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(LEAD) S Korea-China-export curbs
(LEAD) S. Korea to enhance monitoring of metal supply chains over China's export curbs
(ATTN: RECASTS headline, lead with gov't emergency meeting; ADDS more details throughout)
SEOUL, July 4 (Yonhap) -- South Korea's industry ministry said Tuesday that China's envisioned export controls on two metals essential for chipmaking and high-tech industries would have a limited impact on the country in the near term, but vowed to beef up monitoring and seek swift responses to minimize industrywide ripple effects.
On Monday, China's commerce ministry said it will impose restrictions on exporting gallium and germanium starting Aug. 1 to protect its national security, requiring their exporters to apply for special state permits.
The materials are crucial for making a range of key products, including chips, solar panels and electric vehicles, and China is a major producer and exporter of the materials in the world.
In the wake of the announcement, Seoul's industry ministry held an emergency meeting with major business associations, the Korea Trade-Investment Promotion Agency and other state-run industry agencies on Tuesday to assess the impact and discuss responses.
The planned move is likely to have a limited impact on the domestic industry, at least in the short run, as gallium is mainly used for research projects to develop next-generation semiconductors in the chipmaking sector.
The display field could be affected by the restrictions, as gallium is used for making organic light emitting diode (OLED) display items, but South Korean firms will be able to import the metal from nations other than China, such as the United States, corporate officials said.
South Korean companies have also secured a stockpile of gallium that can last about 40 days.
Domestic chipmakers have also bought germanium that they need for industry use from multiple import channels, they added.
"The government will closely watch related developments and seek responses in a swift manner, as we cannot rule out the possibility of the restrictive move being expanded further. We will also analyze its impact on related, broader industry sectors," senior ministry official Joo Young-jun said.
"The government will strive for securing replacement suppliers of major resources to ensure the smooth operation of chipmakers and other companies, while supporting technology development to reduce dependence on foreign sources," he added.
South Korea is heavily dependent on China and a handful of resource-rich nations for their supplies of key minerals for manufacturing.
China's export restriction is seen as apparent retaliation after Washington restricted chip exports to China amid the intensifying Sino-U.S. rivalry, and some have pointed to chances of further tit-for-tat moves by the United States and other nations.
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