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Key materials secured by Samsung Electronics

July 15,2019
Samsung Electronics Vice Chairman Lee Jae-yong secured emergency stockpiles of three key high-tech materials subject to Tokyo’s export restrictions against Korea during his recent trip to Japan, sources said Sunday.

Sharing the results of his trip, Lee told top Samsung executives during a special meeting Saturday that he secured enough fluorinated polyimides, photoresists and hydrogen fluoride to avoid disruptions in production, according to sources.

On July 4, Japan imposed restrictions on exports to Korea of the three key materials, which are used in semiconductors and displays, in apparent retaliation in connection with a diplomatic row over Japan’s wartime forced labor.

“With Lee’s quick response, Samsung apparently got a breather on the situation related to the three key materials,” a source familiar with the matter said.

“It appears to have taken care of the most urgent matter.”

Although it is not known how Samsung was able to get the materials, or how much it can acquire, sources said it will be enough to prevent immediate operational problems at its production facilities.

Industry insiders speculate that the materials Samsung secured will not be direct imports from Japanese companies, since they will be regulated by the Tokyo government.

Lee returned home Friday following his six-day visit to Japan, where he reportedly met Japanese officials to find solutions to Tokyo’s export regulations. The electronics company had sent some of its employees hurriedly to China and Taiwan to secure new parts suppliers when the restriction was announced.

Before the news of Lee securing volumes of the three key materials, Samsung was expected to face difficulties in fulfilling foundry contracts with U.S. companies like IBM, Qualcomm and NVidia due to Tokyo’s export restrictions. It may not have been able to fill the orders if there were any delays in supply.

Samsung aimed to become the world’s No. 1 in the non-memory chip market by 2030 by investing 133 trillion won ($113 billion) in its semiconductor business. The company’s success was crucial for the Korean government’s goal to lead the global foundry business market with a market share of 35 percent by 2030.

At a special meeting with top executives from the company’s device solutions division and display making units Saturday, Lee told the executives to prepare contingency plans, adding that Samsung needs to be ready for the possible expansion of export restrictions.

“Although Samsung has secured quite an amount of materials this time, it isn’t an ultimate solution to the problem,” an industry source said. “Since Japan’s trade restrictions can expand in the future, Lee reportedly ordered the affiliates to prepare contingency plans.”

BY KO JUN-TAE, YONHAP [ko.juntae@joongang.co.kr]