The global semiconductor industry has learned in recent years that a supply chain doesn’t break only when a major factory fails or an EUV machine is delayed. Sometimes, the problem starts much earlier—in the petrochemical base. That is precisely what is beginning to raise concerns now in Asia: energy tensions around the Strait of Hormuz are impacting crude oil and naphtha supplies, and this impact is already starting to transfer to essential chemical materials used in chip manufacturing.
The most serious warning came from South Korea. The specialized publication The Elec reported this week that Japanese manufacturers of photographic materials for semiconductors had started to inform clients like Samsung Electronics and SK hynix about problems securing raw materials linked to two very specific solvents: PGME and PGMEA. According to the source, the situation affects the photoresist chain and other critical materials used in lithography processes.
This alert should not yet be interpreted as an immediate shutdown of chip factories, but rather as a sign of real risk. Japan remains a dominant player in many advanced process materials, and any sustained disruption in its petrochemical base could eventually escalate in Korea, Taiwan, the United States, or Europe.
The problem isn’t with the chip itself, but with the solvent
PGME and PGMEA are not well-known outside the sector, but their industrial roles are highly significant. The Elec points out that both are used as solvents in photoresist, thinner, BARC, SOH, and temporary adhesives for encapsulated HBM. In other words, they are not marginal materials: they are part of the chemical block that enables the preparation, application, adjustment, and removal of layers in photolithography and advanced packaging.
That introduces a critical factor: much of these materials arrive on the market from Japanese suppliers that hold structural importance in the semiconductor supply chain. The Korean report cites companies like Shin-Etsu Chemical, TOK, JSR, Fujifilm, and Nissan Chemical, all well-known for photochemicals and specialized materials for wafers and memory.
The bottleneck, according to this information, originates in the petrochemical sector. The shortage of naphtha and reduced availability of propylene are believed to have started affecting the production of propylene oxide and, by extension, PGME and PGMEA. The Elec also states that several Japanese naphtha cracking plants have reduced activity, and the spot price of Japanese naphtha soared from around $600 per ton before the blockade to about $1,190 in early April. This figure has not been independently verified entirely, but it aligns with the intense energy stress described by other sources.
Hormuz again proves to be a critical global hotspot
The severity of this episode is better understood when looking at the energy map. The International Energy Agency (IEA) notes that in 2025, approximately 20 million barrels per day of crude and petroleum products pass through the Strait of Hormuz—about a quarter of the world’s maritime oil trade—and that 80% of those flows are destined for Asia. The IEA emphasizes that Japan and South Korea are especially dependent on this corridor.
Additionally, Japan has a known structural vulnerability. Its Ministry of Economy, Trade, and Industry (METI) states in its latest energy report that Japan relies on > 90% of its crude oil from the Middle East. METI also admits that naphtha is an essential input for a wide range of chemicals and industrial products.
Reuters provided another important piece of the puzzle. In mid-April, it reported that Japanese companies heavily reliant on naphtha had begun stopping orders or cutting production, with manufacturers of thinners and other derivatives adjusting deliveries and raising prices. The agency also noted that Japan previously obtained about 40% of its naphtha from the Middle East and that some wholesalers had halved their supplies for April due to uncertainties about May.
The risk to chip production exists, but no total collapse yet
It’s important to differentiate between extreme headlines and verifiable reality. Yes, there is a serious risk to the semiconductor materials supply chain if energy disruptions continue. Yes, Japan is a critical source of high-purity photochemicals and solvents. And yes, Korean and Japanese manufacturers are exploring alternative sources. But there’s no public evidence that the global chip industry will “shut down almost completely” immediately. What exists is a risk of progressive tightening of hard-to-replace materials, especially those that are difficult to rapidly requalify.
This nuance is important. METI officially states that Japan has supplies equivalent to around four months of domestic naphtha consumption, considering inventories, domestic refining, and imports from regions outside the Middle East. The ministry also emphasizes that, for now, there is no total shortage.
The issue lies in quality and industrial certification. The Elec explains that if a Japanese supplier replaces PGME or PGMEA of local origin with product from Korea or China, manufacturers like Samsung or SK hynix would need to go through a Product Change Notification (PCN) process or a notified process change. The typical timeline is about one year, which could extend further for advanced nodes. In a market that depends heavily on HBM memory, AI, and production schedules, that time frame is substantial.
An uncomfortable reminder for the entire industry
The core lesson is quite uncomfortable for the tech sector. While public debate often centers on 2 nm nodes, HBM4, or 3D packaging, part of the system still depends on high-purity chemicals linked to oil, naphtha, and geopolitically fragile maritime routes. Chip sophistication does not eliminate the fragility of its material foundation.
If pressure on Hormuz and Asian refining continues, the industry could face increased volatility in materials, higher prices, and greater reliance on alternative suppliers that may not always meet the standards for cutting-edge production. This particularly impacts memory and logic factories already under strain from AI demands.
Ultimately, this is not a definitive signal of an imminent global collapse, but a serious warning: the energy crisis no longer only threatens transportation or fuels — it can also hit the chemical core of photolithography. And when that happens, the entire chip industry listens.
Frequently Asked Questions
What are PGME and PGMEA, and why do they matter so much?
They are solvents used in process materials such as photoresist, thinners, BARC, SOH, and temporary adhesives for HBM. Without them, key parts of the lithography and advanced packaging chain are seriously hampered.
Is Japan actually experiencing shortages?
There is no public evidence of an immediate total shortage. The Japanese government states it can ensure supplies equivalent to about four months of naphtha consumption through inventories, domestic refining, and alternative imports.
Why does Hormuz affect Japan so much?
Because Japan depends on over 90% of its crude oil from the Middle East, and most of the oil passing through the Strait of Hormuz is destined for Asia. A significant portion of Japan’s naphtha also comes from the region.
Can these solvents be replaced by Korean or Chinese products?
In theory, yes, but the problem is the requalification process. Substituting raw materials in semiconductor materials often requires validation and notification procedures that can take around a year, or even longer for advanced nodes.
via: thelec.kr