According to a blogger’s analysis, a handful of Japanese companies control more than 90 percent of the global high-end photoresist market, including EUV photoresists crucial for producing the most advanced chips. In China, over 90 percent of the KrF and ArF photoresists used for mainstream chip manufacturing are imported from Japan.
The blogger noted that if Japan were to actually implement a “neck-cutting” restriction on photoresists to China, China’s manufacturing—from smartphones to artificial intelligence—could face a “no rice to cook with” dilemma.
This is no small matter. More than 70 percent of the world’s photoresists are controlled by Japan; for EUV photoresists used in chips below 7nm, Japan provides 100 percent of the supply. In short, 90 percent of China’s high-end chip materials are dependent on Japan.
“Japanese companies Shin-Etsu Chemical and JSR monopolize over 50 percent of the global photoresist market, with Japanese firms controlling more than 95 percent of high-end EUV photoresists. China’s overall import of photoresists relies on Japan for 80-90 percent. In 2023, Japan halted production citing ‘supply chain instability.’ By October 2025, Japan formally imposed punitive tariffs of up to 25 percent on 19 types of key semiconductor materials. Against this backdrop, in November, Shin-Etsu’s exports to China plunged 42 percent month-on-month.”
The blogger stated that China now has more than 1,200 EUV lithography machines, 90 percent of which rely on after-sales support from Japan’s Canon and Nikon. In November 2025, Canon and Nikon further tightened services for China, in coordination with Japan’s policy of case-by-case approvals and restrictions on spare parts exports. This has once again “cut China’s supply chain at the neck.” Chinese industry estimates that current spare parts inventory for lithography machines can only last about 3–6 months. If Japan continues to cut off supply, China’s foundries such as SMIC and Hua Hong Semiconductor could face significant production pressure.
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Why restricting photoresists would cause panic
Why would Japan restricting photoresists to China cause panic among the Chinese authorities? Because photoresists and lithography machines are core equipment and materials for chip production, and this is precisely a critical link that Beijing relies on heavily but cannot replace in the short term.
Japan also holds key technology in DUV (Deep Ultraviolet) lithography machines, typically used for 90nm, 40nm, and 28nm chips, which are crucial in mobile phone chips, automotive chips, home appliances, and other electronics.
Analysts therefore suggest that if Japan actually tightens photoresist supply to China, it would not only impact China’s advanced processes but could also affect automotive chips, home appliances, power management, and even 4G base station chips for civilian use.
The reason this alarms the Chinese authorities is that domestic manufacturers can only provide relatively low-end i-line lithography technology, while advanced technologies like ArF and ArF immersion still depend entirely on imports. Some have pointed out that if the core of lithography is “drawing” circuits on chips, China’s current technology is like a pencil—able only to draw simple, low-resolution lines.
Experts predict that if China lacks Japanese lithography materials, its semiconductor production capacity could regress by five to ten years.
Chinese chip industry is highly dependent
Globally, the most advanced lithography machine company, Dutch ASML, also restricts exports to China. Chinese authorities are highly dependent on ASML’s technology. If Japan fully restricts photoresist exports, it would create a “U.S., Japan, Netherlands” iron triangle blockade against Beijing, effectively paralysing China’s semiconductor industry.
The current situation is a silent irony for the Chinese government. From 2014 to 2024, Beijing invested over 300 billion RMB through the so-called “Big Fund Phase I and Phase II” to solve the “neck-cutting” problem in chip manufacturing. Yet true breakthroughs in chip production have not been achieved. China still relies heavily on foreign suppliers for chip design software (EDA), manufacturing equipment, and materials.
On July 14, 2025, the independent Washington think tank Center for Security and Emerging Technology (CSET) reported that ASML (Netherlands) and Nikon (Japan) dominate China’s lithography machine market.
From 2019 to 2024, domestic supply in China almost saw zero growth. Only Shanghai Micro Electronics Equipment Co., Ltd. (SMEE) holds a 4 percent share in the low-end i-line lithography market. By contrast, ASML’s market share in China reached 79 percent, with Japanese companies at 17 percent, ranking second.
The CSET report notes that by the end of 2024, Chinese companies have made slow progress in lithography machines, chemical-mechanical polishing, thin-film deposition, packaging and testing, etching, and cleaning tools, remaining heavily dependent on foreign suppliers. TechInsights’ data from May 2025 is even more revealing: in 2024, China purchased $41 billion in semiconductor equipment, accounting for 40 percent of global sales, but domestic equipment only made up 11.3 percent.
Although China’s attempts to steal technology have drawn foreign criticism, such methods cannot solve core technical problems. Industry insiders say lithography machines are a complete nano-industrial system; building one requires every component and part to meet nanometer-level precision.
Chinese experts also point out that simply throwing money at lithography machines cannot close the gap. Science requires creativity, which needs interest and a tolerant environment for trial and error. Treating science as a task backfires. Some technologies, like aerospace engines, chips, and lithography machines, cannot be copied just from samples.
Japan restricts supply to 42 Chinese companies
On Nov. 19, 2025, Japanese companies Canon and Mitsubishi Chemical stopped supplying key photoresist consumables to Chinese tech firms, withdrew service teams, and ceased relevant repair services in China, potentially affecting some production lines.
In November 2025, Japan’s Ministry of Economy, Trade and Industry (METI) placed 12 core semiconductor materials—including high-end ArF/EUV photoresists—on its export control list, restricting supply to 42 Chinese companies.
Specifically, Japanese companies such as Tokyo Ohka Kogyo and Shin-Etsu Chemical have suspended deliveries of photoresist raw materials to certain Chinese clients.
A domestic industry media report said: “Canon, Nikon, and Sumitomo Chemical have collectively stopped supplying core photoresist materials to mainland China and suspended lithography machine maintenance services.”
Some netizens joked: “In response, Japan withdraws all lithography and photoresist operations in China, and China withdraws two pandas.”
The Chinese authorities, facing Japan’s chokehold on photoresists, can only sarcastically say: “Japan will soon have no giant pandas; the last two pandas traveling in Japan are about to return home.”
Recently, Chinese Foreign Minister Wang Yi made a “wolf warrior” statement, claiming Japanese Prime Minister Sanae Takaichi “crossed a line” and that China “has the right to settle historical scores with Japan.” Amid rapidly declining China-Japan relations, Beijing also issued a travel warning to its citizens against visiting Japan, citing safety concerns. Airlines began offering free ticket refunds, with reports of 491,000 Japan-bound tickets canceled.
In reality, however, the situation embarrassed China. Chinese tourists remain a major source of Japanese tourism. In the first three quarters of 2025, 7.48 million Chinese visited Japan. According to Japan’s Asahi Shimbun, after the travel warning, passengers from Shanghai Pudong International Airport to Japan on Nov. 15 continued to flow steadily, with a relaxed atmosphere.
‘Not interested in politics’
A young couple in their 30s said they knew about the Foreign Ministry’s advisory but had no intention of changing their Japan trip and were “not interested in politics.”
A recent Chinese college graduate said: “Japan makes me feel very safe. Even if I could get a full refund on my ticket, I wouldn’t change my plans.”
Another woman said: “The Foreign Ministry issued a Japan safety warning, and there were long queues at Pudong Airport. The Chinese Embassy repeatedly warned citizens to avoid risk, but the airport was crowded with travelers dragging suitcases and traveling in groups—it was beyond imagination.”
Ironically, despite China’s official calls to avoid traveling to Japan, many families happily flew there. A Chinese man explained:
“It’s because the experience in Japan is excellent. In both tourist spots and cities, all goods are fairly priced. The service is excellent—you can experience the kneeling-style Japanese service. A friend told me that he accidentally spilled coffee in a cafe. The staff said, ‘Sir, let me replace it, sorry about that.’ Even though it was his fault, the Japanese blamed themselves for imperfect service.”
He added that Japan has a great environment—people bring their trash home, and even in subways, nobody speaks loudly on the phone, everyone wears headphones.
However, China’s travel restrictions did reduce the number of Chinese tourists to Japan somewhat. Japanese media veteran Akio Yaita shared on Facebook that China’s travel warnings caused many Chinese to cancel trips, leaving previously crowded spots suddenly quiet. Taiwanese tourists, however, became highly visible. Travel demand from Taiwan to Japan “soared” after tensions. Many flights from Taiwan to Japan are now fully booked.
Japanese businesses particularly appreciated Taiwanese tourists for being orderly, friendly, and consistent consumers. Some Japanese businesses said that while fewer Chinese tourists affected revenue, the support from Taiwanese travelers was very encouraging. Local governments also actively targeted the Taiwanese market, offering traditional Chinese guides, Taiwan-specific promotions, and even organizing promotions in Taiwan, showing sincerity.
In summary, China has “shot itself in the foot,” angering Japan and facing a chokehold on photoresists. Yet despite the diplomatic turmoil, well-off Chinese citizens continue to travel to Japan, while Japanese-Taiwanese relations have been strengthened. This situation validates the old saying: “Those who follow the right path gain help; those who lose it gain little.”
