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Korea chipmakers: ‘Impact of sanctions limited in short term’

Korea chipmakers: ‘Impact of sanctions limited in short term’

Posted February. 26, 2022 07:40,   

Updated February. 26, 2022 07:40


As the U.S. has decided to impose export restrictions to Russia following its invasion into Ukraine, Korean companies will likely be affected to some extent. As global financial uncertainties mount while raw materials prices are soaring, Korean exporters and importers feel a growing sense of tension.

According to industry sources on Friday, Korean semiconductor companies including Samsung Electronics and SK Hynix expect new sanctions will not have significant short-term impact as Russia only accounts for 1.6 percent of Korea’s chip export. It is estimated that Russia is consuming less than 0.1 percent of the global chip supply. “Since there are not many factories that require semiconductors in Russia, the sanctions’ impact on our export will be limited,” a semiconductor industry source said. “However, if the situation gets protracted, we can hardly predict the eventual impact.”

To Korean chipmakers, securing raw materials is a bigger risk factor than export. Russia and Ukraine account for about half of the global supply of rare gases including neon and krypton, which are used in chipmaking processes. Korea has been importing 30.7 percent of krypton from Ukraine and 17.5 percent from Russia last year. It also procures a significant portion of its neon import from Ukraine (23.0 percent) and Russia (5.3 percent). “We have the necessary supply for three months in our inventory at present,” a semiconductor industry source said. “We are diversifying supply sources, but if the situation gets prolonged, we could suffer damage.”

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