According to a report from BusinessKorea, the Korea Trade Association (KITA) announced on September 6 that in the first seven months of 2020, South Korea’s imports of semiconductor devices and integrated circuit manufacturing equipment from Japan totaled US$1.7 billion, an increase of 77.2% over the same period last year. In addition, imports of processors and controllers, and photosensitive semiconductor devices increased by 8.6% and 3.7% respectively.

Although South Korea’s total imports from Japan in the same period fell by about 10% year-on-year, in fact, the semiconductor sector, a pillar industry, still relies heavily on Japan.

Korean media pointed out that this data is related to Samsung's large-scale investment. The company announced in May this year that it will build a NAND flash memory production line in Pyeongtaek City, and plans to start the construction of a wafer plant "P3" in September. The new plant is expected to become Samsung's largest wafer plant in Pyeongtaek.

Furthermore, the new factory requires advanced equipment and manufacturing machinery, but it is difficult for local companies to meet the technical needs of Samsung, SK Hynix and other companies. At present, Samsung Electronics and many other Korean companies still rely on Japanese semiconductor equipment as high as 25.7%, which is almost the same as last year's 27.4%. Even if equipment from other countries is used to reduce dependence on Japan, maintaining the same level of efficiency is by no means easy.

On the other hand, South Korea’s dependence on Japanese semiconductor equipment has directly caused its dependence on Japanese engineers. Usually, new equipment imported from South Korea is installed by Japanese engineers sent by suppliers, which also led to the exemption of self-isolation for Japanese engineers entering South Korea in July this year. Despite violating the principle of reciprocity and risking the spread of the epidemic, the South Korean government cannot ignore the concerns of companies about production interruptions.

It can be said that since Japan imposed trade controls on semiconductor materials in South Korea, the South Korean government and companies have been working hard to improve the competitiveness of the materials, parts and equipment industries, and are also increasing their support for the semiconductor and display industries. But for the time being, self-sufficiency still takes time.