TOKYO • Japan plans to tighten restrictions on the export of high-tech material used in smartphones and chips to South Korea starting from Thursday, in connection with a dispute over a South Korean ruling on wartime forced labour, the Sankei newspaper reported yesterday.

The Tokyo-Seoul row flared up last October when South Korea's Supreme Court ruled that Japan's Nippon Steel must compensate South Koreans for forced labour during World War II.

Japan maintains that the issue of forced labour was fully settled in 1965, when the two countries restored diplomatic ties, and has denounced the ruling as "unthinkable". Under the 1965 treaty, South Korea received a package of US$300 million in economic aid and US$500 million in loans from Japan, in exchange for Seoul considering all pre-treaty compensation issues settled.

The materials to be restricted are fluorinated polyimide, which is used in smartphone displays, and resist and high-purity hydrogen fluoride (HF), which is used as an etching gas in the making of semiconductors, the paper said.

Resist is a thin layer used to transfer a circuit pattern to the semiconductor substrate. High-purity HF is used in etching silicon materials.

Japan will stop preferential treatment for these three materials for South Korea, meaning Japanese exporters must apply for export permission each time they want to ship to South Korea, which takes about 90 days, the paper said.

A government announcement on the restrictions is expected today, according to the paper.

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Japan produces about 90 per cent of fluorinated polyimide and resist worldwide, as well as about 70 per cent of etching gas, making it difficult for chipmakers to find alternative supplies, the Sankei said, pointing to possible impact on South Korea's Samsung Electronics and LG Electronics.

Japan's Industry Ministry and Finance Ministry were not available for comment yesterday.

In January, Japan demanded talks with South Korea over the forced labour issue but Seoul did not respond, the newspaper said.

Seoul said last month that it had proposed a joint fund with Japan to compensate South Koreans forced to work by Japanese companies during World War II, but Tokyo rejected the idea.

REUTERS