If Japan moves to restrict the export of photoresist – a key material in semiconductor manufacturing – to China, Beijing is prepared to cope with the challenge, and can find both domestic and foreign alternatives to fill the gap, corporate executives and experts said. Recent market speculation suggests Japan may consider restricting exports of photoresist, the light-sensitive “ink” essential for etching microscopic circuits onto silicon wafers, to China. Japan commands over 70% of the global photoresist market. This potential move is viewed as a possible response to China’s latest ban on exporting dual-use items to Japan. However, a chorus of voices from within China’s semiconductor ecosystem is expressing not panic, but a calibrated confidence, underpinned by strategies of domestic substitution and supply chain diversification. Though challenges exist, the immediate reaction from key industry players is one of operational calm. “From the actual situation on the market end, we have not heard of any customer production being affected so far,” Yi Rongkun, General Manager of Xiamen Hengkun New Material Technology Co, a Chinese company involved in photoresist-related business, told China Daily.
Yi said he acknowledges the industry’s proactive mindset, adding, “Of course, the basic consensus within the industry is still to prepare for rainy days and prevent worst-case scenarios.” This sentiment is echoed by sources from leading Chinese chipmakers like Semiconductor Manufacturing International Corp (SMIC) and Huahong Group. Sources from the two companies told China Daily that no current ban exists yet and point to “significant progress” in domestic photoresist production. Jiangsu Nata Opto-electronic Material, which has developed one of China’s first batches of self-developed photoresist for argon fluoride deep ultraviolet (ArF DUV) lithography – a type of high-end photoresist – said the company’s revenue from ArF photoresist exceeded CNY10 million in 2024, and it maintained a stable supply of ArF photoresist in 2025. Financial markets have delivered a bullish verdict on the Chinese photoresist sector’s prospects as shares of several companies in the sector surged on the stock exchanges. This investor optimism reflects a growing belief in the viability and commercial future of China’s semiconductor materials industry, betting that geopolitical pressures will fuel, not cripple, its growth, experts said.
Such confidence stems from what appears to be a multilayered strategic preparation. Roger Sheng, Vice President of Research at Gartner, said: “We believe there must be contingency plans for Japanese chip-related products, if Japan retaliates. For photoresist, materials, and equipment, there must already be alternative substitution plans.” Sheng highlighted diversified options from South Korean suppliers. Additionally, the photoresist that China needs isn’t at the extreme ultraviolet (EUV) level, a harder-to-replace segment. Experts argue that any disruptions would primarily accelerate two existing trends: the rapid development of China’s local photoresist sector and a pivot to alternative foreign suppliers, the China Daily reports.
