Since Tokyo's new export restrictions on high-tech materials to Seoul took effect, there have been growing concerns about the impact they will have on South Korea's biggest tech firms, such as Samsung, LG and SK hynix.
Analysts say it's inevitable Japan's measures will hurt them in the long run.
Our Ko Roon-hee explains.
Some of Korea's IT industry sources say... firms aren't immediately feeling the impact of Tokyo's export restrictions on materials needed to make chips and displays.
That's mainly because Korean firms have stockpiles of the materials.

However, many analysts say the restrictions will hurt Korean firms in the long run... citing Korea's dependence on chip material imports from Japan.
The tighter export curbs target three materials.
For photoresists, or light-sensitive materials that are used in chip manufacturing,
more than 90-percent of Korea's total imports come from Japan.
For fluorinated polyimides, used for making displays used in Samsung and LG's smartphones..., the figure was almost 94-percent.
An economic expert explained the reason behind the high share.

"The quality of items that Korea imports from Japan is very high. Because Korea's chip and Japan's high-tech material sectors rely on each other, it's difficult for us to find other markets aside from Japan. It will take a long time for other countries, like those in Europe, to catch up to Japanese technology."

Experts say that Japan's move might not only hurt the nation's economy, which relies on chip exports,... but it also may possibly affect the global chip industry in the long run, considering that Korean tech giants were among global semiconductors sales leaders in the first quarter of this year.

Now all eyes are on how the two countries' governments are handling the matter. Government officials are considering all necessary countermeasures,...
including taking the matter to the World Trade Organization... where the dispute settling process is expected to take around two to three years.
Korea's trade minister said earlier that Japan's move goes against the norms of the WTO... whereas Japanese Prime Minister Shinzo Abe argued the opposite... claiming it is a national security issue.
A local expert explained the reason behind Seoul's announcement.

"The WTO forbids members from imposing export restrictions aside from tariff measures. But there are cases when restrictions are allowed. One is when the country applying the measures is facing a shortage of raw materials. The other is when the country's national security is being threatened. However, Japanese Prime Minister Shinzo Abe is not explaining the reason when mentioning the national security issue."

Experts emphasize that the two sides must avoid economic tit-for-tat... as this could cause even more harm to both their economies.
Ko Roon-hee, Arirang News.