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China’s 99% Chip Move Puts Japan Under Pressure — Transcript

by Cross World News · 1,686 words · 320 segments · language en · Watch on YouTube

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0:04China and Japan are facing a new source
0:07of economic friction and this time the
0:09dispute reaches directly into one of the
0:12most strategically important industries
0:14in the world, semiconductors. At the
0:16center of the issue is a chemical most
0:18people outside the technology industry
0:20rarely hear about. Dicchloroane,
0:23commonly known as DCS. It may sound
0:25obscure, but DCS plays an important role
0:28in semiconduct manufacturing. Highly
0:30purified versions are used during thin
0:32film deposition processes involved in
0:35producing logic chips, memory chips,
0:37analog chips, and other semiconductor
0:39products. Now, China has introduced
0:41provisional measures that could make
0:43Japanese DCS considerably more expensive
0:46for Chinese buyers. On September 7th,
0:49China's Ministry of Commerce announced
0:51the preliminary findings of an
0:53anti-dumping investigation into DCS
0:55imported from Japan. Starting September
0:588th, Chinese importers bringing the
1:00material in from Japanese suppliers
1:03became required to provide cash deposits
1:06to Chinese customs. Arms at rates
1:09ranging from 80.8% to 99.2%.
1:13For Shinitzu chemical, one of Japan's
1:15major chemical producers, the deposit
1:18rate was set at 99.2%.
1:21For Dal Sain, the figure was set at
1:2380.8%. For other Japanese suppliers
1:27covered by the decision, the rate is
1:29also 99.2%.
1:31That distinction matters. The measure is
1:33not yet a final permanent tariff and it
1:36is not a complete prohibition on
1:38Japanese DCS entering China. It is a
1:41provisional cash depositor requirement
1:43imposed while Beijing continues its
1:46investigation. But commercially, a
1:48deposit approaching the full customs
1:49value of a shipment can create enormous
1:52pressure. For Chinese semiconductor
1:54manufacturers, buying Japanese DCS may
1:57suddenly require substantially more
1:59capital at the border that can make
2:00alternative suppliers more attractive
2:02and could weaken the competitiveness of
2:04Japanese producers inside the Chinese
2:07market. For Japan, the issue touches
2:09something much larger than the sales of
2:11one specialized chemical. Prime Minister
2:13San Takai has made semiconductors,
2:17artificial intelligence, and economic
2:19security important elements of her
2:21broader growth strategy as of September
2:2419th, 2026.
2:26Tokai remains Japan's prime minister.
2:29She carried out a cabinet reshuffle on
2:31September 17th with the reshuffled
2:33second Taiichi cabinet taking office
2:35that day. China meanwhile continues to
2:37be led by President Xi Jingping who was
2:40publicly carrying out presidential
2:42duties as recently as midepptember.
2:45So what appears at first glance to be a
2:48technical trade case involving one
2:50industrial chemical is unfolding against
2:52a much wider competition over technology
2:55supply chains and economic security.
2:57China says his decision comes from a
2:59formal anti-dumping process. The
3:02Ministry of Commerce launched the
3:03investigation on January 7th, 2026
3:07after receiving an application from
3:09China's domestic industry. The
3:11investigation covered imports
3:12originating in Japan and examined
3:15whether Japanese DCS was being sold into
3:17the Chinese market under conditions that
3:20armed domestic producers. According to
3:23China's Commerce Ministry, evidence
3:24submitted when the investigation began
3:26indicated that Japanese DCS imports had
3:29generally increased between 2022 and
3:312024. While prices had fallen, a
3:34Commerce Ministry spokesperson said the
3:36volume of dicroylane imported from Japan
3:39showed an overall upward trend.
3:41Beijing's preliminary September decision
3:44went further. Chinese investigators said
3:46they had preliminarily determined that
3:48dumping had occurred, that China's
3:50domestic DCS industry had suffered
3:52material harm and that there was a
3:54causal relationship between the imports
3:56and that harm. China says the process is
3:58being conducted according to its
4:00anti-dumping regulations and applicable
4:03international trade rules. Beijing has
4:06also emphasized that interested parties
4:08have opportunities to submit comments
4:10before final determination is reached.
4:13Tokyo strongly disagrees with the
4:14direction China has taken. Japan's
4:17government protested the measures and
4:19began exami ning what they could mean
4:21for Japanese companies. Chief cabinet
4:24secretary Minor Kihara remains in that
4:26position following Taiiki's latest
4:28cabinet reshuffle. Kihara said, "We will
4:31fully examine their impact and respond
4:34appropriately to ensure there is no
4:36undue disruption to business
4:37activities." That statement captures
4:39Tokyo's immediate concern. The Japanese
4:42government does not simply want to know
4:44whether individual chemical producers
4:46lose orders. Officials are looking at
4:48how these measures could fit into wider
4:51economic relations between Japan and
4:53China, particularly when technology and
4:56economic security have become
4:58increasingly connected to diplomacy.
5:00Biosay Akazawa also remains Japan's
5:03minister of economy, trade, and industry
5:05following the September 17th reshuffle.
5:08The Japanese prime minister's office
5:10lists him in that post in the current
5:12cabinet. A Kazawa has separately
5:15criticized Chinese restrictions
5:17targeting dual use trade with Japan
5:20arguing that country specific controls
5:22are incompantent with normal
5:25international trade practices. That
5:27broader dispute is important because the
5:29DCS case did not emerge in isolation.
5:32Relations between Tokyo and Beijing have
5:34been strained by several issues,
5:36particularly Taiwan. Tensions increased
5:38after Taraki made remarks in 2025
5:42concerning circumstances in which a
5:44major crisis surrounding Taiwan could
5:46have implications for Japan's security
5:48framework. China strongly objected to
5:50those remarks. Beijing regards Taiwan as
5:53part of China and opposes foreign
5:56involvement in the issue. Japan while
5:58maintaining its established diplomatic
6:00framework toward Beijing and Taiwan has
6:03increasingly emphasized the importance
6:05of stability across the Taiwan Strait.
6:08The disagreement has become part of a
6:10wider deterioration in political and
6:13economic relations. Chinese authorities
6:15have tightened controls involving some
6:17dual use items connected to Japan while
6:20Tokyo has repeatedly called for those
6:23restrictions to be withdrawn. Reports
6:25surrounding the DCS decision have
6:27therefore raised questions in Japan over
6:30whether the the semiconductor material
6:32dispute should be viewed purely as an
6:34anti-dumping case or within that larger
6:36political environment. Beijing presents
6:38a different explanation. China's
6:40official position is that the DCS
6:42investigation began after an application
6:44from its domestic industry and that
6:46investigators examined pricing, import
6:49volumes, and harm to Chinese producers
6:51under established trade remedy
6:53procedures. That difference in
6:54interpretation is crucial. Tokyo is
6:57looking at the cumulative effect of
6:59Chinese trade restrictions involving
7:01Japan. Beijing says the DCS measure
7:03comes from a specific commercial
7:05investigation. Those two explanations
7:07now exist side by side as the case moves
7:10toward a final decision. And DCS matters
7:14because semiconduct manufacturing
7:16depends on extremely precise materials.
7:18Modern chips are built layer by layer
7:20through a series of highly controlled
7:22processes. DCS can be used to deposit
7:25thin films involving silicon and related
7:28materials onto semiconductor wafers.
7:30China's comet wafers. China's commerce
7:33ministry itself describes the chemical
7:35as being used in processes for producing
7:38logic chips and other semiconductor
7:39products. When working at advanced
7:42manufacturing tolerances, purity becomes
7:44extremely important. A semiconductor
7:47factory cannot simply replace a
7:49specialized high purity material
7:51overnight without technical
7:52qualification, testing, and confidence
7:55that the substitute will behave
7:57consistently within the production
7:58process. Japan has long developed major
8:01strengths in semiconductor materials and
8:04manufacturing equipment.
8:06>> [music]
8:06>> Japanese companies may no longer
8:07dominate finished semiconduct adoption
8:10in the way Japan did several decades
8:12ago, but they remain highly important in
8:15portions of the supply chain that chip
8:17factories around the world depend upon.
8:19That is part of what makes the DCS
8:21dispute significant. The pressure is not
8:23occurring at the consumer end of the
8:25technology industry. It is appearing
8:28upstream at the level of the specialized
8:30materials required before a finished
8:32processor or memory device can even
8:34exist. The immediate financial burden
8:37falls on importers bringing covered
8:39Japanese DCS into China. But the
8:42commercial consequences can travel in
8:44both directions. A Chinese chipmaker
8:46facing a very large deposit requirement
8:48may ask a Japanese supplier to reduce
8:50its price. It may reduce purchases. It
8:53may look toward another foreign supplier
8:55or it may accelerate efforts to qualify
8:57a domestic Chinese alternative. For
9:00Japanese exporters, that creates the
9:02possibility of losing market share even
9:04if shipments remain legally permitted.
9:07For Chinese semiconductor companies,
9:09however, switching sources is not
9:11necessarily simple. Different chemical
9:13suppliers may provide products with
9:15different purity levels, manufacturing
9:17consistency, and technical
9:18characteristics. Semicandidac
9:21manufacturers generally need to qualify
9:23materials before integrating them fully
9:25into products iron. That means Beijing's
9:28measure could create both an opportunity
9:30for Chinese suppliers and a challenge
9:31for Chinese customers that rely on
9:34established Japanese products. This is
9:36where the dispute becomes part of the
9:39broader struggle over a semiconda
9:41self-sufficiency. China has spent years
9:43trying to strengthen its domestic
9:45semiconductor ecosystem covering
9:47everything from chip design and
9:49fabrication to equipment, chemicals, and
9:51other materials. Japan is pursuing its
9:53own semiconductor revival under Takai.
9:56Tokyo has openly placed AI and
9:58semiconductors among the strategic
10:01fields where the government wants major
10:03public and private investment. Japan's
10:05Ministry of Economy, Trade and Industry
10:07has said the government intends to
10:08encourage capital spending and research
10:10in fields including AI and
10:12semiconductors while strengthening
10:14domestic production capacity. Rapidist
10:17the Japanese semicondict to venture
10:19seeking advanced chip production
10:21capabilities remains one of the most
10:23prominent examples. The Tichi government
10:25has described the project as part of its
10:28attempt to rebuild Japan's position in
10:30leading edge semiconductor
10:31manufacturing. Tokyo strategy is not
10:34only about producing chips. Japan's
10:36revised semiconta and digital industry
10:39strategy also focuses on building an
10:41ecosystem connecting data, AI models,
10:44computing infrastructure,
10:46communications, electricity, skilled
10:48workers, security and semicond
10:50manufacturing. METI published its latest
10:52revision in June 2026. That means supply
10:56chain resilience has become a central
10:58economic issue for Takai Kichi. uh
11:01government is trying to convince
11:02businesses that Japan can remain a
11:04dependable location for advanced
11:06technology investment. It is also trying
11:08to reduce vulnerabilities in
11:10strategically important industries. The
11:12DCS dispute demonstrates how difficult
11:15that task can be. Japan may possess
11:17advanced technology and worldclass
11:19materials producers, but those companies
11:22still depend on international markets.
11:24China remains a massive manufacturing
11:27economy and a major semiconductor
11:29market. If political or commercial
11:32disputes make access to that market more
11:34difficult, Japanese companies have to
11:36decide whether to absorb the
11:37consequences, redirect sales elsewhere,
11:40or adapt their production strategies.
11:43China faces a parallel calculation.
11:45Beijing wants stronger domestic
11:47technology supply chains and less
11:50dependence on foreign sources. At the
11:52same time, Chinese manufacturers still
11:54benefit from access to specialized
11:56products made by Japanese, American,
12:00European, South Korean, and other
12:02international suppliers. Moving too
12:04quickly away from established suppliers
12:06can create additional costs or technical
12:09challenges. So, both countries are
12:11trying to achieve a difficult balance.
12:14Japan wants greater resilience without
12:16losing access to the Chinese market.

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