Japan and South Korea are important global markets, but Japan’s years of colonial rule over South Korea, and the recent breach of contract by Japanese semiconductor companies show that Japan has gone to extreme lengths in its dealings with South Korea. Despite facing such a universally despised enemy, the South Korean government has humiliatingly compromised twice, especially under the current President Yoon Seok-yeol, who has been criticized by the public for being pro-Japanese and anti-nationalist.
Although many believe that reconciliation between Japan and South Korea is a false proposition, it is undeniable that since Yoon Seok-yeol took office, relations between Japan and South Korea have thawed, leading to a minor diplomatic climax.
The animosity between Japan and South Korea stems from an unforgettable history, making anti-Japanese sentiment a political correctness in South Korea. Every South Korean leader, from the national father Kim Gu, who implemented anti-Japanese policies despite pressure, to Syngman Rhee, who created the famous Syngman Rhee Line, a fishing boundary prohibiting Japanese entry, has viewed anti-Japanese sentiment as fundamental to the nation’s founding.
This shows that every South Korean leader has deeply resented Japan, but why did Park Chung-hee humiliatingly compromise, risking such great disapproval?
Park Chung-hee once served in a Japanese military camp and was known to the Japanese as Masao Takagi. To reverse South Korea’s weak economy, he chose to compromise with Japan, which paid a substantial war reparation of 300 million dollars. This windfall was a timely aid for South Korea, but the question of why Park needed this money so desperately lies in the semiconductor industry.
Around 2010, Samsung of South Korea almost monopolized the global semiconductor industry with an unmatched market share. However, in the 1960s, Samsung was just a small subcontractor, earning modest revenue by producing black-and-white TVs for Japan. At that time, Japan’s GDP was 30 times that of South Korea’s, and its per capita GDP was nearly 10 times higher. Park Chung-hee and Samsung Group’s chairman, Lee Byung-chul, both realized that subcontracting was not sustainable and that developing semiconductors was key to economic growth. By bowing to Japan, Park not only secured a huge foreign exchange but also obtained outdated semiconductor design blueprints from Micron Technology of Japan at a low cost. However, breaking into the global semiconductor market was challenging, and it took 26 years for Samsung to transform from an also-ran to a market leader.
After Park Chung-hee’s assassination, starting in the 1990s, South Korea began to wave the anti-Japanese flag high, with progressive politicians like Kim Young-sam, Kim Dae-Jung, Roh Moo-hyun, and Moon Jae-in taking power. The progressives continued to seek redress from Japan, but under Moon Jae-in’s administration, long-standing semiconductor trade tensions between Japan and South Korea finally erupted.
In July 2019, Japan’s Ministry of Economy, Trade and Industry took drastic action by amending its export control policies towards South Korea, removing South Korea from its so-called ‘white list’ and blacklisting it. According to the rules at the time, Japanese suppliers had to apply for additional export licenses to export materials such as hydrogen fluoride, fluorinated polyimide, and photoresists to South Korea, which are essential for semiconductor fabrication.
Japan’s reasoning for this move was that the mutual trust in security matters between Japan and South Korea had been greatly damaged, and exporting sensitive materials that could be used in weapons manufacturing to South Korea could threaten Japan’s national security.
01
The Japan-South Korea Semiconductor Dispute
Scholars have published articles stating that Japan’s trade control measures, ostensibly for security reasons, were aimed at retaliating against South Korean tech companies for infringing on the intellectual property of Japanese enterprises. There were various interpretations, but none was conclusively established. However, certainly, South Korea’s semiconductor industry was severely impacted, and the South Korean government attempted to counter Japan’s trade restrictions. On the multilateral level, South Korea requested Japan to withdraw its export restrictions at a meeting in Geneva and sent high-ranking officials to discuss the import-export control issues with Japanese officials. At the bilateral level, talks were held in Tokyo between the governments, and on the corporate level, Samsung Electronics Vice Chairman Lee Jae-Yong personally went to Japan to negotiate with suppliers to restore material supply, but these attempts did not make significant progress.
South Korea is the world’s largest manufacturer of memory chips, and Japan is a major supplier of key materials for manufacturing these chips. The transnational supply chain between Japan and South Korea produces a large number of electronic products for the world. According to data from the six months before Japan’s export controls took effect, over 90% of South Korea’s fluorinated polyimide and photoresist and about half of its hydrogen fluoride depended on imports from Japan.
Despite the South Korean government’s efforts to reduce reliance on Japanese suppliers, South Korea still heavily depends on Japan for high-tech materials, and Japan’s trade restrictions could have a significant negative impact on South Korea’s technology industry. In August 2019, the Japanese Cabinet formally approved the removal of South Korea from its white list. In the same month, the South Korean government took retaliatory measures, removing Japan from its so-called trade white list, and Japan likewise lost its status as South Korea’s preferred trading partner.
To reverse this situation, the then South Korean President Moon Jae-in wrote a letter to Japanese Prime Minister Yoshihide Suga in 2020, stating his readiness to sit down with the Japanese Prime Minister for a summit at any time, emphasizing that Japan is South Korea’s closest cultural and geographical friend and a field with shared fundamental values and strategic interests. Japan reiterated that liquidating Japanese companies’ assets could lead to an extremely serious situation and must be remedied at all costs. South Korea asked Japan to relax its restrictions on exports of key industrial materials. Both sides proposed conditional easing, but historical issues remained an insurmountable obstacle. Only one side’s concession could advance negotiations and further ease bilateral relations. However, neither side took this step, but in March 2023, there was a dramatic turn of events.
Yoon Seok-yeol proactively visited Japan and chose to compromise humiliatingly. With strong intervention from the United States, Yoon Seok-yeol bowed his head to maintain the tattered Japan-South Korea relations. The essence of the dispute over semiconductor trade between Japan and South Korea lies in the political imbalance in the Japan-U.S.-South Korea relations.
02
The Unequal U.S.-Japan-South Korea Relationship
Since the end of World War II, the relationships between the U.S. and Japan, and the U.S. and South Korea, have been the most important foreign relations for Japan and South Korea, even forming the foundation of their nationhood. In advancing regional strategies, the U.S., Japan, and South Korea often cooperate in a quasi-alliance format. However, the relationship among these three countries is unequal.
The United States, as a common ally to both Japan and South Korea, holds a dominant position. Japan, serving as the U.S.’s stronghold in East Asia, plays the role of America’s number one ally and is superior to South Korea in coordinating U.S.-Japan-South Korea relations. South Korea, being the weakest among the three, often acts as a follower of U.S. policies and an assistant to Japanese strategies. The perspectives and interests of South Korea are frequently overlooked by the U.S. and Japan. The support and assistance South Korea receives come far behind Japan, and it often has to make sacrifices for U.S. and Japanese strategies.
South Korea’s awkward position, while beneficial to its development, especially during times of national weakness in the last century, has increasingly become a liability. South Korea fears that aligning with U.S. and Japanese strategies may entangle it in conflicts, yet it also worries that insisting on its stance might lead to abandonment by its allies. The U.S.-Japan-South Korea coordination system being replaced by U.S.-South Korea and U.S.-Japan bilateral relationships has made the deterioration of these relationships and the outbreak of Japan-South Korea trade disputes possible.
Moreover, the recent Japan-South Korea semiconductor trade dispute is intricately linked to the situation in East Asia.
South Korea has been more independent and proactive in its relationship with Japan than at any other time in history. This firm stance in dealing with Japan, determinedly countering Japanese trade controls, and maintaining a firm position in the trade dispute, laid the foundation. However, Yoon Seok-yeol’s recent submission has once again declared that South Korea’s independence is nothing more than an illusion.
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