Photolithography resin, an essential component in the semiconductor fabrication process, can be thought of as the "pattern maker" of chipsImagine it as the critical medium that transcribes intricate circuit designs onto silicon wafersIf the manufacturing of chips is analogous to constructing a skyscraper, then photolithography resin serves as the architectural blueprint—its accuracy is vital for the entire processHowever, despite its critical importance, a staggering 90% of the global market for this material remains firmly in the hands of Japan.

The Japanese market is dominated by three major players: JSR, Tokyo Ohka Kogyo, and Shin-Etsu ChemicalThis triumvirate has effectively created a monopoly, especially in the high-end photolithography resin sectorTheir stronghold is particularly pronounced in the domain of EUV (Extreme Ultraviolet) lithography resin, which is indispensable for manufacturing cutting-edge chips at 7nm and even 3nm technology nodes.

A significant turning point occurred in 2019, when Japan imposed export restrictions on photolithography resin to South Korea

This action nearly led to disaster for the South Korean semiconductor giant Samsung, resulting in losses amounting to billions of dollarsThe repercussions of this event are still resonating throughout the global semiconductor industry, igniting fears of dependency on Japanese resin supplies.

This situation prompts a crucial question: what would happen if Japan decided to halt its supply to China? The answer appears grim, raising considerable anxiety about the future of China's semiconductor industry, which is currently entwined in a dependency on Japanese resources.

The significance of photolithography resin can hardly be overstatedIts manufacturing isn't simply a matter of producing any resin; it requires achieving extraordinarily high precision and purityA bottle of photolithography resin demands meticulous control over the ratios of photochemical materials, stability, and reaction speed—any deviation from the norm could result in defects

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For example, EUV lithography resin must achieve resolution capabilities at a sub-nanometer level, a feat that is beyond the reach of most nations, yet Japan has been honing this technology since the 1980s, gaining a substantial lead over any potential competitors.

What compounds the situation further is Japan's collaboration with major lithography machine manufacturers like ASML, effectively creating a "bundling effect". Buyers of lithography machines are often required to purchase complementary photolithography resin from the same supplierThis interlocking relationship is akin to that of a lock and key, where both components must perfectly align for the process to function properly, thus shutting out newcomers and allowing Japan to maintain its dominance.

Given the high barriers to entry—including the exorbitant costs associated with developing photolithography resin—many nations are reluctant to engage in this market, especially knowing that the returns on investment might take decades to materialize

The risk inherent in pursuing this advanced technology discourages many would-be competitors.

The implications of a supply disruption from Japan would be significant for China's semiconductor industryCurrently, China is heavily reliant on imports for high-end photolithography resin, with domestic production accounting for less than 5% of its needsA cessation of Japanese resin supplies would cripple the production lines of advanced chips, causing major players like SMIC (Semiconductor Manufacturing International Corporation) and Huawei to face unprecedented challengesSuch a scenario would lead to a ripple effect across the entire electronics supply chain, with the prices of smartphones and computers likely skyrocketing, striking a blow to consumers.

Nonetheless, instead of recoiling in fear from the looming danger of being "choked", China has chosen to push forward with determination

The spirit of innovation and resilience within China's tech community shines brightlyIn the upcoming year of 2024, the Chinese government has pledged to increase funding for semiconductor materials, designating photolithography resin as a critical area for research and development.

The establishment of special funds aims to support Chinese enterprises in their quest to conquer the challenges of photolithography resin development, while concurrently attracting experts from around the world to address the pressing issue of talent scarcity in this highly specialized fieldCollaboration between research institutions and industry players aims to unravel the technological conundrums associated with resin manufacturing.

However, developing photolithography resin is no easy task, necessitating a methodical approachBy May 2024, a breakthrough is anticipated with the introduction of a new type of domestic photolithography resin, dubbed T150 A, developed by the company Tai Zhi Wei

This product boasts a unique formulation, matched closely to the stability of imported counterpartsNonetheless, it currently supports a resolution at the 120nm node, still lagging behind Japan's premium offeringsNevertheless, the progress represented by achieving this milestone is significant—it embodies a pivotal first step from having nothing to possessing a viable product.

The path toward developing photolithography resin will undoubtedly be a lengthy one, influenced significantly by market dynamicsChinese companies are progressively adopting domestic photolithography resin in the display panel and LED chip sectors, gradually accumulating necessary experienceThe long-term objective is clear: over the next five to ten years, China aims to produce its own photolithography resin at the 7nm and 5nm technology nodes, aiming for full self-sufficiency.

The semiconductor landscape is often characterized by the adage "winner takes all; those who fall behind are left unprotected." Consequently, Japan's hold on the photolithography resin market is likely not sustainable in the long run

Concrete initiatives are underway to signal to the global community that China will not perpetually remain at the mercy of foreign suppliers.

Investment in research and development continues to bolster China's aspirations, as the nation expresses its determination to ascend toward technological leadershipThese efforts are not only aimed at meeting local demand but also at penetrating global markets, challenging Japan's monopolistic status.

Combatting challenges is never without difficulty, yet the momentum of China's semiconductor industry cannot be underestimatedHistorically, reliance on imported technology restricted growth, but now, the tide is changingThe tenacity and innovative spirit of Chinese researchers are evident in their ceaseless efforts to not only catch up with but potentially outpace their Japanese counterparts.

The evolution from a complete dependence on foreign sources to creating a fledgling domestic industry marks a significant change, transforming what seemed insurmountable into a tangible possibility