The Japanese government implemented export restrictions targeting South Korea on July 4, 2019. Since then, South Korean companies have successfully reduced their dependence on industrial materials, components and equipment imported from Japan.

The Ministry of Trade, Industry and Energy announced on June 28 that South Korea’s annual hydrogen fluoride imports from Japan dropped from US$66.86 million to US$9.38 million from 2018 to 2020. Last year, the imports were less than US$10 million for the first time in 17 years. In addition, the ratio of hydrogen fluoride imports from Japan to the total hydrogen fluoride imports dropped from 32.2 percent to 12.8 percent last year.

Such rapid decreases are because South Korean companies have successfully increased their production and diversified their supply sources. For instance, SoulBrain has doubled its 12N hydrofluoric acid solution production volume and SK Materials is manufacturing 5N hydrogen fluoride gas products.

The same trend is ongoing with regard to the other two restricted items, that is, EUV photoresist and fluorinated polyimide. The South Korean government has attracted investments from DuPont and TOK for domestic EUV photoresist production and one South Korean company is currently testing its prototypes. Kolon Industries and SKC are currently capable of producing fluorinated polyimide.

The government’s R&D investment for those sectors’ growth is bearing fruit as well. Immediately after the restrictions, the government came up with competitiveness enhancement plans along with an R&D investment of 248.5 billion won. According to the ministry, a total of 271 patent applications were made in the sectors from August 2019 to February this year.

The government is planning to invest seven trillion won by 2022 in order to develop advanced material, component and equipment technologies. In addition, joint R&D projects with global industry leaders are being planned along with a dedicated fund of one trillion won.