SEOUL -- Taiwan's GlobalWafers, the world's third-largest maker of silicon wafers for microchips, on Friday began operating a roughly $450 million factory in South Korea that the government in Seoul hailed for reducing the country's reliance on Japanese suppliers.
South Korean President Moon Jae-in was on hand for the opening ceremony at the plant, which is expected to mainly supply top Korean chipmaker Samsung Electronics.
Moon's presence attested to the importance Seoul places on GlobalWafers' investment at a time of heightened trade tensions with Japan.
The factory, located in the central province of South Chungcheong, will lower South Korea's dependence on Japanese-made wafers 9 percentage points from 50%, the Moon government said in a statement.
The semiconductor industry is caught in a row between South Korea and Japan that sprang from lingering disagreement over compensating wartime laborers.
In July, Tokyo announced tighter export rules on three crucial types of semiconductor materials in which Japanese suppliers hold large market shares, prompting Seoul to step up efforts to promote domestic alternatives.
While wafers are not among these exports, Japanese suppliers such as Sumco and Shin-Etsu Chemical collectively hold about 60% of the global wafer market. South Korean rival SK Siltron lags at about 10%.
There have been concerns in South Korea that wafers may be added to the export control list.
For Japanese makers, South Korea's efforts to diversify its semiconductor industry's supply base raise the risk of lost business from Samsung, an important customer.
GlobalWafers' new factory is the second production facility at the South Chungcheong site, run by local subsidiary MEMC Korea. The Taiwanese company also has factories in the U.S., Japan, Malaysia and Italy.