New additions to existing 100 core technologies of materials, parts and equipment will be designated
New additions to existing 100 core technologies of materials, parts and equipment will be designated, which is a move to prepare for a sweeping paradigm shift in the manufacturing sector
The Ministry of Industry, Trade and Energy is to introduce policies on materials, parts and equipment capable of responding to global supply chain abnormalities
The government is also reviewing a) supporting R&D on materials, parts and equipment and b) establishing a comprehensive system dedicated to providing assistance in response to supply chain abnormalities.
Young-jin Jang, the First Vice Minister of Industry, Trade and Energy, visited a company that successfully developed core materials, parts and equipment technology used to produce rechargeable batteries and announced, “The Ministry is designing policies that go beyond covering materials, parts and equipment, which fit the sweeping transformation of the manufacturing sector”
The government is reviewing measures to drastically expand the scope of core strategic technologies linked with materials, parts and equipment. Currently, there are up to 100 types of technologies designated as core strategic technologies. According to the Ministry of Industry, Trade and Energy on August 25, the Ministry is in the process of pushing ahead with expanding the scope of core strategic technologies in line with the new government’s policies on materials, parts and equipment. The previous administration implemented measures in 2019 to designate 100 types of core strategic technologies in response to Japan’s policy to restrict exports to Korea. In 2020, through “Strategies on materials, parts and equipment 2.0”, the type of items relevant to core strategic technologies was extended to cover at least 338 items.
Despite the introduction of the measures, the implementation was limited to monitoring up-to-date trend of key items as these measures were not sufficiently supplemented with specific means of providing support. The Ministry of Industry, Trade and Energy released a plan titled “2022 implementation schedule of measures relevant to materials, parts and equipment” in March this year, which included plans to add four vaccine and cutting-edge bio sector technologies as core strategic technologies and also cover raw materials, including minerals, within the category of materials, parts and equipment. The new government is projected to go further and expand the scope of policies on materials, parts and equipment to properly respond to both Japan’s export ban and global-scale supply chain risks.
According to the Ministry of Industry, Trade and Energy, semiconductors ？ Korea’s main export item ？ will see its scope of core strategic technologies expanded beyond technologies involving parts and memory semiconductors to further include process technologies such as packaging and system semiconductor technologies. Aside from this measure, according to sources familiar with the matters of the Ministry, it is also reviewing a) innovating R&D of materials, parts and equipment, b) providing unwavering support for enterprises to expand their business into the overseas market and c) establishing a comprehensive system on providing assistance in response to supply chain abnormalities. Policies on materials, parts and equipment, which have been implemented by the previous administration, have delivered some key achievement despite the persistence of global supply chain risks.
As of the first half of this year, Korea’s reliance on Japanese-made materials, parts and equipment decreased to a historically low level as only 15.4% of imported materials, parts and equipment came from Japan. In regards to 100 core technologies, Korea relied on Japan to source 30.9% of these technologies in 2019. This figure went down by 6%p to 24.9% last year. Despite such success, the existing policies on materials, parts and equipment revealed its limits as these policies consist of systems overly focused on a few selected countries and high-level technologies, which eventually lead to a failure of implementing a timely response to last year’s urea solution crisis.
Additionally, as the existing policies focused on strengthening competitiveness of core technologies of main industries, the policies were evaluated as lacking elements of leading a future-oriented global supply chain market to a certain extent. An official from the Ministry of Industry, Trade and Energy mentioned, “We plan to expand the existing supply chain management policies focused on Japan and Korea’s main industries to additionally cover China and the rest of the world, and also include cutting-edge industry sectors.” The official added, “We are also devising measures to better manage and support supply chains of materials that are universally used in a wide array of sectors and those used as base materials, including urea.”
In line with this plan, Young-jin Jang, the First Vice Minister of Industry, Trade and Energy is scheduled to visit a POSCO Chemical factory on August 25. It is the first Korean company to successfully produce domestically-made anode material made out of artificial graphite by taking advantage of a collaborative model for materials, parts and equipment. Artificial graphite is a core material that is used to produce anode material for rechargeable batteries. Compared to natural graphite, artificial graphite allows longer battery life and cuts down on charging time of electric vehicles. Despite such advantages, Korea fully relied on China and Japan to secure this material as not a single company in Korea was equipped with production technologies of artificial graphite.
POSCO Chemical, as being a collaborative model for materials, parts and equipment, received comprehensive government support. The company invested KRW 260 billion to develop technologies to produce home-made artificial graphite and build new production facilities. The government has designated POSCO Chemical as a collaborative model on January 2020 at the third meeting hosted by the Committee of Strengthening the Competitiveness of Materials, Parts and Equipment, resulting in the company to receive KRW 10 billion worth of government funds until August this year. POSCO Chemical completed the first phase of construction of its production facilities in January this year, which secures the company to produce 8,000 tons of artificial graphite a year. The company plans to expand domestic production to 16,000 tons a year.
The First Vice Minister praised the efforts invested to set up a supply chain in the country and the achievement of strengthening the competitiveness of rechargeable battery sector. He also plans to directly listen to opinions and suggestions on the direction of policies on materials, parts and equipment by holding on-site meetings. The First Vice Minister mentioned, “We are investing efforts to design supply chain policies that can respond to global supply chain crisis and the paradigm shift of the manufacturing sector and go beyond existing policies on materials, parts and equipment that are underpinned by a fast follower strategy focused on resolving imminent issues faced by Korea’s main industries” and added, “New policies will be made public later on after additionally collecting opinions from enterprises and experts and going through discussions with relevant government departments”
[This news is provided by Newsis]
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