Is it another power conflict?
South Korea tech giant Samsung, may not hit Galaxy S10 5G productions and sales targets as planned. The news comes after a feud between Japan and South Korea.
Japan has barred the export of three raw materials used in Smartphone chip making to South Korea.
The two countries have always had a dispute over Japan’s use of forced labor back in World War 11.
With a Seoul court ordering a Japanese company to compensate forced labor workers, Japan feels that South Korea lacked control over their relations. And it should have responded differently to the court order.
Now, Japan has made it mandatory for companies intending to export the chemicals to seek a permit. Japan cites weak international trade controls by the South Korea government. But, it is clear, the escalated row is the cause of the dispute.
South Korea, on the other hand, has tried to seek an amicable resolution of the dispute, but Japan is adamant; thus, Korea is frustrated over the lengthy process of export permits.
In a recent press briefing, when South Korean diplomats met with their counterparts in the Japanese ministry of trade, the two sides could not greet each other, yet they were in front of media.
The row is now public with the South Koreans turning to social media under the hashtag #BoycottJapan to support shunning of Japanese products.
There is an extensive campaign in South Korea of people and companies urging each other to buy local alternatives to Japanese products. In another move, the South Korean president of the Koreans Supermarkets Alliance; Mr. Lim Won-bae, said the supermarkets under the alliance would stop stocking Japanese products.
The two countries control the Chip market, with Japan, the leader in the manufacture of chip-making materials while South Korea is a leader in chip making. Through Samsung and SK Hynix, South Korea supplies world renowned tech giants such as Apple, Huawei, and Amazon with chips.
Currently, South Korea has sufficient stocks of chip materials to run for about three months, but if Japan fails to negotiate, prices in chips could increase drastically, leading to an upsurge in smartphone prices.
And with the recent launch of Galaxy S10 5G, Samsung may fail to hit revenue targets because of the delayed rollout of 5G technology essential for the functioning of the new phone model.
LG, another tech giant, has opted to seek alternative manufacturing of the raw materials as the result of the feud.
The intertwining of politics and business between the two nations is has been termed outrageous and will likely lead to massive financial loss to affected companies.