SK Hynix, the world’s fourth-largest semiconductor manufacturer, is using Korean etching gas in its chip production line in a move toward multiple sourcing of critical materials that had been heavily dependent on Japan, Asia Times has learned.

Global memory chip leader Samsung Electronics also started using substitutes from September for some processes that had previously relied upon Japanese etching gas.

The moves suggest that apocalyptic reports about disruptions to the global supply chain of electronic products predicted in July – when Tokyo announced it was placing regulatory restrictions on the export of three key chemicals critical to Korea’s semiconductor industry – were over-wrought.

The Japanese moves had come amid a spiraling conflict between Seoul and Tokyo over historical issues that has impacted diplomacy, trade and security. Relations between the two neighbors are widely assessed to be at their lowest point in recent history.

But while the capitals squabble, business, it appears, continues.

“We finished testing Korean-made etching gas in fluid form, and started injecting the material into some production processes from October 1,” an SK Hynix official told Asia Times on Tuesday.

In another positive sign, SK Hynix also received its first approval to import Japanese etching gas, according to an industry official who spoke to Asia Times.

Etching gas is essential in the manufacturing of semiconductors and display panels. It comes in liquid and gas form.

“As Korean materials are used, and imports of Japanese materials continue, semiconductor production is not likely to be disrupted as opposed to initial concerns,” an industry source said.

Samsung Electronics and Hynix, the two major Korean manufacturers, have tested a range of etching gas products from multiple sources, after Japan toughened its export procedures.

“I understand that there are concerns about the supply of etching gas, but in fact, there are many substitutes,” another industry insider told Asia Times last month.

Even so, processes are not entirely straightforward. “Chipmakers have to fine-tune their manufacturing processes to utilize new etching gases while maintaining the yields and quality of their products, so they continue to rely on Japanese materials,” the insider explained.

The export restrictions by Tokyo place a bureaucratic burden on related firms. They require Japanese chip and display material manufacturers to obtain individual approvals from the Japanese government when they export to Korea etching gas, fluoride polyimide, which is used in displays, and photoresist, which is used in the EUV (extreme ultraviolet) process to fabricate semiconductor substrates.

Even so, since the tightened regulations, the Japanese government has issued several export licenses for etching gas and photoresist for EUV.

Samsung has also secured imports of photoresist for EUV through a joint venture established in Belgium by Japan’s JSR. Industry experts said that Samsung is also testing locally-made photoresist, but, it would take time to secure the same quality as Japanese products.

Although imports of critical materials from Japan have not ceased, Korean chipmakers continue to diversify their supply chains for parts and materials because of the industry’s awareness of the need for multiple sourcing.

“We will continue to push for multiple sourcing, including local products, because now it has become clear that we need to do it,” an industry source said. “But, we will not exclude Japanese products.”