U.S. tech groups warn Japan and South Korea that trade spat threatens global supply chains

U.S. tech groups warn Japan and South Korea that trade spat threatens global supply chains

SEOUL – U.S. technology companies have urged Japan and South Korea to negotiate a resolution to a dispute that threatens to upend the global supply chain that the world’s top electronics brands rely on make their products.

Five of America’s largest tech industry groups including the Semiconductor Industry Association, which counts Qualcomm Inc. and Intel Corp. among its members, issued a joint letter to economy minister Hiroshige Seko and South Korean trade minister Yoo Myung-hee. They asked both sides to refrain from escalating their conflict, which flared after Japan tightened controls this month on exports to South Korea of three materials vital to the production of chips and cutting-edge screens.

Resurgent tensions between Japan and South Korea threaten to wallop chipmakers from Samsung Electronics Co. to SK Hynix Inc., upsetting a carefully choreographed global supply chain by smothering the production of memory chips and other components vital to widely used devices.

The groups’ letter is well-timed: U.S. national security adviser John Bolton is in Seoul on Wednesday for wide-ranging talks that come on the same day as the end of a public consultation period on whether Japan should exclude South Korea from its so-called white list of trusted export destinations, which are treated as presenting no risk of weapons proliferation.

“Japan and South Korea are important players in these global value chains,” the trade groups, which also include the National Association of Manufacturers, wrote. “Non-transparent and unilateral changes in export control policies can cause supply chain disruptions, delays in shipments, and ultimately long-term harm to the companies that operate within and beyond your borders and the workers they employ.”

South Korean suppliers of key materials for chipmakers have surged since Japan unveiled measures targeting its neighbor, buoyed by hopes that they may win new business from key players including Samsung and SK Hynix.

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