Japan has threatened to halt the export of key elements in the chip production chain, until its current rift with South Korea is resolved

Smartphone production levels in South Korea could be about to stall as the Korean government continues its protracted trade negotiations with Japan.

Last week, Tokyo said that it would restrict exports of three crucial chemical compounds used in the production of smartphone handsets, as relations between the two countries deteriorated.

A report by Channel News Asia suggested that a long running dispute over Japanese forced labour during World War II has escalated in recent weeks, as the two countries attempt to negotiate a new reciprocal trade deal.  

"South Korea is the world leader when it comes to chip-making, and Japan is the world leader in the manufacturing of the key materials for chip-making," Ahn Ki-hyun, vice-president of the Korea Semiconductor Industry Association, told journalists from Channel News Asia.

"With this trade row, Japan and South Korea are both losing their best partners. And neither of them will find good alternatives for a very long time," he added.

"Ultimately, this will bring a stagnation or regression of the world’s most cutting-edge technology. The price of gadgets may rise, as chips will likely be in short supply."

South Korea became the first country in the world to launch at-scale, commercial 5G services earlier this year, and is seen as the world’s test market for next generation mobile network technology. The country clocked up 260,000 5G subscriptions in the first month of operations, with that number now creeping towards a million

With the current spat with Japan threatening to continue, concern is mounting that a potential delay in handset production could delay uptake of 5G in South Korea.

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