Japan cries foul as China slaps 99.2% import duty on key chemical for making computer chips

Japan has lodged a protest against China's new import restrictions on a crucial chemical used in the production of computer chips. The country is currently examining the possible repercussions of the decision on its firms. China has imposed a hefty 99.2% import duty on dichlorosilane, also referred to as DCS, from Japan. The reason behind this action is that Beijing claims the country's domestic industry was adversely affected due to Japan’s exports of this material, which it asserts have breached anti-dumping regulations.

Starting from Tuesday, Japanese companies shipping DCS to China will need to deposit cash equivalent to the stipulated percentage with China's customs authorities. This regulation applies to several Japanese suppliers of DCS, including Shin-Etsu Chemical and Denal Silane. Beijing has indicated that this measure is temporary, pending the outcome of an investigation.

The final decision will be announced later. Tensions between China and Japan have been escalating since November, when then Japanese Prime Minister Sanae Takaichi made remarks that Beijing perceived as provocative. She suggested that Japan might take military action against China if the latter employed military force against Taiwan, an island that Beijing asserts as its own.

In response to these controls, Japan's Chief Cabinet Secretary, Minoru Kihara, has announced that Tokyo would take appropriate measures to prevent any unfair disadvantage to Japanese companies. The Commerce Ministry of China initiated its anti-dumping probe into Japanese DCS as part of several measures against Japan. China has also imposed export restrictions on Japanese firms dealing in dual-use items that can be utilized for military purposes.

DCS plays a pivotal role in a chemical vapor process used in the fabrication of semiconductor logic and memory chips. The global market for DCS is intensely competitive, but Japan currently holds the upper hand as the primary producer of ultra-pure DCS for the manufacturing of computer chips.