As chipmakers push EUV lithography toward its physical limits at 2nm and below, the advanced chemicals used to pattern those circuits have become a critical bottleneck. Photoresists, the light-sensitive materials that transfer circuit designs onto silicon wafers, must be reformulated for each new process node, and the most advanced EUV-grade resists are produced almost exclusively by a handful of Japanese suppliers. With AI chip demand driving record orders at leading foundries, those suppliers are now racing to build production capacity closer to their biggest customers.
JSR, the Japanese chemical maker that holds roughly a quarter of the global photoresist market, established a joint venture with Taiwanese partners Wah Lee Industrial and LCY Chemical in early April to build its first photoresist production facility in Taiwan. The plant, located in Yunlin County, is expected to come online as early as 2028 and will co-develop advanced photoresists with TSMC, ending the company's status as the last of Japan's three leading EUV-class resist suppliers without a Taiwanese manufacturing base.
JSR under new ownership
JSR is no longer a publicly traded company. Japan Investment Corporation (JIC), a government-backed fund, completed a tender offer at ¥4,350 per share in April 2024, securing more than 84% of outstanding stock. JSR delisted from the Tokyo Stock Exchange on June 25, 2024, and the merger was finalized in December. The deal valued the company at roughly ¥909 billion ($6.4 billion).
Under JIC's ownership, JSR has moved aggressively to concentrate on semiconductor materials. The company divested non-core assets to Resonac and Tokuyama in early 2025 and exited its biotech business entirely. In May 2024, it acquired Kyoto-based Yamanaka Hutech, adding chemical vapor deposition (CVD) and atomic layer deposition (ALD) precursor expertise. Then, in September last year, JSR settled long-running patent litigation with Lam Research and converted it into a cross-licensing agreement covering dry-resist EUV patterning and etch precursors.
JSR's decision was driven by a direct request from TSMC, according to CommonWealth Magazine. New CEO Tetsuro Hori, who took over in April 2025, told the publication that "speed is critical," noting that local production would eliminate the need to ship wafers out of Taiwan during co-development cycles.
JSR had been shipping resist samples from facilities in Japan, the U.S., and Belgium, with each development cycle taking weeks for round-trip shipping alone. A week after the joint venture was announced, JSR opened a separate advanced planarization research center in Hukou, Hsinchu County, in partnership with TSMC and Applied Materials.
Location, location, location
A Photoresist is the light-sensitive material that transfers circuit patterns onto silicon wafers during lithography. At advanced process nodes, resist formulations need to be precisely tuned to work with specific exposure wavelengths, dose profiles, etch chemistries, and integration workflows. Each new node requires hundreds of iterative test cycles between the resist supplier and the foundry.
JSR's two largest Japanese rivals have had a co-development presence in Taiwan for years. Tokyo Ohka Kogyo (TOK) and Shin-Etsu Chemical, the first- and third-largest photoresist suppliers respectively, both operate production facilities on the island where their engineers work directly alongside TSMC's process teams.
Shin-Etsu runs a line in Douliu, also in Yunlin County, and is building a new ¥83 billion facility in Isesaki, Gunma Prefecture, while TOK has been present in Taiwan for more than a decade and announced a ¥20 billion photoresist plant in South Korea in late 2025 to serve Samsung. This means that every major Japanese materials supplier is now either manufacturing in Taiwan or actively building out capacity to do so.
JSR's Taiwan plant will produce photoresist for TSMC, but in the longer term, the company will focus on metal oxide resist (MOR). MOR uses tin-oxide-based chemistry rather than the organic polymers and photoacid generators found in CARs, which rely on chemical amplification to compensate for the few high-energy photons produced by the light source at 13.5nm EUV wavelengths. However, that amplification introduces acid-diffusion blur and worsening line-edge roughness as feature sizes shrink.
Tin-oxide MOR absorbs EUV photons roughly five times more efficiently than organic CARs, according to Inpria, and uses molecular building blocks roughly five times smaller, while etch resistance is 10 to 100 times higher. At SPIE Advanced Lithography 2025, Inpria reported MOR patterning down to pitch-18 with full etch transfer, while Imec demonstrated additional dose-response improvements by adjusting oxygen concentration during the post-exposure bake step.
JSR's MOR production plant in Cheongju, South Korea, built through its JSR Micro Korea subsidiary, is expected to begin mass production this year, supplying Samsung Electronics and SK hynix with tin-based MOR for EUV layers in next-gen DRAM. Both memory makers are reportedly planning to adopt MOR on selected layers for their 1c (sixth-gen 10nm-class) DRAM nodes.
JSR plans to market MOR to TSMC as well, according to Nikkei. TSMC has stated repeatedly that it won’t adopt high-NA EUV through its A14 (1.4nm-class) node in 2028, instead extending low-NA with multi-patterning, which pushes the largest MOR opportunity at TSMC's logic fabs out toward 1.0nm-class processes and beyond.
Chinese competition at the lower end
Japanese companies collectively control roughly 80% of the global photoresist market, and dominance at the EUV level is even more concentrated: JSR, TOK, and Shin-Etsu account for nearly 85% of EUV resist production volume, according to industry estimates. Chinese firms have made progress at the KrF and i-line level, but penetration at ArF and above remains negligible. Domestic Chinese supply of ArF and EUV resist sits below 5%.
The names to watch are Hubei Dinglong, Xuzhou B&C Chemical (backed by Huawei's Hubble Investment arm), Jiangsu Nata Optoelectronic, and Shanghai Sinyang. Xuzhou B&C claimed it achieved a 14nm wet-process photoresist breakthrough in 2024 and targets advanced mass production within five years, according to TrendForce, but analysts view that timeline as optimistic given the multi-year customer-qualification cycles that resist adoption requires.
"Chinese players are a threat, but it'll still be some time before they can catch up with us and take market share," Toru Kimura, a senior officer at JSR who heads the company's electronic materials business, told Nikkei. Specific capacity figures, the output mix between MOR and conventional resists, and the exact scope of the Yunlin plant haven’t been disclosed.
