South Korea may retaliate against Japan's latest export limits on high-tech materials, it said on Thursday, as a row over forced wartime labor threatened to disrupt global supplies of memory chips and smartphones.
Samsung Electronics Co and SK Hynix Inc - the world's top memory chipmakers and suppliers to Apple and China's Huawei Technologies - could face delays if the measures that took effect on Thursday drag on.
"Implementing corresponding measures against Japan cannot be ruled out," said Finance Minister Hong Nam-ki, adding it would take a long time for a World Trade Organization ruling on the dispute.
Hong told South Korea radio the trade row could cause "unfortunate damage to both Korean and Japanese economies."
The dispute is the latest flashpoint in a quarrel over South Korean efforts to seek compensation for Japan's use of forced wartime labor, which got fresh impetus from South Korean court rulings last year.
The curbs on exports of three materials used in South Korean chips and smartphone displays, which Japan had announced on Monday, will disrupt the global supply chain, South Korea's trade minister said.
Japan accounts for 70-90 percent of the production of the three materials, Japanese media have said, making it difficult for South Korean chipmakers to find alternative sources of supply.
"It will pose a huge uncertainty and threat to the global economy by shaking up the global supply chain," Trade Minister Yoo Myung-hee told a meeting of industry groups on Thursday.
The row exploded late last year when South Korean court rulings ordered Japan's Nippon Steel & Sumitomo Metal Corp. and Mitsubishi Heavy Industries Ltd. to pay hundreds of thousands of dollars to South Korean plaintiffs.
Japan denounced the court verdicts as "unthinkable."
The two countries share a bitter history that includes Japan's 1910-45 colonization of the
Korean Peninsula and the use of comfort women, Japan's euphemism for girls and women, many of them Korean, forced to work in its wartime brothels.
Both sides showed no signs of backing down in the trade dispute.
Kyodo News Agency reported on Tuesday that Japan was considering expanding its export controls to more items bound for South Korea.