[Editor’s note: In justifying Japan’s clash with South Korea, Japanese prime minister Shinzo Abe is deploying the same playbook Donald Trump used when he fingered Huawei as a national security risk and started a trade war with China. Abe is likewise using “national security” as Japan’s official excuse to restrict the export of Japan-made chemicals to Korea.

These materials — hydrogen fluoride gas, fluorinated polyimide, and photoresists — are essential to chip manufacturing, and the restrictions will hit Korean electronics companies that are important suppliers in the global supply chain, including Samsung, SK Hynix and LG. The Japanese government so far has shown no evidence that South Korea is using the restricted materials for military applications.

For many in the global electronics industry, the trade war that just flared up between Japan and South Korea seems to have popped out of nowhere. Most experts believe that this is a bogus dispute rooted in grudges that date back to World War II. For decades, South Koreans have pushed for reparations for Japan’s use of forced labor and sex slaves, euphemized as “comfort women,” during Japan’s wartime occupation of Korea. Many in South Korea believe that the Japanese are unwilling to fully acknowledge the country’s wartime activities.

The following story by Takashi Yunogami originally appeared in EE Times Japan; it details the impact that Japan’s export restrictions are having on the global electronics industry. — Junko Yoshida]

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「対韓輸出規制」、電子機器メーカーの怒りの矛先は日本に向く？

On July 4, 2019, the Japanese government issued export restrictions, against Korea, for raw materials including fluorinated polyimide, photoresists, and hydrogen fluoride gas — essential to the production of electronics devices — in the guise of protecting national security.

The new regulations set by the administration of prime minister Shinzo Abe require Japanese material suppliers to obtain an export permit before shipping these raw materials to Korea. The newly imposed bureaucratic process is believed to add an “examination” period of about 90 days.

According to 2018 data from the Korea Trade Association, Korea sourced 84.5 percent of its fluorinated polyimide from Japan (import value of $19,720,000). Korea purchased 93.2% of its photoresists from Japan (US $ 298,890,000), and 41.9 percent of the hydrogen fluoride ($66,850,000) it used.

Based on the numbers, it would seem that the damage to Korean companies is greater in the cutback of fluorinated polyimide and photoresists.

However, I believe that the restrictions on hydrogen fluoride, on which Korea is the least dependent on Japan, poses the greatest threat to Korean companies. Further, I believe that these export controls will hobble not just Korean, but also Japanese companies. The eventual backlash will hit the Japanese government and might undercut Japan’s competitiveness. In short, in my opinion, the Japanese government is digging its own grave. The relationship between Japan and Korea will never be the same again.

Impact on limited export of fluorinated polyimide and photoresist

Fluorinated polyimide is a material of organic EL. If export restrictions zero out the stock of materials, two Korean giants — LG Electronics, a maker of organic EL TVs, and Samsung Electronics, which manufactures organic EL panels for smartphones — will suffer profoundly.

Meanwhile, the specific photoresists subject to the new export restrictions are reportedly those used for EUV lithography, a highly advanced semiconductor manufacturing technology that has entered use in mass production only this year.

This will potentially affect Samsung's state-of-the-art logic semiconductors produced at the 7-nm node. It could also impact 16-nm DRAMs, whose production is about to ramp up. Both Samsung and SK Hynix will feel the pain.

According to experts, Samsung is operating a semiconductor plant based on Toyota's “just-in-time” production system, keeping its stock of parts, components and materials at a minimum. Samsung appears to have stocks of EUV photoresists that can only last about a month. The same applies to its supply of hydrogen fluoride.

When the stock of EUV photoresist runs out…

Most advanced logic semiconductors are believed to be application processors (APs) for Samsung's Galaxy smartphone. Samsung shipped 292.3 million smartphones in 2018 — the most in the world.

All these devices must be equipped with the leading-edge APs fabricated using EUV equipment. But with only a one-month inventory of EUV resist, production of the leading-edge AP would slow, thus limiting smartphone volume.

More important, if EUV is already in use fabricating advanced DRAM, the damage will be far greater than the Galaxy slowdown. This is because Samsung and SK Hynix are the two global leaders in the DRAM market. In the first-quarter of global DRAM sales in 2019, Samsung held a 42.7 percent market share, followed by SK Hynix at 29.9 percent, or a total share of 72.6 percent, shown as figure 1 below.

Global DRAM Market Share by Suppliers (Source: Takashi Yunogami by compiling data from DRAMeXchange, IHS and TrendFocus)

Assuming that EUV is already used for advanced DRAM fabrication, the stock shortage for EUV photoresists will limit their production. In turn, that would hinder production of smartphones. About 1.4 billion smartphones were shipped in 2018, along with 300 million PCs, 150 million tablets and roughly 11.75 million servers. (I use market data provided by IDC).

The blame for this choking-off of supply, by Apple, HP, Dell and others, I believe will not necessarily fall to Korean DRAM suppliers, but to the Japanese government. After all, it is Japan that will have sparked the shortages with its export restrictions. The global electronics industry will be furious at Japan.

Influence of hydrogen fluoride

I originally thought that a shortage of EUV photoresists posed the gravest impact among the three chemical materials exported by Japan. This is because suppliers of EUV photoresists are limited to Japanese companies such as Shin-Etsu Chemical, JSR, Fujifilm and Tokyo Ohka Kogyo.

However, upon further analysis on semiconductor manufacturing process, I’ve concluded that a limited volume of hydrogen fluoride gas — rather than EUV photoresists — will have much more serious consequences for chip production.

Before getting into that, I’ll explain first how hydrogen fluoride (HF), or hydrofluoric acid, is used in semiconductor manufacture.

1) In the cleaning process before depositing various metals including poly-Si, insulating film

Hydrofluoric acid is used in a batch-type cleaning system capable of processing hundreds of wafers at a time. The chemical is diluted with a very high purity water called Deonized water (DI water) at a certain mixing ratio.

2) In the cleaning process after CMP

Hydrofluoric acid is mixed with ammonium hydroxide (NH 4 OH, so-called ammonia water). It is used for clearing batches.

3) In the wet etching process of sacrificial film in double patterning

The process uses a stock solution of hydrofluoric acid, deployed mainly by a batch-type wet etching system.

4) In the backside cleaning process of wafer

For example, to remove SiN attached to the back of a wafer, the clearing process uses hydrofluoric acid mixed with ammonium hydroxide (or the like). Each wafer is sprayed clean. The semiconductor manufacturing process consists of 500 to 1,000 steps, but the cleaning and wet etching processes are used in more than 10% of the entire production processes.

Cleaning that uses no hydrofluoric acid accounts for 30-40% of semiconductor fabrication steps. This well illustrates that as the node gets finer, the busier cleaning process gets. The point is to wash, wash and further wash wafers to remove any fine particles.

Then, each foundry deploys proprietary recipes for a mixing ratio of the cleaning solution, each strictly determined for every process. This results in the final yields at each foundry.

What happens if the hydrogen fluoride stock runs out?

Therefore, hydrogen fluoride is used in a tenth or more of the semiconductor manufacturing process. This chemical solution is applied to semiconductors ranging from logic devices to DRAMs, NAND flash devices and even OLED. In short, hydrogen fluoride is the acid indispensable for volume production of all chips.