Japan chip exports to China jump
TOKYO — Japan’s exports of integrated circuits to China surged nearly 48% in 2025, helping pull trade between Asia’s two largest economies out of a three-year slide even as tighter technology controls and political strains continued to weigh on parts of the relationship, according to a Japanese business group report released Thursday.
Chip shipments to China rose 47.9% to $28.7 billion, a gain tied to stronger demand for artificial intelligence-related components and higher prices for some memory and electronics parts, according to the Japanese Chamber of Commerce and Industry in China’s 2026 white paper, as reported by Caixin. Overall trade between Japan and China climbed 6.2% to $343.3 billion in 2025, reversing three consecutive years of decline.
The figures show how deeply Japanese suppliers remain embedded in China’s electronics, auto and industrial supply chains despite growing pressure from governments to restrict access to advanced semiconductor technology. The rebound also highlights a split in the chip trade: finished integrated circuits moved strongly into China, while exports of semiconductor manufacturing equipment fell 2.3%, reflecting the impact of export controls and shifting priorities among Japanese toolmakers.
China remains one of the most important markets for Japan’s technology companies. Renesas Electronics Corp. drew about 30% of its revenue from China in both 2024 and 2025, with China revenue rising 9% last year, according to Caixin’s summary of the report. Murata Manufacturing Co., a major supplier of electronic components, generated 47.2% of revenue from Greater China in the fiscal year ended March 2026, up 4% from a year earlier.
Supply chains stay linked despite rivalry
Analysts cited in the report said the surge was driven in part by AI-related demand that lifted sales of components such as multilayer ceramic capacitors and NAND flash memory. The global memory market also tightened sharply in 2025, moving from oversupply early in the year to shortages and rising prices by the third quarter, according to the article.
But the recovery in trade does not mean Japanese companies face easier conditions in China. A Japan External Trade Organization survey of 791 Japanese firms operating in China and other overseas markets found that 74.5% of Japanese companies in China identified Chinese firms as their main competitors, prompting many to cut prices and tighten costs.
The competition is particularly visible in the auto sector, where Chinese electric vehicle makers have become major customers for Japanese components while also challenging Japanese manufacturers in China and abroad. Murata’s China business, for example, was supported by demand from Chinese automakers, which accounted for more than half of its sales in the region, according to Caixin’s summary.
The chip figures also underscore a practical reality for both governments: decoupling remains difficult where commercial demand is strong. Japanese suppliers are trying to comply with tighter export rules while preserving access to China, a market that still offers scale few others can match. Chinese manufacturers, meanwhile, continue to rely on Japanese components and materials even as Beijing pushes to build more self-sufficient semiconductor and electronics supply chains.
The result is a trade relationship moving in opposite directions at once. High-value components are flowing at rising volumes, supported by AI, memory and automotive demand. Yet the tools needed to produce the most advanced chips remain constrained by policy, geopolitics and competition for supply from global chipmakers including TSMC, Samsung Electronics, SK Hynix and Micron Technology.
For Japanese companies, the rebound offers revenue but little comfort. China is still too large to ignore, but it is also becoming more crowded, more price-sensitive and more politically complex. The 2025 trade recovery suggests the two economies remain closely connected; the pressure on Japanese firms suggests those connections are becoming harder to manage.
