Major Japanese suppliers of photoresist, a crucial chemical in chipmaking, have warned South Korean chip giants Samsung and SK Hynix of disruptions to raw materials procurement, amid disruption caused by the Middle East conflict.
The warnings, reported by South Korean media outlet TheElec, come as the effective closure of the Strait of Hormuz interrupts supplies of naptha, a key feedstock for chemicals used in semiconductor production including photoresist.
The issue highlights the vulnerability of the supply chains used by semiconductor manufacturers in Asia, where most of the world’s chips are produced.
Advanced chip production
Naptha is produced during the refining of crude oil and natural gas, and is particularly critical to the production of advanced chips for uses such as AI acceleration.
Advanced production processes relying on extreme ultraviolet (EUV) lithography are expected to be the most affected by naptha shortages, due to the sensitivity and light tolerances of such processes.
Japanese producers dominate the world photoresist market, with lead suppliers JSR, Tokyo Ohka Kogyo, Shin-Etsu Chemical and Fujifilm accounting for 76 percent of the global market in 2023, according to data from the China Electronics Materials Industry Association.
Shortages of PGME and PGMEA, solvents chemically refined from naptha, are set to affect process nodes using EUV tools, although chipmakers are understood to have weeks to months’ worth of backup inventory.
Raw materials
Taiwan, home of contract chipmaking giant TSMC, and South Korea are the world’s largest photoresist markets.
Chip production in mainland China is believed to be less vulnerable to supply chain disruptions, due to its reliance on more mature process nodes and its reliance on domestic suppliers, according to analysts cited by the South China Morning Post.
Chinese chipmakers have relied on less advanced chipmaking tools to produce even their higher-end chips, as machines using EUV processes are unavailable for sale in the country.
