A new electronics-related trade standoff between Japan and South Korea has fed new fears of a possible shakeup in the tech supply chain involving semiconductors and computer displays that fuel the global technology boom, according to reports by Bloomberg. This adds to industry tremors surrounding trade tensions between the U.S. and China, and centering on telecom equipment.
Japan and South Korea—engaged in a lingering dispute that originates from Japan’s colonial rule over Korea between 1910 and 1945—are considering a meeting in Tokyo on July 12. Japan’s trade restrictions on electronics materials to South Korea arrive amid reported claims that South Korea has diverted some imported materials to North Korea—allegations that South Korea denies.
The new curbs on South Korea are not a ban as of yet, but red tape slows the free flow of necessary components for Korean companies such as Samsung and LG Display Company. Japan is considering taking South Korea off its list of trusted export markets. If the dispute between the two countries is not rectified, South Korea may have to rely on supplies from China, and Japanese manufacturers will have to shift their production locations.
Tokyo has contended that South Korea sparked tensions between the two countries last year, when a court decision ruled that Japanese firms must pay reparations to Koreans forced to work in Japanese factories and mines during World War II.
