August 05, 2019 12:29
China has begun taking advantage of an escalating spat between Korea and Japan now Korean manufacturers are faced with a halt in supplies of key components.
China's largest display maker BOE hopes to supply OLED panels to Apple to replace Samsung Display in the event of a shortage due to curbs on materials from Japan.
Chinese semiconductor makers are also moving quickly. Fujian Jinhua Integrated Circuit, which makes DRAM chips, recently began recruiting engineers who have been working for Samsung and SK Hynix for more than 10 years. The aim is to get them to develop nano-fabrication technologies.
And Chinese chipmaker Tsinghua Unigroup recently formed a DRAM division, while TSMC of Taiwan announced last month that it is hiring around 3,000 research and development workers. That is the biggest recruitment drive in TSMC's history.
Meanwhile Korean chipmakers have halted new investments as global prices drop. SK Hynix said it is postponing capacity expansion at its factory in Cheongju, North Chungcheong Province and delay the procurement of new machinery at its plant in Icheon, Gyeonggi Province.
Korean manufacturers of batteries and materials for electric cars fear their Chinese rivals may take advantage of the Korea-Japan row. China's CATL, which is the world's largest manufacturer of EV batteries, could widen its lead if Korea's LG Chem and SK Innovation fail to import Japanese battery pouch film, a key component in making EV batteries.
CATL already supplies EV batteries not only to Chinese automakers but to BMW and Volkswagen. One industry insider here said, "There is no technological gap between Korean and Chinese companies when it comes to batteries. If we run into problems securing materials, automakers are highly likely to turn to Chinese suppliers."
Samsung and SK Hynix are already testing hydrogen fluoride produced by Korean and Chinese manufacturers. Industry watchers fear both Korea and Japan will suffer if the dispute continues.
Japan's Nikkei Business Review said last week said the trade war could lead to totally unwanted consequences for both sides. "Both sides will… settle in for an extended battle which will make them both losers," the newspaper said quoting Karl Friedhoff at the Chicago Council on Global Affairs.
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