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The 80s are calling

July 19,2019
이미지뷰
President Moon Jae-in presides over a meeting Monday with his senior secretaries in the Blue House to deal with Japan’s export restrictions. [YONHAP]
LEE SO-A
The author is an industrial 2 team reporter of the JoongAng Ilbo.

There is no sign of the Korea-Japan discord over Japan’s export ban subsiding. Some politicians see parallels with the Donghak Peasant Revolution during the Joseon Dynasty (1392-1910) in the late 19th century and the National Debt Repayment Movement in the 20th century. The current situation is as much the same in terms of the way Korea and Japan are clashing, but what sets it apart is the fact that high-tech industry is at the center of the row, and Korea is not a weak country losing sovereignty.

So, the U.S.-Japan semiconductor dispute in the 1980s may offer a more helpful history lesson. Having emerged as the sole superpower after World War II, the United States imposed strong trade pressure on Japan when Japanese companies like Hitachi and Toshiba grew to the point of threatening U.S. companies in the 80s. The 1985 Plaza Accord, which dramatically increased the value of yen, and the U.S.-Japan Semiconductor Agreement in the following year, which forced Japan to import U.S.-made semiconductors, were notable cases. The discord between the two countries ended in 1996 as the demand for computers increased and U.S. semiconductor industry recovered. This recent history offers three lessons.

First, Japan’s recent trade restrictions are evidence that it considers Korea’s semiconductor industry a threat, just as the United States regarded Japan’s in the 1980s. Semiconductors are a core technology of the fourth industrial revolution. As the prolonged U.S.-China trade war is basically over the hegemony of latest technologies, there is no guarantee that not just Japan but also the United States may target Korean semiconductors.

Second, while Japan’s semiconductors were checked by the United States, Samsung Electronics emerged as a new leader in the dynamic random access memory (DRAM) sector. We need to be wary that China’s may be aiming to take Korea’s place.

Third, Japan’s semiconductor industry shrank after it lost to the United States in the dispute in the 80s. But Japanese industry did not give up. It pushed technological advancement to secure many patents and competitiveness in the sector of materials used for semiconductor production. The upcoming technology war is likely to be a prolonged battle where we cannot predict who we are fighting against. The government must seek effective diplomacy and policy while companies should review their global collaboration and strategies to overcome the crisis.

JoongAng Ilbo, July 17, Page 31