Trade dispute between Japan and South Korean could hit DRAM, NAND and display supply

DRAM and NAND pricing is pretty low these days but a trade dispute between Japan and South Korea could change that. AnandTech reports Japan recently implemented new export rules that could (temporarily) cut off South Korea from important chemicals that are used in the production of DRAM and NAND memory, as well as LCD and OLED displays. Given that South Korea manufactures 70 percent of world's DRAM, about half of 3D NAND memory chips, and a significant portion of display panels, the conflict could have a major impact on the computer and electronics markets:

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.

The new export rules are linked to a decades-old conflict over World War II compensation. Last year, a South Korean court ordered Japan’s Nippon Steel & Sumitomo Metal as well as Mitsubishi Heavy Industries to pay compensation to victims of the Japanese occupation of Korea, but Japan says this is "unthinkable", arguing the case was settled in 1965.