Japan protested Tuesday against Chinese controls that will limit its exports of a key chemical used to make computer chips, saying Tokyo is studying the potential impact on Japanese companies.
China imposed the curb on imports of dichlorosilane from Japan — also known as DCS — saying its exports of the material have violated anti-dumping regulations and harmed China's domestic industry. Beginning Tuesday, companies importing the compound from Japan must provide cash deposits to China's customs at rates of up to 99.2%. The measure applies to Shin-Etsu Chemical and Denal Silane, among other Japanese exporters of DCS.
Beijing says the measure is provisional as an investigation continues; a final ruling will come later. DCS is used in a chemical vapor deposition process to put thin layers of silicon, oxide, or other films in semiconductor logic and memory chips. The global DCS market is highly competitive, but Japan is the leading producer of ultrapure DCS for computer chip fabrication — which is why this measure has drawn industry attention.
This is not the first high-tech materials clash between China and Japan. Ties have been strained since November, when Japanese Prime Minister Sanae Takaichi angered Beijing by suggesting Japan's military could intervene if China used military force on Taiwan. As part of various countermeasures against Japan, China's commerce ministry launched its anti-dumping probe into Japanese DCS, and Beijing has also imposed export controls on Japanese firms for dual-use items that can be used for military purposes.
In Tokyo, Japan's top government spokesperson, Chief Cabinet Secretary Minoru Kihara, protested the controls and said Tokyo would "respond appropriately" to avoid unfair harm to Japanese companies.
The episode reflects yet another facet of the geopoliticalization of the chip supply chain. Over the past few years, the US has led export controls on advanced chips and equipment to China; now China is activating chipmaking materials as a countermeasure — from gallium, germanium and graphite to dichlorosilane, Beijing's leverage over critical minerals and materials is being gradually activated. DCS may be less famous than lithography machines, but it is an indispensable "invisible material" in chip manufacturing. When even such materials become bargaining chips, the trend of "every link of the global semiconductor supply chain can be politicized" grows ever more apparent.
For the chip industry, the practical impact of this measure will depend on the investigation's final outcome. But one thing is certain: amid the broader US-China tech contest, this clash between China and Japan adds another layer of uncertainty to an already fragile global semiconductor supply chain.