Baek Byung-yeul is a journalist at The Korea Times focused on cultural content, including films and cultural events in South Korea. You can contact him at baekby@koreatimes.co.kr to share your insights.
After election, SKC to mass-produce Japan-reliant key chip-making parts
An SKC employee inspects a prototype of blank mask, a core material for semiconductor manufacturing. / Courtesy of SKC
By Baek Byung-yeul
By Baek Byung-yeul, Kim Yoo-chul
A few days after the landslide election victory for the ruling Democratic Party of Korea (DPK), the government said SKC is set to mass-produce mask blanks, a component needed for semiconductor manufacture.
The announcement came while Japanese Prime Minister Shinzo Abe's approval rating continued to fall for his dithering response to COVID-19.
“SKC is ready to mass-produce mask blanks, an essential material for the semiconductor manufacturing process and one of the materials of which Korea is heavily dependent on Japanese makers,” the Ministry of Trade, Industry and Energy said. Regarding the specifics of the timing, SKC said, “We will start to mass-produce mask blanks in the second half of 2020.”
SK Group's components affiliate has been testing a prototype of its high-end mask blank products with a local semiconductor company. Since 2018, the company has invested 43 billion won ($35 million) to build a new mask blank production plant and completed construction at the end of 2019.
The announcement came a few days after President Moon Jae-in's ruling DPK won a sweeping victory in the crucial nationwide general election. Right after the results, a senior presidential aide said Cheong Wa Dae and the government plan to prioritize various economic agendas to regain economic momentum after the virus-hit economic crisis.
Cheong Wa Dae officials said South Korea will explore ways to overcome the coronavirus like it overcame Japan's export restrictions. Tokyo removed Seoul last year from its list of preferred trading partners. From that standpoint, developing the capability to mass-produce mask blanks may give Seoul an upper hand in resetting its diplomatic policy toward Tokyo over the latter's trade retaliatory measures.
The DPK's landslide victory is helping Moon get away from any worries of “lame duck status” and move forward with his agenda to facilitate a rapid economic rebound offering financial assistance to South Korean component manufacturers that produce materials crucial to the country's manufacturing industries.
SK Group is actively responding to such initiatives. Lee Yong-sun, chief operating officer of SKC, also expressed the company's gratitude to the government as the government advanced the licensing process for a newly built plant and applied the tariff quota system for imported equipment.
Cheong Seung-il, vice industry minister, made his visit to SKC's mask blank manufacturing plant in Cheonan, South Chungcheong Province, and praised the hard work of the company's employees. The industry ministry said SKC, a chemical unit of SK Group, is at the forefront of the government's agenda to reduce reliance on Japanese suppliers.
“It is important for the government and domestic companies to closely cooperate with each other to improve the technological capability of the high-tech materials, parts and equipment sectors and build a healthy industrial ecosystem,” Cheong said, adding the government will inject more than 210 billion won ($172 million) to companies in the materials, parts and equipment fields.
Mask blanks are a core material used to engrave electronic circuit patterns on semiconductor wafers. The material is among the top 20 tech materials that Korea is heavily reliant on Japanese companies for, as Korean chip makers depend on the country for more than 90 percent of their mask blanks.
Korea-Japan relations have been deteriorating over the last two years with no clear resolution in sight. Japan was still demanding South Korea drop its Supreme Court ruling that ordered Japanese companies to compensate surviving South Korean victims of wartime forced labor. South Korea said it won't accept the request claiming the court ruling is a matter of sovereignty and jurisdiction.
Meanwhile, Japan's recent adoption of a temporary 14-day self-quarantine period for people flying in from South Korea and China, as well as the suspension of its visa waiver program, prompted Seoul to suspend its visa-free entry program. The leaders of the countries have taken a rather conciliatory tone toward each other with both of them agreeing to resolve the conflicts via dialogue. But no substantial progress has been made.
Also, the Japanese public has been losing patience with its government's handling of COVID-19, threatening Prime Minister Abe's grip on state affairs. Over 80 percent of people responding to a recent survey released by Kyodo News, Monday, said the government's declaration of a state of emergency in the nation's key cities on April 7 came “too late.”
“With the election win, Moon's approval rating is soaring and this will provide a fresh impetus to possibly restore souring ties with Japan. By supporting efforts by a domestic company to produce materials that South Korea relies on Japan for, the South Korean government may seek a real exit strategy on the Japan issue,” a former Cheong Wa Dae aide said by telephone, adding Moon doesn't need Japan to improve his approval rating.