Anchor: Despite criticism at home and abroad, Japan has pushed forward its plan to regulate exports to South Korea of three high-tech materials that are crucial for producing semiconductors and display panels. South Korea's Finance Minister Hong Nam-ki urged Japan to withdraw the export restrictions on South Korea, denouncing them as "economic retaliation."
Bae Joo-yon has more. 

Report: Under Japanese trade restrictions starting Thursday, Japanese firms are required to secure government approval in order to export fluorinated polyimides, photoresists or etching gas to South Korean companies.  

The move is sure to disrupt the semiconductor production schedules of South Korean companies, including Samsung Electronics and LG Electronics, which heavily depend on these key items. The move is also likely to deal a serious blow to related industries all around the world that rely on chips made by South Korean companies.  

Nearly 94 percent of fluorinated polyimides and photoresists used by South Korean firms come from Japan, while some 44 percent of etching gas is imported from the island nation as well. 

Beginning Thursday, Japanese firms wishing to export those items to South Korean business partners must apply for a permit that can take about 90 days to be approved. 

Japan is also said to be considering expanding the export controls and may seek stricter regulations on goods such as electronic parts and related materials with military applications.

During a local radio interview on Thursday, South Korea's Finance Minister Hong Nam-ki urged Japan to withdraw its export restrictions, denouncing them as "economic retaliation." 

The latest dispute stems from the South Korean Supreme Court's ruling last year that ordered Japanese firms to pay reparations to South Korean victims of Japan's wartime forced labor. 

Tokyo has lashed out at the judiciary decision, arguing that all colonial-era compensations have been settled under a 1965 accord. 

Hong said that Seoul will decide when to file a complaint with the World Trade Organization over Japan's decision as soon as an internal review is complete. The minister warned that Japan's export restrictions could hurt not only Seoul but Tokyo as well.

According to the domestic electronics industry insiders, major producers of semiconductors sent representatives to Japan to find out whether their supply will be affected and to what extent. The local industry has judged that immediate production disruption is unlikely, due in part to inventory levels of chips that can last for several months.

According to the Asahi Shimbun on Wednesday, Japan's largest electronics manufacturer, Sony, expressed concerns about production and supply interruptions with its South Korean business partners. 

The report also quoted a semiconductor equipment manufacturer as saying that it is concerned that it will take a hit if South Korean chip makers cut back on equipment investment.
Bae Joo-yon, KBS World Radio News.