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South Korea eyes investing $1.2b annually in chip supply chain after Japan’s export curbs

South Korea will seek to invest 1 tr won ($854.41m) annually in developing home-grown materials and equipment used to produce micro-chips, a senior ruling party lawmaker said, after Japan tightened curbs on exports of some high-tech materials to the country.

Japan said it would tighten regulations on exports of materials used in smartphone displays and chips to South Korea amid a widening dispute over South Koreans who were forced to work for Japanese firms during World War Two.

The export curbs could hamper production of South Korea’s chip giants Samsung Electronics and SK Hynix as the two chemicals targeted are essential, analysts say. Data firm IHS Markit said the Japanese trade restrictions against South Korea would add to global trade tensions. Asian exporters are already being strained by a prolonged slowdown in the global electronics sectors.

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