hydrogen fluoride from its local partners during Moon's visit to the company's headquarters in Icheon, Gyeonggi Province, Thursday. / Yonhap

By Baek Byung-yeul, Do Je-hae

Samsung and SK have renewed their promises to actively assist President Moon Jae-in's economic team in its ongoing efforts to cut Korean companies heavy reliance on Japan for industrial materials and equipment crucial to their finished products.

President Moon visited SK hynix's DRAM cluster in Icheon, Gyeonggi Province, Thursday, to check on progress in the production of core industrial parts.

Japan formally removed South Korea from its so-called "white-list" of countries that benefit from limited export screening procedures in August 2019. This followed Tokyo placing restrictions on the export of key source materials to Korean firms manufacturing semiconductors and flat panels

The Japanese decision was denounced by Korea as a retaliatory trade measure against rulings by the Korean Supreme Court that ordered Japanese companies to compensate victims of forced wartime labor during Japan's occupation of the Korean Peninsula.

After the moves by Tokyo, Moon asked government agencies to actively work together to help smaller companies here develop the "core industrial parts and materials" that Korea's conglomerates relied upon. Samsung and SK were also quick to respond to Cheong Wa Dae's request by investing more in their local suppliers.

President Moon was initially confident that Japan's measures were politically-motivated and therefore negotiable. However, despite bilateral summits, no substantial progress was made with Tokyo standing fast on its export controls.

Chairman Chey Tae-won and chief executives of local parts suppliers showed Moon around the SK factory. Participants all agreed the government's policy "has worked well" as a lot of companies have successfully begun mass-producing the high-tech resource materials and equipment.

"As part of SK's effort to join the government's move to foster local parts companies, we came up with an idea to share our infrastructure with local firms so that they could accelerate their research and development activities using our facilities," Chey told Moon, according to Cheong Wa Dae press pool reports.

"By making our facilities more accessible to local companies, we will try to create a unified semiconductor ecosystem. Also we will try to share core technologies used in the manufacturing of secondary batteries," Chey added.

He stressed the staunch cooperation between large conglomerates and suppliers will become the driving force to overcome the problems faced because of Japan's export restrictions and the economic slump caused by the virus pandemic.

The President stressed Korea will walk a "different road from Japan," noting that Seoul has successfully overcome the export controls. "By turning the crisis into an opportunity, we will leap forward to become a powerful nation in the materials, parts and equipment sectors," he told the participants.

Additionally, Moon unveiled a plan to make the country a "global factory for high-tech industries" with the government providing tax benefits to companies in these areas, increasing funding for technology development, and attracting manufacturing and research centers from prominent international companies.

"Taking a step away from the defensive approach we took based on our accomplishments, we will now shift to a policy centering on advancement," Moon said.

On a related note, Samsung Electronics also recently initiated moves to improve competitiveness and self-sufficiency in the semiconductor industry by strengthening its collaboration with domestic chip-related companies and research institutions.

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