South Korea has announced plans to invest about 7.8 trillion won ($6.48 billion) in research and development for local materials, parts and equipment over the next seven years in an effort to cut the reliance on Japanese imports.
The move comes after Japan on Friday dropped Korea from its “white list” of countries with fast-track export status, intensifying a row over wartime forced labourers.
In July, Japan tightened controls on the export of materials used to make chips, South Korea’s top export item, which threatened to disrupt global semiconductor supplies used by tech giants such as Apple and Huawei.
“We want to turn the crisis into an opportunity for the materials, parts and equipment industry,” South Korea’s industry minister, Sung Yun-mo, said at a press briefing.
South Korea plans to raise “self-sufficiency” for 100 key components, materials and equipment items used to make chips, displays, batteries, automobiles and other products, with a goal to stabilize supply over the next five years.
The plan aims to “address structural weakness in South Korea’s materials, parts and equipment sector, which heavily depends on a particular country,” the government said in a statement.