By Heekyong Yang
SEOUL (Reuters) - South Korea said on Thursday DuPont (NYSE:DD) will invest $28 million in the country to produce advanced photoresists and other materials by 2021, a move that will help reduce its reliance on Japan for the products used in semiconductor manufacturing.
Amid a bilateral row over wartime laborers, Japan in July imposed curbs on exports of three materials including photoresists to South Korea, prompting a scramble among South Korean tech firms to diversify their supply chain.
Last month, Japan reversed the curbs on exports of photoresists, although tighter curbs on the two other materials - fluorinated polyimides used in smartphone displays and hydrogen fluoride used as an etching gas when making chips - remain.
"Although Japan has recently eased export controls of photoresists, which is partial progress, but it is not a fundamental solution," South Korea's Industry Minister Sung Yoon-mo said in a statement.
A trade ministry official said DuPont will invest in two existing factories in South Korea and build a new one.
Photoresists are thin layers of material used to transfer circuit patterns onto semiconductor wafers. Japan produces around 90% of photoresists.
The ministry official said Dupont's Korean subsidiary currently produces photoresists, but not ones needed to make chips with an advanced technique known as extreme ultraviolet or EUV lithography.
The new investment will also go towards the production of CMP pads, which are polishing pads used during the semiconductor manufacturing process, the ministry said.
A representative for the U.S. industrial materials maker was not immediately available for comment.