The chipmaking business is one of Samsung’s most valuable businesses. It has been a major cash cow for the company, . However, the business has come under threat due to the . Japan has imposed strict export controls on materials that are crucial for the chip business. Since Samsung imported the bulk of those materials from Japan, it’s now feeling the pinch of these restrictions.
Japanese companies can still export the materials to South Korean companies but they will require a license from the government. The if they’re approved. So Samsung has no option to look elsewhere if it wants to sustain production.
Samsung forced to look elsewhere for crucial materials
Nikkei that Samsung is now testing hydrogen fluoride etching gas from companies outside Japan. The company has sent senior officials to China and Taiwan to look for alternative suppliers. It’s also leaning on South Korean companies to help fill the gap.
Hydrogen fluoride is needed to remove the excess material around circuit patterns on silicon wafers. The gas needs to be 99.999% pure for it to be used in chipmaking. Japanese companies are global leaders in developing technology that can reach this level of purity and hence control up to 90 percent of the market.
It will reportedly take up to three months for Samsung to ascertain if existing quality levels can be maintained if the etching gas is sourced from non-Japanese companies. This may also lead to a broader effort by South Korea’s chip industry to reduce its reliance on Japanese materials. There have been reports that Samsung is slowing down the production of some chips so as to manage its remaining inventory of these crucial materials.
Some even suggest that this will cause . It’s unclear how much inventory Samsung currently has and what it would do if it were to end and the imports from Japan were to be restricted completely. Hopefully, it will not come to that.
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Japanese companies can still export the materials to South Korean companies but they will require a license from the government. The if they’re approved. So Samsung has no option to look elsewhere if it wants to sustain production.
Samsung forced to look elsewhere for crucial materials
Nikkei that Samsung is now testing hydrogen fluoride etching gas from companies outside Japan. The company has sent senior officials to China and Taiwan to look for alternative suppliers. It’s also leaning on South Korean companies to help fill the gap.
Hydrogen fluoride is needed to remove the excess material around circuit patterns on silicon wafers. The gas needs to be 99.999% pure for it to be used in chipmaking. Japanese companies are global leaders in developing technology that can reach this level of purity and hence control up to 90 percent of the market.
It will reportedly take up to three months for Samsung to ascertain if existing quality levels can be maintained if the etching gas is sourced from non-Japanese companies. This may also lead to a broader effort by South Korea’s chip industry to reduce its reliance on Japanese materials. There have been reports that Samsung is slowing down the production of some chips so as to manage its remaining inventory of these crucial materials.
Some even suggest that this will cause . It’s unclear how much inventory Samsung currently has and what it would do if it were to end and the imports from Japan were to be restricted completely. Hopefully, it will not come to that.
The post appeared first on .