July 18, 2019 / 11:02 AM / a month ago

Samsung asks partners to stockpile Japanese components - source

FILE PHOTO: The logo of Samsung Electronics is seen at its office building in Seoul, South Korea, July 4, 2017. REUTERS/Kim Hong-Ji/File Photo

SEOUL (Reuters) - South Korea’s Samsung Electronics has sent letters to local partners urging them to stockpile more Japanese components in case Tokyo expands its export restrictions, a source with knowledge of the matter said on Thursday.

The move comes in the face of Tokyo’s curbs on some exports of high-tech materials to South Korea that threaten to disrupt the global supply of microchips used by technology companies around the world.

The source, who spoke on condition on anonymity, said the letters were recently sent to local suppliers for the smartphone and home appliances businesses.

Earlier on Thursday, Yonhap news agency reported that Samsung had sent the letters and was “exploring all possible means” to secure more components in preparation for Japan possibly expanding the restrictions.

In letters sent earlier this week, Samsung asked partners to secure components by the end of July, or before Aug. 15 at the latest, the Yonhap report says.

Samsung, the world’s biggest memory chipmaker, declined to comment on the report.

Japan is considering whether to remove South Korea from its “white list” of countries with minimum trade restrictions, a move South Korean officials have said would cause a “tremendous amount of problems” and strain ties between Japan, South Korea, and the United States.

Samsung has told its partners it would shoulder the additional costs of stockpiling the components, the report says.

Reporting by Ju-min Park, additional reporting by Josh Smith; Editing by Himani Sarkar

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