China Imposes Up-to-99.2% Deposit on Japanese Chipmaking Chemical, Escalating Dispute Tied to Taiwan

China's Commerce Ministry began requiring cash deposits of up to 99.2% on imports of dichlorosilane — a specialty gas used to deposit silicon and oxide films during semiconductor wafer processing — from Japanese exporters starting September 8, 2026, following a preliminary anti-dumping finding that Japanese shipments harmed China's domestic industry. Denal Silane faces an 80.8% deposit rate while other exporters, including Shin-Etsu Chemical, face the maximum 99.2% rate; Japan supplied roughly a third of China's dichlorosilane imports (about $2.6 million in July 2026). Tokyo protested; Chief Cabinet Secretary Minoru Kihara said Japan would 'respond appropriately' and would monitor and evaluate the repercussions in detail. The measure is provisional pending a final ruling and lands amid a broader Beijing-Tokyo dispute over Taiwan that began in November 2025 when Prime Minister Sanae Takaichi suggested Japan could respond militarily to a Chinese move against Taiwan — remarks China called a 'grave provocation.' Because dichlorosilane feeds chip fabrication lines supplying Taiwan's semiconductor sector, the measure adds a new economic-coercion channel to the Taiwan-linked standoff beyond direct cross-strait pressure.