Japan-South Korea’s Rivalry: The Semiconductor Industry Instrumentalization and Its Implication for the Future of Japan-South Korea Economic Interdependence

The 45th US president, Donald Trump, has created an environment suitable for bilateralism and trade conflict. Pursuing a similar path, Japan launched in July 2019 an export restriction toward South Korea on three key chemicals for the semiconductor industry. With South Korean firms being leaders for memory semiconductors and highly dependent on Japan for chemicals, this export restriction could deeply impact South Korea’s semiconductor business as well as the world offer for memory semiconductors. Having a lingering historical dispute with South Korea, Japan tried to use these trade restrictions to put pressure on the country. However, Japan did not enforce its restriction too harshly in order to both save its face internationally and its local industry. Nonetheless, the decoupling process of the semiconductors industry with South Korea is ongoing and unlikely to go back…