(Bloomberg) -- U.S. technology companies urged Japan and South Korea to negotiate a resolution to a dispute that threatens to up-end the global supply chain that the world’s top electronics brands rely on make their products.
Five of America’s largest tech industry groups including the Semiconductor Industry Association, which counts Qualcomm (NASDAQ:QCOM) Inc. and Intel Corp (NASDAQ:INTC). among its members, issued a joint letter to Japanese Economy Minister Hiroshige Seko and South Korean Minister of Trade Yoo Myung-hee. They asked both sides to refrain from escalating their conflict, which flared after Japan slapped restrictions this month on exports to South Korea of three materials vital to the production of chips and cutting-edge screens.
Resurgent tensions between Japan and South Korea threaten to wallop chipmakers from Samsung Electronics (KS:005930) Co. to SK Hynix Inc., upsetting a carefully choreographed global supply chain by smothering the production of memory chips and other components vital to widely used devices.
The groups’ letter is well-timed: U.S. National Security Adviser John Bolton is in Seoul Wednesday for wide-ranging talks that come on the same day that marks the end of a public consultation period on whether Japan should exclude South Korea from its so-called “white list” of trusted export destinations treated as presenting no risk of weapons proliferation.
“Japan and South Korea are important players in these global value chains,” the trade groups, which also include the National Association of Manufacturers, wrote. “Non-transparent and unilateral changes in export control policies can cause supply chain disruptions, delays in shipments, and ultimately long-term harm to the companies that operate within and beyond your borders and the workers they employ.”
South Korean suppliers of key materials for chipmakers have surged since Japan unveiled measures targeting its neighbor, buoyed by hopes that they may win new business from key players including Samsung and SK Hynix Inc.