China’s decision to impose export restrictions on gallium and germanium, key materials in semiconductor production, is set to impact the Korean Mini/Micro LED and OLED industries. Although the South Korean government has stated that the short-term impact on supply and demand may be limited, there are concerns about the potential long-term effects of these export controls. The government plans to closely monitor China’s actions and develop countermeasures if necessary.
South Korea’s Response to China’s Export Restrictions
On July 4, the Ministry of Trade, Industry, and Energy of South Korea held an industry supply chain inspection meeting at the Seoul China-Korea Business Association. The meeting, led by Joo Yong-jun, Director of the Industrial Policy Office, was focused on assessing the impact of China’s export restrictions on gallium and germanium on South Korea’s domestic supply chain. Attendees included representatives from semiconductor and display companies, industry associations, material and component suppliers, and equipment industry supply chain centers.
Details of China’s Export Control Measures
On July 3, China’s Ministry of Commerce announced that starting August 1, gallium, germanium, and their compounds would be subject to export restrictions. Exporters will be required to obtain approval from the Ministry of Commerce and provide detailed information about overseas buyers. The Ministry stated that these restrictions are intended to “contribute to national security and protect Chinese national interests.” In some cases, export license reviews may be escalated to the State Council.
Gallium and germanium are crucial materials used in various applications, including computer chips, solar panels, and lasers. According to the European Commission (EC), China accounted for 94% of global gallium production and 90% of germanium production from 2016 to 2020. Bloomberg has suggested that these export restrictions are part of a broader global battle for control over technologies critical for both industrial and military capabilities, which may intensify the strategic competition between China and the United States.
Potential Impact on the Korean Mini/Micro LED Industry
South Korean industry experts believe the short-term impact of the gallium and germanium export controls on the Mini/Micro LED sector will be limited. In the semiconductor field, gallium is primarily used for LED chip development and future semiconductor research, while in the display field, it is a key material for OLED production, where the impact might be more substantial.
However, with other countries like the United States also importing gallium, there are alternative sources and sufficient inventory to prevent immediate supply-demand imbalances. The Korea Resources Corporation reported that current gallium reserves are enough for approximately 40 days and will be expanded if needed. “If there are concerns about supply shortages, we will release reserves promptly,” a representative from the corporation stated.
Diversification and Alternatives for Germanium in Mini/Micro LED
The South Korean government also believes that germanium, which is used in semiconductor processing gases, can be replaced with alternative gases, and import sources can be diversified. However, Joo Yong-jun of the Industrial Policy Office remarked, “The duration of China’s export controls is uncertain, and the range of restricted items may increase. We will closely monitor China’s actions and respond swiftly.”
Future Actions to Protect the Mini/Micro LED Industry
The Ministry of Trade, Industry, and Energy of South Korea has committed to examining the broader impact of these export restrictions on other industries related to Mini/Micro LED, such as optical fibers. Director Joo stated, “To avoid disruptions in major industries like semiconductors and Mini/Micro LED, we will increase reserves and explore alternative sources. We will also strengthen efforts to develop substitute materials and technologies and promote recycling for products that are highly dependent on specific countries.”
Conclusion
As China enforces export restrictions on gallium and germanium, South Korea is prepared to take swift action to protect its Mini/Micro LED and OLED industries. By closely monitoring China’s measures, diversifying supply sources, and developing alternative technologies, South Korea aims to maintain its competitive edge in the global semiconductor and display markets.
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