Core Viewpoint - The article highlights China's heavy reliance on Japan for critical strategic new materials essential for high-end manufacturing and national security, particularly in the semiconductor and advanced materials sectors. It emphasizes the risks posed by this dependency and the urgent need for domestic production capabilities to mitigate potential supply chain disruptions [2][4]. Group 1: Dependence on Japan for Core New Materials - Japan holds a monopolistic or dominant position in semiconductor materials, high-end polymers, and electronic chemicals, with China's dependency exceeding 50% in several key categories, and nearly 100% in some high-end areas [4]. Group 2: Semiconductor Core Materials - The semiconductor manufacturing process is complex, with Japanese companies controlling key materials like photoresists and large silicon wafers, maintaining a global market share of over 60%, while China's import dependency is generally above 70% [6]. Photoresists - The overall import dependency for photoresists is about 90%, with high-end process photoresists being 100% reliant on Japan; 67% of China's photoresist imports come from Japan [7]. - Key companies include JSR, Tokyo Ohka, Shin-Etsu Chemical, and Fujifilm, which dominate 92% of the high-end photoresist market [7]. - Domestic companies can only produce low-end photoresists, with a domestic production rate of less than 5% [7]. 12-Inch Silicon Wafers - The overall import dependency for 12-inch silicon wafers is around 90%, with Japan being the largest source at 58% [9]. - Key companies like Shin-Etsu Chemical and SUMCO control over 60% of the global market, with 70% of China's major wafer manufacturers sourcing from these firms [9]. - Domestic production has achieved a 90% yield for low-end wafers, but high-end production remains 100% reliant on Japanese suppliers [9]. Semiconductor Cleaning Materials - The import dependency for high-purity cleaning materials is approximately 85%, with 60% sourced from Japan [11]. - Key companies include Mitsubishi Chemical and Morita Chemical, which dominate the market [11]. High-Purity Ruthenium Targets - The import dependency is 98%, with Japan holding a dominant market share [12]. - Domestic production is expected to improve, with a target of 30% import substitution by 2027 [12]. Group 3: High-End Polymer Materials - In high-end fields like flexible electronics and semiconductor packaging, Japanese companies dominate the market for polyimides and optical-grade polyester films, with import dependency exceeding 80% for high-end products [18]. High-End Electronic Grade Polyimide Films - The overall import dependency for polyimide materials is 85%, with high-end electronic-grade films being 90% reliant on Japan [19]. - Key companies include Toray Industries and Ube Industries, which control 75% of the high-end polyimide film market [19]. Optical-Grade Polyester Films - The overall import dependency for optical-grade polyester films is 75%, with 100% reliance for high-end films used in MLCCs [23]. Group 4: Other Key Materials in Electronics - The import dependency for high-end sputtering targets is about 95%, with Japan controlling 60% of the market [27]. - The import dependency for high-purity electronic gases is 70%, with Japan holding a 40% market share [31]. Group 5: Hydrogen Energy and Fuel Cell Key Materials - The import dependency for high-end carbon carrier materials used in fuel cells is 85%, with 90% reliance on Japan [35]. - The import dependency for high-purity aluminum nitride substrates is 92%, with Japan dominating the market [38]. Group 6: Other New Material Categories - Apart from Japan, the U.S., Germany, South Korea, the UK, and Taiwan dominate in areas like polyolefin elastomers and aerospace materials, with import dependency generally exceeding 60% [57].

Group 1 - The report emphasizes the importance of supply shocks and is optimistic about the import substitution of new materials in the basic chemical industry [1][4] - The chemical raw materials and products industry achieved revenue and profit of 2.95 trillion and 115 billion respectively in the first four months of 2025, with a year-on-year growth of 3.1% and a profit decline of 4.4% [12][19] - The chemical industry profit margin has dropped to a historical low of 3.9% as of mid-2025 [12][52] Group 2 - The report indicates that external demand may slow down in 2025, with oil prices under downward pressure due to OPEC+ increasing production [35][39] - Domestic demand is expected to stabilize and recover due to a series of incremental policies, with GDP growth projected at around 5% for the year [43][44] - The report highlights that the chemical raw materials and products industry fixed asset investment growth has significantly slowed, with the operating rate dropping to 73.5% in Q1 2025 [24][26] Group 3 - The report identifies potential investment opportunities in the chemical industry, particularly in supply-restricted sectors such as phosphate and potassium fertilizers, and in high-concentration sub-industries like viscose staple fiber and vitamins [48][49] - The report recommends focusing on companies involved in new materials, especially those related to import substitution, such as AI high-speed resins and fluorinated liquids [48][49] - The report suggests that the valuation of the basic chemical sector is at a historical low, with the overall PE and PB ratios at 22.29 times and 1.82 times respectively as of June 16, 2025 [52][53] Group 4 - The viscose staple fiber industry has not seen new capacity additions for several years, leading to a high concentration and potential for profit recovery [60][67] - The polyester industrial yarn sector is expected to see a reversal in supply and demand dynamics, with no new capacity planned and increasing demand from the automotive sector [69][79] - The modified plastics sector is projected to grow due to the ongoing replacement policies in domestic appliances and the rise of new demands from robotics and low-altitude applications [81][90] Group 5 - The refrigerant market is expected to grow steadily, supported by the ongoing replacement policies and increasing demand from the automotive sector [92][93] - The report highlights the potential for the civil explosives industry to see demand exceed expectations due to high resource prices and ongoing large-scale infrastructure projects [95][96] - The phosphate chemical sector is projected to maintain high profitability due to sustained high prices and tight supply-demand conditions [99][100]