Stks of Korean chip makers gain, Japanese material vendors lose on export curbs

2019.07.15 14:38:46 | 2019.07.15 14:39:16

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The row over historic issues spilling over to the economic front has been denting shares of Japanese high-tech material vendors as they could lose one of their biggest and most reliable clients – chipmakers in Korea.

Japanese high-tech materials companies have largely remained weak in their stock price since July 1 when the Japanese government announced its export curbs on the three key materials – fluorinated polyimide, photoresists and hydrogen fluoride (or etching gas) that are vital in semiconductor and display production.

Japanese fluorine compounds producer Stella Chemifa saw its stock price down 4.6 percent in the period to July 12. Photoresist producer JSR experienced a 3.4 percent fall in the same period, with Shin-Etsu Chemical down 2.9 percent. Shares of Sumitomo Chemical, which produces fluorinated polyimide and hydrogen fluoride, also fell 1.4 percent in the same period.

Samsung Electronics and SK Hynix are their largest customers, and worries are growing that the Japanese suppliers could be hit hard if the two Korean companies switch to other suppliers or localize necessary materials.

Shares of Korean semiconductor companies gained as supply control on fear of disruption in production at the two chipmakers responsible for more than 70 percent of DRAM chips around the world could turn DRAM prices to strengthen. Japan supplies around 90 percent of Korean demand for photoresist and fluorinated polyimide and 44 percent of etching gas.

Samsung Electronics lost 1.5 percent in early days of July, but rebounded last week for four days in a row. Shares of SK Hynix also rose 7.5 percent in the same period.

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Market concerns were eased as foreign investors’ net buying into Samsung Electronics and SK Hynix reached 634.7 billion won ($538.1 million) and 267 billion won, respectively. Some believe Japan’s export restrictions will only resolve excessive inventory in the two memory chip makers and help lift the chip prices. The spot price of dynamic random access memory (DRAM) chips rebounded in 10 months, hitting $3.1 on July 11.

Shares of Korean semiconductor materials producers also climbed significantly on expectations that they could gain growth momentum in case the government and their major customers go all out to foster the growth of the country’s high-tech materials industry in response to Japan’s export curbs.

Foosung, a Korean producer of hydrogen fluoride, saw its stock price up 25 percent this month, while photoresist manufacturer Dongjin Semichem surged 34.8 percent.

By Yoo Joon-ho and Minu Kim

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]