Supply of DRAM, NAND & Displays Could Be Disrupted by Japan & South Korea Disputeby Anton Shilov on July 5, 2019 10:00 AM EST
South Korean companies produce 70% of the world’s DRAM, about a half of 3D NAND, and a significant share of OLED and LCD displays on the planet. Meanwhile, Japanese suppliers make 70% - 90% of three materials crucially required for manufacturing these components. As the two countries have a multi-decade-long dispute over compensation for World War II, Japan recently implemented new export rules that could disrupt supply of the important materials to South Korea, which in turn could hurt supply of DRAM, NAND, and various types of displays.
Japan-based JSR, Showa Denko (SDK), and Shin-Etsu Chemical control 70% - 90% of the global supply of polyimides (used both for LCDs and OLEDs), photoresists, and high-purity hydrogen fluoride (used to make chips, such as LSI, DRAM and NAND devices). Starting July 4, Japanese producers must get approval for individual exports of these chemicals to South Korea. Export reviews may take up to three months, whereas South Korean companies typically only keep one to two months' worth of materials in stock.
If South Korean companies cannot procure enough chemicals from their Japanese partners or their competitors in other countries, they will have to curb production, which will have a drastic effect on global supply of DRAM, 3D NAND, chips by Samsung Foundry, LCDs, and OLEDs.
According to Nikkei and Reuters, SK Hynix only has enough materials to keep production going in the short-term future, or for the next couple of months. Samsung is reportedly trying to deal with the situation, but nothing is clear at this point. Both South Korean giants have manufacturing plants in China, which could partially offset a potential disruption of supplies by domestic fabs. Meanwhile, LG Display and Samsung Display only make their products in South Korea and have to source fluorinated polyamide from Japan (despite the fact that LG controls LG Chem, the largest chemical company in South Korea).
The heart of the conflict itself lies with World War II, where as part of the Japanese occupation of Korea, Japan used forced South Korean labor at many of its factories, with the survivors demanding compensation. Late last year South Korean court ordered Japan’s Nippon Steel & Sumitomo Metal as well as Mitsubishi Heavy Industries to pay compensations to South Korean plaintiffs, verdicts criticized by Japan as ‘unthinkable’ because the issue was settled in 1965.
In addition to new export controls, Japan reportedly plans to exclude South Korea from the whitelist of 27 friendly countries. If this happens, export of all items that can be potentially used for military applications will require appropriate government approvals, which will further slowdown business between the two countries.
Components made in South Korea are then used by various companies across the world, including Apple, Dell, HP, Lenovo, Panasonic, Sony, and so on. As a result, if supply is indeed disrupted, Japanese companies will be hurt too.
- Samsung Samples 32 Gb DDR4 Memory Chips
- SK Hynix to Start Using 2nd Gen 10nm-class DRAM Process Technology in 2H 2019
- Samsung Develops Smaller DDR4 Dies Using 3rd Gen 10nm-Class Process Tech
- Micron’s DRAM Update: More Capacity, Four More 10nm-Class Nodes, EUV, 64 GB DIMMs
Sources: Nikkei Asian Review, Reuters, OLED-Info
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Teckk - Friday, July 5, 2019 - linkJust when you thought RAM prices are finally sane
PeachNCream - Saturday, July 6, 2019 - linkRAM prices are fine if you don't have a system that requires new, off the shelf memory. Everything I have here at home is running DDR3. It's either 1333 or 1600 and you can snag lots of that for almost nothing off eBay or Amazon. You just have to be smart about the computers you own and the things you do with them.
kludj - Friday, July 5, 2019 - linkThank you for writing this; it was well-written and informative, and news not covered by other sites I check.
Your articles are top-tier; "in-the-weeds" tech sites are plagued by sloppy writing, and it's only because it's very clear you care about your writing style that I humbly suggest you be mindful of phrasing indecision. For example, you wrote "the short-term future, or for the next couple of months." While the comma signals your probable intent (that both phrases mean the same, not that they are two separate possible outcomes), it does require readers make an assumption. Even if it did not introduce slight uncertainty, it's an unnecessary redundancy which could be avoided by instead only writing "the next couple months."
Axphxia - Friday, July 5, 2019 - linkAfter WW2 - Germany's efforts at reparations and official apologies to fellow European countries and other countries around the world were viewed sincere enough at least to start the healing process and helped normalize relations. Japan, however, has always been involved in numerous controversies regarding its remedial efforts and attitudes after the war. MOST likely because Japan's current Prime Minister is direct descendant of the Japanese government leadership that were responsible in moving Japan to war in the first place so any apologies issued would mean their ancestors did wrong LOL.
Also, while the tension between South Korea and Japan has always persisted after the war - this trade "war" was primarily instigated by the fact that Japan did not like South Korea government saying "NO" to radiation infected seafood due to Fukushima nuclear plant meltdown that Japan was trying to export to Korea.
Japanese government is not only lying to their own citizens regarding radiation safety after the meltdown, they're trying to lie to the world so that they can hold their "precious" Olympics in Tokyo without embargo.
And yes, war's been over for long time to most of us for decades but there are still survivors that never received proper apology or compensation from Japanese government for forcing them to prostitution and/or forced labor during most of their youth. So - NO - it's not "settled for over 50 years"
Oxford Guy - Saturday, July 6, 2019 - linkThe average person cares more about cheap NAND and RAM than about justice for old people. In fact, the average person cares more about cheap NAND and RAM than about justice for any people, other than those who are closely tied to them somehow.
If justice were so crucial to people then unjust wars wouldn't happen in the first place.
It really does seem, though, that all the stops are being pulled to get RAM and NAND prices sky high. As I recall, it was Japan that raised DRAM through the roof in the 80s when it had gotten US firms out of the action by flooding the market with cheap chips. Rinse, repeat, I suppose.
stanleyipkiss - Friday, July 5, 2019 - linkThis sounds like price collusion if I ever saw it.
PeachNCream - Saturday, July 6, 2019 - linkIts sadly not. My mother is Chinese and ancient old. She's one of many Asians that spout rampant racism about Koreans and Japanese without a second thought and has no reason to since we're all just more random American citizens with as little stake in things that happen in the Far East as anyone else living in the US. Still, it remains at the forefront of her thoughts. That sort of deep distrust over old wounds and wars is more relevant and ever-present with Asians still living in their ancestral home nations. This really is an international spat between governments that has nothing at all to do with price fixing and profit maximization.
jordanclock - Monday, July 8, 2019 - linkYou might be onto something. This could be the biggest price collusion scheme in history. RAM, NAND and display manufacturers knew in 1937 that they would want to drive prices up in 2019. So they met with the Japanese government and convinced them to join the Nazis. After that, it was a simple matter of Japan invading China and Korea, committing horrific atrocities and then spending decades acting like they never happened. The Korean companies knew that with all that in place, in 2018 the Korean government would find Japanese companies guilty of aiding in horrible crimes against their citizens, instate severe fines and a year later, Japan would make exports of vital exports more lengthy and expensive.
Yes. This sounds exactly like price collusion.
Samus - Saturday, July 6, 2019 - linkHey Japan,
Apologize. You done fucked up in WWII. Own it and move on. Korea is your neighbor and friend. Man up bro.
PeachNCream - Saturday, July 6, 2019 - linkSo much this. As for Korea, drop it too and move on. We have bigger fish to fry these days. The past is worth studying lest we forget and repeat our errors, but inventing a dispute over long ago transgressions needs to stop.