An escalating trade dispute between Japan and South Korea could impact some of the worlds leading tech firms, hampering imports of key parts for memory chips and smartphone displays.

On July 1, Japan announced stricter export controls to South Korea on three materials — fluorinated polyamides, photoresists and hydrogen fluoride — used in semiconductor memory chips and smartphones.

At a press conference following the move, Japan’s Chief Cabinet Secretary Yoshihide Suga referenced a recent ruling by a South Korean court ordering Tokyo to compensate Korean forced laborers during the Second World War, the latest in a series of ongoing disputes stemming from Japan’s colonial rule over the Korean peninsula.

South Korea’s top court dismissed an appeal late last year by Japan’s Nippon Steel Corporation against a ruling ordering it to pay around $85,000 in compensation to victims of forced labor.

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While Suga denied the issues were linked, he accused Seoul of repeatedly rejecting “long-standing friendly ties between the countries,” and said that as a result of the court ruling “the relationship of trust has been severely damaged.”

Separately, Hiroshige Seko, Japan’s Minister of Economy, Trade and Industry, said it was “getting difficult to work on export control based on a trustworthy relationship with South Korea.”

In the first quarter of this year, the Korea International Trade Association (KITA) said South Korean firms sourced 94% of fluorinated polyamides, 92% of photoresists and 43.9% of hydrogen fluoride from Japan.

The export controls are a massive headache for South Korean firms Samsung and SK Hynix, who between them control over 63% of the global memory chip market, according to KITA figures.

South Korean President Moon Jae-in said Wednesday that the controls would be a “blow to the economy” and could disrupt global supplies of memory chips. He said his government was working with “extreme determination for the withdrawal of Japan’s unfair export restrictions.”

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“The government is trying its best for a diplomatic solution,” Moon said. “I hope the Japanese government will respond. I hope it will no longer go toward a dead end.”

The president met with business representatives, including from Samsung and LG, on Wednesday in Seoul.

In a statement to CNN, Samsung said it was “assessing the current situation and reviewing a number of measures to minimize the impact on our production.”

The South Korean Ministry for Trade, Industry and Energy has accused Japan of violating World Trade Organization (WTO) regulations and called for bilateral talks to take place Friday.

Kotaro Nogami, Japan’s deputy cabinet secretary, pushed back against these claims, saying there was no indication the restrictions were in violation of WTO rules and said they were “necessary for the proper operation of the export control system for security.”

He said Japanese officials would hold “working level meetings” with their South Korean counterparts but insisted withdrawing the measures was not under consideration.

While Japan and South Korea are part of a key security relationship, along with the United States, guarding against North Korea and Japan, the history of Japanese colonialism on the peninsula has caused issues in the past.

In 2017, Japan pulled some diplomats from South Korea over a spat concerning recognition of so-called “comfort women” who were abused by Japanese troops during the Second World War.

Tokyo and Seoul have also found themselves at odds over how to deal with North Korea, with Moon leading the drive for rapprochement and an official peace treaty ending the Korean War, and Japanese Prime Minister Abe Shinzo being one of the fiercest critics of Pyongyang.

Following the announcement of the export controls, South Koreans have called for a boycott of Japanese travel and consumer products, with more than 36,000 also signing a petition to the government calling on it to take retaliatory action against Tokyo.