South Korean firm to boost output of chipmaking chemical amid Japan curbs: report

FILE PHOTO: Mobile memory chips made by chipmaker SK Hynix are seen in this picture illustration taken in Seoul May 10, 2013. REUTERS/Lee Jae-Won/Illustration

SEOUL (Reuters) - A South Korean maker of a chemical that is used for producing semiconductors will increase output soon with a new plant coming on stream, helping domestic chipmakers offset export curbs imposed by Japan, a local media report said on Tuesday.

The hydrogen fluoride factory operated by SoulBrain Co Ltd 036830.KQ will begin operations in September and the company hopes to help replace imports from Japan, online business media MoneyToday reported, citing an unnamed SoulBrain official.

Japan earlier this month tightened curbs on exports of high-tech materials used in semiconductors and smartphone displays, threatening to disrupt the global supply of microchips used by the likes of Apple Inc APPL.O and Huawei Technologies Co.

South Korean chipmaking giants Samsung Electronics 005930.KS and SK Hynix 000660.KS rely on Japan for three key materials although they source some hydrogen fluoride from China and from South Korean firms.

SoulBrain already supplies some hydrogen fluoride, used as an etching gas when making chips, to Samsung and SK Hynix, according to a company filing.

An official at SoulBrain declined to comment on the report.

South Korea sourced 44% of hydrogen fluoride from Japan in the first five months of the year, Korean industry data showed.

Japan produces about 70% of etching gas worldwide, according to Japanese media.

SoulBrain shares jumped as much as 26.5% on Tuesday to a record high before closing up 6.5%.

Reporting by Sangmi Cha and Heekyong Yang; Additional reporting by Hayoung Choi; Editing by Jack Kim and Muralikumar Anantharaman