The Japanese government announced yesterday that it will restrict the export of "fluorinated polyimide", "photoresist" and "high-purity hydrogen fluoride" to Korea from July 4. According to sources, Japan’s move is a retaliatory measure against the 2018 Korean workers’ compensation lawsuit.

According to data released by the Ministry of Economy, Trade and Industry, the materials that will strengthen export control to Korea are mainly: high-purity hydrogen fluoride required for "cleaning" in the semiconductor manufacturing process, and sensitizer "light" coated on a semiconductor substrate. "Glued", fluorinated polyimide used in the manufacture of TV and smartphone display panels, all of which are key materials required for display panels (OLEDs, etc.) and semiconductor chip manufacturing processes.

Japan accounts for 90% of the total production of fluoropolyimide and photoresist in the world, and 70% of the hydrogen fluoride in global semiconductor companies needs to be imported from Japan. Most of the fluoropolyimide and high-purity hydrogen fluoride required by Samsung Electronics, LG and SK in Korea are imported from Japan. If South Korea cannot find a replacement importing country in time, it will have a major impact on the Korean display and the semiconductor industry.

Securities analysts believe that if Japan's export restrictions on South Korea continue, it is bound to have a negative impact on the production of Korean manufacturers' related products. From the perspective of the Korean semiconductor industry, the most influential are OLED, memory chips, and CIS chip industries. South Korea's OLED technology is the world's leading, accounting for more than 70% of global production capacity.

Chinese panel makers have become a major force in the industry. If Korean manufacturers reduce production or supply is not timely, Chinese manufacturers are expected to benefit from this event with their ever-increasing technical strength and product quality.