Samsung may team up with LG following Japanese trade restrictions

Samsung’s semiconductor and display businesses are under serious threat due to the deepening trade dispute between Japan and South Korea. And fearing the worst, Samsung seems to have drawn up its contingency plans. The company is reportedly turning to domestic suppliers for the crucial materials. Samsung is also looking to diversify its smartphones parts suppliers.

LG to supply smartphone batteries

Japan has singled out three materials – fluorinated polyimide, photoresist and hydrogen fluoride – in its trade restrictions on South Korean companies. The restrictions have had direct implications on the chip and display production of Samsung. The company has already begun looking for non-Japanese suppliers for the crucial materials. The South Korean conglomerate is in talks with suppliers from China and Taiwan, as well as various local companies.

SKC, a South Korean chemicals manufacturing company, could be Samsung’s supplier of colorless polyimide (CPI) films, a key material required for manufacturing foldable displays. The company currently sources CPI films from Japan’s Sumitomo. Samsung could also collaborate with another domestic film maker Kolon Industries for its future foldable smartphone endeavors. As far as the Galaxy Fold is concerned, Samsung reportedly has enough CPI inventory to not effect its launch. The smartphone should hit the market soon.

With the expectation that the Japanese trade dispute will likely be prolonged, Samsung is now seeking to diversify its smartphones parts suppliers as well. The company has selected LG Chem as one of the battery suppliers for the Galaxy Note 10. “Since battery materials like separators could also be subject to Japan’s restrictions in a worst-case scenario, the new partnership between Samsung and LG seems advantageous for both groups.” The Korea Herald quotes a source as saying. Samsung currently uses batteries manufactured by its affiliate Samsung SDI and some foreign makers.

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