Japanese Semiconductor Boom: 70% Surge in Equipment Investment

On December 18th news, as reported by Nikkei News, substantial investments by major semiconductor manufacturers such as TSMC and Micron are catalyzing advancements in technology and expansion of production capacity among Japanese semiconductor equipment suppliers.

In the fiscal year 2023 (April 2023 - March 2024), the six leading semiconductor equipment suppliers in Japan, including Tokyo Electron, DISCO, Advantest, Lasertec, Tokyo Precision, and Screen Holdings, are strategically planning an investment totaling approximately 5.47 trillion yen, encompassing both research and development and equipment investments. This marks a noteworthy 70% increase compared to the fiscal year of 2018.

At SEMICON Japan 2023 on the 13th, Mr. Toshiki Kawai, President of Tokyo Electron, asserted, "The semiconductor market is projected to exceed $1 trillion by 2030, indicating significant market potential."

On the 14th, Mr. Satoshi Kanae, Director of the Intelligence Industry Division at the Ministry of Economy, Trade, and Industry in Japan, underscored, "Leading overseas semiconductor manufacturers are planning to collaborate with Japan, emphasizing the field of 'equipment,' and expand their research and development initiatives within the country."

Benefiting from Japanese government subsidies, TSMC is investing $8.6 billion in the establishment of a wafer fabrication plant in Kumamoto Prefecture, with considerations for a second facility nearby. Reports also suggest TSMC is contemplating the construction of a third wafer fabrication plant in Kumamoto Prefecture, focusing on the production of cutting-edge 3nm chips. Additionally, Micron recently announced plans to invest up to 500 billion yen in Japan over the next few years.

On December 12th, the International Semiconductor Industry Association (SEMI) presented its year-end global semiconductor equipment market forecast at SEMICON Japan 2023. The report anticipates a 6.1% year-on-year decline in chip equipment (new products) sales to $100.9 billion in 2023, the first contraction in four years. However, a turnaround is expected in 2024, with the semiconductor equipment market projected to grow by 4% to $105.3 billion. Furthermore, the 2025 forecast predicts a substantial 18% growth to $124 billion, reaching a historic high.

SEMI CEO Ajit Manocha emphasized, "The semiconductor market is cyclical, with a short-term downturn expected in 2023. However, 2024 is projected to be a turning point toward recovery, and with increased production capacity, the construction of new wafer fabs, and growing demand from advanced technology and solutions, a robust recovery is anticipated in 2025."