South Korea eases path for quality tests of chip suppliers amid Japan curbs: government

[July 22, 2019]    By Joyce Lee and Ju-min Park

SEOUL (Reuters) - South Korean chipmakers such as Samsung Electronics will allow their equipment to be used for conducting quality tests at their domestic suppliers as part of an arrangement brokered by the government to counter Japan's export curbs.

 The logo of Samsung Electronics is seen at its office building in Seoul, South Korea, July 4, 2017. REUTERS/Kim Hong-Ji/File Photo

South Korea's government has vowed to nurture homegrown suppliers for Samsung and SK Hynix after Japan said earlier this month it would tighten curbs on exports of high-tech materials used in smartphone displays and chips to South Korea.

"Chipmakers, their clients, don't have incentives to offer local suppliers equipment for their performance tests, but now is an emergency situation, so we convinced their client companies to provide such opportunities," said a government official with direct knowledge of the matter.

Suppliers whose products are near completion would benefit from utilizing their client's equipment for quality tests, so that they can hit the market quicker, the official added.

"Normally, if you have a material or an equipment for chip making, you bring it to a Belgium semiconductor research institute called IMEC for test bed. It costs a lot and takes more than nine months to finish development before selling it," the official noted.

Samsung and Hynix were not immediately available for comment.

Another official said such a plan would be part of the government's short-term policy to fight the Japanese export curbs, although it is up to major chipmakers decision to use local products or not.

Following Tokyo's restrictions, officials say the South Korean government aims to disclose detailed plans later this month to support the country's semiconductor industry.

The country's ruling party has said it will include up to $255 million in an extra budget focused on supporting mass production of items which the country has relied on imports from Japan, especially in the chip sector.

(Reporting by Joyce Lee; Writing by Ju-min Park; Editing by Muralikumar Anantharaman)

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