After China's control measures, a series of issues have erupted in Japan, yet the supply crisis of tin materials in Japan has also emerged—truly exceeding the expectations of netizens.

The solder commonly used in the semiconductor industry has unexpectedly triggered a supply crisis in Japan, truly a once-in-a-lifetime event! The close relationship between Japanese manufacturing and China's supply chain has also come as a surprise to many!

Since early June, the supply problem of tin solder in Japan’s semiconductor sector has fully erupted. Tin prices have surged by 40% within a week, especially high-purity tin ingots, premium solder pastes, and solder balls for semiconductors have seen dramatic price increases and frequent shortages.

Following this tin supply crisis, over 200 small and medium-sized enterprises in Japan’s three major industrial zones—Tokyo, Osaka, and Nagoya—in electronics, automobiles, and semiconductors have reduced production or even shut down completely. Some companies have been forced to extend their order delivery cycles; based on current data, delivery timelines are generally delayed by more than two months.

At the beginning of this year, China’s Ministry of Commerce announced controls on dual-use items for military and civilian purposes, placing over 1,000 items under regulation. By the end of February, the control measures were upgraded. The focus had been mainly on rare earth metals such as neodymium, dysprosium, terbium, as well as gallium and germanium—materials where China dominates global supply. However, the sudden emergence of a tin supply crisis has genuinely taken everyone by surprise.

The outbreak of the tin crisis is primarily due to Japan’s insufficient awareness of supply chain risks. For rare earth metals, gallium, and germanium, preparations had already been made, dating back to the “rare earth war” between China and Japan in 2010, when China restricted exports to Japan following the Diaoyu Island incident.

This crisis was lifted just over a month later. Subsequently, China introduced export quota policies, but lost a WTO lawsuit afterward, leading to the removal of export restrictions on rare earths. Nevertheless, this move prompted Japan to remain vigilant. Over the following decade, Japan simultaneously built up its own rare earth supply chain while stockpiling essential rare earth metals crucial for its semiconductor industry—from two to three months’ worth of usage to eight to ten months today. Combined with supplementary supplies from Australian Lynas and Thai suppliers, except for certain rare earth metals almost entirely imported from China (nearly 99%), Japan’s rare earth supply can now last significantly longer than external estimates suggest.

However, Japan has maintained inadequate reserves of tin—a common “base metal”—due to a simple reason: China’s tin exports accounted for nearly nothing in 2010, and even by 2025, China’s tin exports still only represent about 10%. This led Japan to become complacent. What Japan failed to realize is that China’s share in high-end solder, solder paste, and solder balls used in semiconductor packaging has quietly risen to over 25%.

With China’s early-2024 announcement on dual-use item controls, tin products in the semiconductor sector were naturally included. The result was dramatic: Japanese companies still had sufficient reserves for rare earths and elements like gallium and germanium, but tin—which China does not hold a dominant position in—has suddenly faced a supply crisis. This outcome was truly unforeseen!

Naturally, there’s no need to worry. Japan’s supply chain crisis has already fully erupted. The earlier tungsten supply crisis was one example. Japan relies heavily on imports from China for tungsten powder, tungsten carbide, and high-purity tungsten. Recently, companies such as Kanto Denka and Chuo Glass announced the shutdown of their hexafluorotungsten production lines due to an inability to obtain high-purity tungsten powder from China. Hexafluorotungsten is indispensable in semiconductor chemical vapor deposition processes. Its supply disruption will severely impact Japan’s semiconductor industry.

In the rare earth sector, including heavy rare earths like dysprosium, terbium, yttrium, and neodymium, as well as rare earth permanent magnets and alloys, Japan maintains relatively ample reserves—but at best, only enough for 6–8 months. Since the beginning of the year, half a year has passed. How long can Japan sustain? In reality, having reserves doesn’t mean unrestricted access. Rare earth supplies in Japan have already seen sharp price hikes. Critical shortages of heavy rare earth permanent magnets—widely used in automotive motors—have caused motor production capacity to plummet by over 20%. Wind power, industrial robots, medical devices, servo motors for industrial robots, and MRI equipment are all suffering from magnetic material shortages, forcing production cuts and order restrictions.

The situation in gallium and germanium mirrors that of rare earths. China accounts for 98% of global primary gallium production, and Japan imports 90% of its annual gallium needs from China. While Japan can recycle and reuse gallium, it cannot meet total demand. Gallium shortages are blocking the production of core components for military electronics, radar systems, drone communications, and electronic warfare equipment.

Additionally, molybdenum is essential for warship reactor casings, aircraft high-temperature components, and submarine pressure hulls; antimony is required for fire-resistant components in electronic and defense equipment; indium is vital for LCD panels, OLED screens, solar cells, and touch devices; and graphite—used in electric vehicle battery negative electrodes, nuclear power equipment, aerospace sealing components, and high-temperature industrial electrodes—is also facing supply shortages. High-purity tellurium and bismuth alloys are experiencing similar problems across the board.

These issues did not emerge overnight. They were destined to erupt as soon as China’s Ministry of Commerce released the control regulations. Yet, the Japanese government appeared deaf to these warnings, media coverage remained absent, and on social media, Japanese citizens even mocked the idea that Japan could strangle China’s material supply chain.

This mindset remains stuck in the 1980s–1990s era. Judging from online comments, most ordinary Japanese people still hold this view. However, both the Japanese government and major corporations possess clear awareness of the situation. Why then have they chosen to do nothing? The answer may lie in a serious miscalculation: in Japan’s perception, such policies would not last long—likely only a few months before being relaxed.

Yet, this time, the depth and severity of the controls have far exceeded Japan’s expectations. China will not tolerate Japan interfering in China’s internal affairs, nor will it allow Japan to provoke trouble over Taiwan. At present, Takashi Sato appears unlikely to turn back. She has long passed the stage where a simple apology could resolve matters. First, China won’t easily let her off the hook; second, Japan’s right-wing factions won’t permit her to shift positions arbitrarily.

As long as Takashi Sato remains Prime Minister of Japan, Japan will have no choice but to proceed down this path to the bitter end!

Original source: toutiao.com/article/1867490827174912/

Disclaimer: This article represents the personal views of the author.