Japan imposes trade restrictions on South Korea for smartphone and chip materials

The Japanese government is also seeking consultation on whether South Korea should be removed from its 'white country list'.
Written by Campbell Kwan, Contributor

Japan on Monday announced trade restrictions that will make it harder for South Korean companies, such as Samsung and LG, to buy manufacturing technology used to make chips and smartphones.

From 4 July, Japanese companies will need to obtain government approval in order to export fluorinated polyimide, resist, or hydrogen fluoride -- materials used to make chips and smartphones -- to South Korean companies.

The Japanese government will also be seeking public consultation on whether South Korea should be removed from its "white country list". Companies operating in countries listed on the "white country list" are able to trade technology in Japan with minimal restrictions. 

"The international export control system is built on the basis of a trust relationship, but from a review by the relevant ministries and agencies, the trust relationship between Japan and Korea has been seriously impaired," the Ministry of Economy, Trade, and Industry said.

See: Japanese government to create and maintain defensive malware  

The decision in Tokyo to enforce the trade restriction follows the G20 leaders over the weekend -- including Japan -- jointly advocating free trade and open markets.

"We strive to realise a free, fair, non-discriminatory, transparent, predictable, and stable trade and investment environment, and to keep our markets open. International trade and investment are important engines of growth, productivity, innovation, job creation, and development," the G20 leaders said in a joint declaration [PDF] over the weekend. 

In May, the Japanese government also tightened its rules for foreign investors that are looking to buy into domestic tech companies. The new rules, set to be effective in August, will add 20 industries onto an approval list where foreign investors are required to gain approval from the Japanese government if they purchase more than 10% of a Japanese company operating within those industries.

"With the increased importance of securing cybersecurity in recent years, we have decided to take the necessary steps to prevent situations that would severely affect Japan's national security, including the addition of the integrated circuit manufacturing industry to the industries that require prior notification based on Japanese foreign exchange and trade law," various Japanese ministries said in a joint statement at the time. 

ZDNet has reached out to Samsung for comment.

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