Chinanews on July 17 According to South Korea's Joongang Ilbo newspaper, after Japan's export sanctions chip, what will be the next chip? Analysts say cars and machinery could be the next targets if Japan expands its battle lines beyond a sophisticated attack on South Korea's semiconductors.

"It is very likely that Japan will increase the pressure level through additional sanctions," Liu Seung-min, head of investment strategy at Samsung Securities in South Korea, said July 16. The target may be industries with a high dependence on Japan and a great impact on Korean exports ". He stressed that "if the first target is South Korea's core industry of semiconductors, the next target could be things like cars and machinery".

Samsung Securities analyzed the statistics of the Customs Office last year, showing that the dependence of relevant industries on Japan (the proportion of Japan's imports) was 11.8% for automobiles, 32.3% for special-purpose machinery and 18.7% for general-purpose machinery. By contrast, the daily dependence of semiconductors was 8.3 percent.

That is why Japan is targeting cars and machinery next, the report said. That could also reduce the pressure on Japan, analysts say. "Compared with semiconductors, cars and machinery have less impact on the global supply chain and can avoid international criticism," says Mr Liu.

In particular, Japan's decision on July 18th to remove South Korea from its "white list" of favoured countries for strategic exports (friendly countries on security) would deal a blow to big south Korean companies that mainly supply parts and materials from Japan.

According to Hana Financial's analysis of 30 major listed companies, 52 of Samsung's 1,042 component suppliers are Japanese (5 per cent). Hyundai Motor (39 versus 7.7%) and Kia Motors (21 versus 6.6%) had more than 5%.

LG Innotek accounted for the largest share of listed companies analyzed, with 21 Japanese companies, or 15.8 percent, out of 133 component suppliers. LG Chemical also has 9.1%(12) Of its 132 component companies in Japan.