The US–Iran war hit the chip market, causing a shortage of materials for lithographic processes

Impact of the conflict in the Middle East: semiconductor chemical supply chain in Japan and South Korea

1. The problem goes beyond gas and helium

Military actions in the region not only disrupt natural gas flow but also create serious disruptions in the delivery of key chemicals needed for chip manufacturing.

2. Who is affected?

- Japanese photoresist suppliers (Shin‑Etsu Chemical, Tokyo Ohka Kogyo, JSR, Fujifilm, Nissan Chemical) are facing solvent shortages.
- Their clients – major South Korean chip makers Samsung Electronics and SK hynix – have already been warned of potential delays.

3. Which chemicals are in short supply?

- Methyl ether of propylene glycol (MEPG)
- Propylene glycol acetate monomethyl ether (PGA‑Methyl Ether)

These components are used in photoresist coatings, anti‑glare substrates and adhesive mixtures for HBM memory and other high‑tech chips.

4. Reason for the shortage

Disruptions in the supply of ligroin – an Iranian petroleum product that previously supplied 40 % of Japan’s chemical industry via the Middle East.
- Half of the 12 Japanese ligroin refineries had to cut output.
- Propylene oxide (the base for solvents) became scarce, and raw material prices in Japan have almost doubled since early March.

5. Ways forward

Japanese manufacturers are forced to seek new sources: through South Korea or China. However, changing suppliers requires re‑certification of finished products – a process that can take up to a year.

6. Korean response

Korean companies specializing in semiconductor chemicals are less dependent on Middle Eastern raw materials and can obtain solvents from the US as well as China. This gives them an opportunity to turn the situation to their advantage.

Conclusion:

Military events in the Middle East are breaking the supply chain of key chemicals for Asia’s semiconductor industry. Japanese producers face solvent shortages, while Korean players see a chance to strengthen their positions through diversification of raw material sources.