SEOUL, June 14 (Reuters) – A nationwide strike by truck drivers in South Korea has disrupted shipments to China of a key cleansing agent utilized by makers of semiconductor chips, the Korean Worldwide Commerce Affiliation (KITA) stated on Tuesday.
It was the primary signal the eight-day-old strike was affecting chip manufacturing’s international provide chain. It has already price South Korea’s trade greater than $1.2 billion in misplaced output and unfilled deliveries, in line with the trade ministry. learn extra
KITA stated a Korean firm that produces isopropyl alcohol (IPA), a chemical used within the cleansing of chip wafers, confronted difficulties in transport to a Chinese language firm that in flip provides wafers to chipmakers. It didn’t identify both firm.
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About 90 tonnes of the fabric, or per week’s value of shipments, have been delayed, the commerce physique stated in a press release.
It corrected an earlier assertion that had wrongly stated manufacturing was disrupted, and added that the Chinese language agency didn’t provide wafers to Samsung Electronics Co Ltd’s (005930.KS) chip manufacturing operations in China.
A serious South Korean petrochemical firm was additionally going through issues sending out IPA shipments from its plant within the port metropolis of Yeosu, in line with an individual acquainted with the matter who requested to not be named.
Solely an “important quantity” is being let by, they stated, declining to establish the corporate due to the sensitivity of the matter.
The truckers’ union, which is protesting in opposition to hovering gas costs and demanding ensures of minimal pay, vowed to proceed the strike after 4 rounds of talks with the federal government did not discover a decision.
Members of the Cargo Truckers Solidarity union participate in a protest in entrance of a Samsung Electronics’ manufacturing facility in Gwangju, South Korea, June 14, 2022. Yonhap by way of REUTERS
Transport Minister Received Hee-ryong dominated out accepting any demand that sought to make use of the nationwide economic system as a hostage.
“The federal government will proceed to take heed to affordable arguments however strictly reply to unlawful actions in accordance with legal guidelines and precept,” Received stated, in line with a ministry assertion.
The 2 sides plan to renew talks at 7 p.m. (1000 GMT) on Tuesday, the transport ministry stated, an hour sooner than beforehand introduced by the union.
Analysts count on the strike’s impression on home chipmakers to be restricted, saying that each Samsung and the world’s second largest reminiscence chip maker, SK Hynix (000660.KS), often maintain sufficient materials available for 3 months or extra.
“Each drastically elevated stock since Japan’s export curbs on chip materials in 2019 highlighted the problem,” Ahn Ki-hyun, senior government director of the Korea Semiconductor Business Affiliation, stated.
Small enterprise house owners voiced concern concerning the havoc a prolonged strike might have on the restoration from the COVID-19 pandemic, because the truckers launched their motion lower than two months after social distancing norms had been lifted.
“Small enterprise house owners are ready helplessly,” a dozen foyer teams representing such companies stated in a joint assertion, including that shipments of liquor, meals, farm and fisheries merchandise had been blocked.
An official from HiteJinro Co Ltd (000080.KS), the largest brewer of soju, the South Korean liquor, stated its shipments had been lower by about 40% by the strike.
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Reporting by Byungwook Kim and Joyce Lee; Extra reporting by Heekyong Yang; Enhancing by Stephen Coates, Clarence Fernandez and Andrew Heavens
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