BUSINESS

Samsung heir Lee Jae-yong flies to Tokyo to seek support from Japanese suppliers

By Song Su-hyun

Korea presses Japan to lift export restrictions, vows to stick to rules

  • Published : Jul 8, 2019 - 17:43
  • Updated : Jul 10, 2019 - 22:25

As South Korea continued to weigh its move against Japanese controls on exports of key materials to domestic tech companies, Samsung Electronics Vice Chairman Lee Jae-yong flew to Tokyo late Sunday to meet with his counterparts.

Finding himself a de-facto channel for Korean industry, and possibly even the government, to relay Seoul’s stance and seek alternatives, Lee is likely to contact Sumimoto Chemical Chairman Hiromasa Yonekura, Mitsubishi Trading CEO Hironobu Abe and Ushio Group Chairman Jiro Ushio, who have close ties with Samsung in the semiconductor business, according to some news reports.

The Mitsubishi CEO is an older brother of Japanese Prime Minister Shinzo Abe, while the Ushio chairman is Abe's brother’s father-in-law.

Samsung declined to confirm Lee’s schedule in Japan.

“It is speculated that the vice chairman would ask for support from major suppliers in order to prevent possible delays in material procurement,” said an industry official.



(Yonhap)
However, the likelihood of Lee coming back with a breakthrough that could resolve the current dispute seems low, according to industry sources.  

“There is not much Lee can do in this case, and it doesn’t seem right that the Samsung heir interferes in a diplomatic issue involving the two governments,” an official said.  

On Monday, the Japanese government announced it would scrutinize exports of fluorinated polyimide, photoresists and etching gas, which are essential for manufacturing semiconductors and display panels, to Korean companies.

Fluorinated polyimide is an essential material in making foldable smartphones like the Samsung Galaxy Fold. 

Some news reports said Korean chipmakers Samsung and SK hynix are likely to run out of their stores of the key materials in the next few weeks, raising concerns about the trade conflict sparked by a diplomatic dispute between the two countries. 

(Yonhap)

Meanwhile, Korea has reiterated that it will take steps to deal firmly with the Japanese export restrictions.

Speaking publicly on the issue for the first time, President Moon Jae-in said in a meeting with aides on Monday that Japan should withdraw its export control, calling it an attempt to limit trade for political purposes.

Saying his administration would first make “calm” efforts for a diplomatic resolution, Moon warned that if Korean companies face actual damages the government will be left with no other choice but to take “necessary” measures in response.

“(I) call on the Japanese side to retract the measure and seek sincere consultations between the two countries,” he said.

Also on Monday, Korea’s top economic policymaker said Japan should withdraw the latest restrictions on exports of chipmaking materials to Korean companies, citing international rules of trade and impact on the global economy.

“Japan should lift the export restrictions,” said Hong Nam-ki, deputy prime minister for economy, during a ministerial meeting on economic affairs. “The Japanese export restrictions run against the World Trade Organization’s rules of agreement, which could have a negative impact not only on Korean companies but also Japanese companies and further on the global economy.”

The Korean government pledged to closely work with the international community to deal with the issue, while focusing efforts on minimizing the impact on Korean businesses. 

At noon on Sunday, Hong and Kim Sang-jo, policy chief of staff at Cheong Wa Dae, reportedly met with SK Group Chairman Chey Tae-won, Hyundai Motor Group Senior Vice Chairman Chung Euisun and LG Group Chairman Koo Kwang-mo to discuss measures to reduce the unfavorable impact on industries.  

It’s not been confirmed whether Samsung heir Lee took part in the Sunday meeting with government officials. 

However, he met some of them last week and his latest trip to Japan seems to reflect Korea’s stance on the latest trade dispute. 

(song@heraldcorp.com)


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