The Reasons Why Japan Curbed These Three Particular Semiconductor Materials To Hit South Korea(2)
Why does Japan have predominance in the field of materials?
The global semiconductor industry chain has been highly international, but Japan still plays an arguably important role in the supply chain, especially in the field of materials.
“Japan's leading position in the field of equipment and materials today benefits from its all-round predominance in the semiconductor field earlier. At present, the United States and Japan are the two leading countries when it comes to semiconductor device materials, for they have always been the leaders in the semiconductor industry. Meanwhile, a number of South Korean prominent semiconductor device companies have also emerged, thanks to the great progress in semiconductors made by Samsung, SK Hynix and other Korea-based companies," Song said.
Japanese companies have mastered a wide variety of technologies and techniques in the field of materials. For example, when hydrogen fluoride is used to make resin, its impurity level simply needs to be controlled below 0.001, but when it is used to manufacture semiconductors, its impurity level needs to be controlled at a level below 0.0001, thus calling for a special technique for the removal of impurities.
On top of that, hydrogen fluoride’s high toxicity and strong causticity require an extreme high level of security of the related semiconductor devices. When interviewed by Nihon Keizai Shinbun, a professor in Shibaura Institute of Technology said that it asks for devices that are made from special alloys. Japan has been engaged in semiconductor manufacturing since the 1970s. Every Japanese company now has their own techniques.
In addition, Mr. Ikeda of Citi Orient Securities also remarked that products like photoresists are fully customized products for semiconductor manufacturers. Therefore, the constituents and structures of these products need to match up with the production lines and they should be made in accordance with the production lines. In this way, Japanese companies are enabled to exert their power to the greatest extent. It means that a number of materials made by the Japanese companies are irreplaceable and highly profitable.
Is it a chance for Chinese companies?
Nihon Keizai Shinbun reported that Mainland China and Taiwan also manufacture hydrogen fluoride. In fact, Sunlit Chemicals in Taiwan has been supplying materials to some Korean companies since last year. Compared with Taiwanese companies, Mainland Chinese companies seem to act relatively more prudently. The head of marketing in GRANDIT, a company that has been providing hydrogen fluoride for the semiconductor industry since 2009, also stated that it still takes a large amount of time for Chinese manufacturers to catch up with their Korean counterparts in terms of product quality. Till now, given the competence of Chinese companies, their products still cannot completely take place of the ones made by Japanese companies. BEFAR Group said that the company is now negotiating with several Korean companies but has not yet signed any official contract with them.
In regard to photoresists, Song believed that Beijing Kempur is the leading company in the current domestic integrated circuit market of China. Other photoresists companies are primarily engaged in fields of packaging and panel, Kunshan Eson for example. Rusemic, making a significant breakthrough in its third generation of compound semiconductors and 5G communication chips by using photoresists, is now making effort to develop advanced electron beam photoresists.
He added that Japan’s export restrictions on South Korea for semiconductor materials have an impact on not only the semiconductor industry itself, but also the entire globalization of semiconductors. Every economically developed country will take precautions, striving to improve the links within their domestic industries.
“If Japan continues to impose stringent embargoes and sanctions on South Korea, the whole South Korean semiconductor industry may be confronted with the danger of halting production. What’s worse, even if both sides resolve the dispute between them and reach a settlement eventually, the mutual trust lost can hardly be restored. As a consequence, every South Korean company is expected to diversify their supply chains to help mitigate risks, and even if the alternative companies are not powerful enough for the time being, they will get the support from companies such as Samsung and SK Hynix and develop,” Song said.
Nihon Keizai Shinbun also agreed that if Japan-South Korea issues are not resolved in the long run, Japan might lose its position as the supplier of semiconductor materials.