In the 1990s, Japan produced about 50% of all chips; today this percentage has been reduced to a paltry 9%. Tokyo wants to reverse the trend.
Japan was once the largest producer of chips in the world. From the end of the 90s onwards, however, the country’s large companies have diverted their investments and interests elsewhere, leaving semiconductors to their fate (and in the hands of other countries, Taiwan and South Korea first and foremost).
Now that the wind has changed, and international tensions are putting global supply chains at risk, Tokyo has changed its tune. It is no coincidence that the government led by Fumio Kishida has increased its support for the semiconductor industry. Suffice it to say that between 2021 and 2023 Japan invested approximately 23.17 billion dollars to revive the entire sector. For the record, this is a higher share of GDP than that put on the table by the United States, Germany, France, and the United Kingdom.
In such a context, several relevant players stand out, including Disco Corporation, a company that produces equipment for cutting, grinding, and polishing chips. Just to better understand what we are talking about, Disco creates particular laser saws to cut semiconductor silicon wafers and other strategic materials; grinders for processing silicon wafers and compound semiconductors at ultra-thin levels; polishing machines to remove the grinding damage layer from the back of the wafer and to increase the strength of the chip.
The rise of Disco in chip Japan
Under the leadership of CEO Kazuma Sekiya, grandson of founder Mitsuo Sekiya, who started the company in 1937 as Daiichi-Seitosho, the company’s net profit rose to nearly $550 million for the fiscal year ending March 2024. Sales grew more than 8% to nearly $2 billion. According to Forbes, the weak yen, helped the company, which generates almost 90% of its revenues from abroad.
The packaging of chips, i.e. their insertion into a protective casing and their connection to the power supply and other components, has now assumed very high importance. Also because with the dimensions of the chips approaching the atomic level, it is becoming increasingly expensive (and complex) to shrink these technological wildcards further. To do this, Disco has announced plans to build a state-of-the-art factory in the Hiroshima region. The facility, located in Kure, will aim to produce a critical component used in wafer processing, positioning the company to meet growing customer needs.
The next plant, with an estimated investment of over 200 million dollars, will focus on making cutting wheels essential in the dicing, grinding, and polishing processes of the chips themselves. This development is expected to increase Disco’s production capacity by 14 times. Construction of the site is expected to begin as early as 2025. We remind you that Disco currently holds the dominant market share in the world in machines dedicated to chip dicing, grinding, and polishing.
The Return of Tokyo
Japan has been forced to get back on track on chips following significant geopolitical changes in technology in recent years, as well as lessons learned during the Covid-19 pandemic and the impact of a global crisis on supply chains. strategic supply.
Numbers in hand, in the 1990s Japan produced approximately 50% of all chips; today this percentage has been reduced to a paltry 9%. According to statistics from the Japanese Ministry of Finance, Japanese government funds invested in the sector represented 0.71% of GDP between 2021 and 2023, exceeding the corresponding figures of countries such as Germany, which stood at 0.41 %, the United States, with 0.21% and France, with 0.20%. And this financial support is expected to continue to grow.
Meanwhile, there is no shortage of foreign companies eager to invest in Japanese territory. Industry giant Taiwan Semiconductor Manufacturing Company (TSMC) has completed a manufacturing plant in Kumamoto, southern Japan. Similarly, Kioxia and Western Digital jointly built a factory in Yokkaichi, Mie Prefecture to produce 3D NAND Flash memory products. The Ministry of Trade and Industry is also supporting domestic chip company Rapidus with 590 billion yen to build a manufacturing plant in Hokkaido in partnership with IBM. The plant is expected to start production in 2027. The message is clear: Japan is ready to get back on track.
Original article published on Money.it Italy 2024-07-21 07:07:00. Original title: Come e perché il Giappone sta puntando sui chip
