TOKYO (ANN/THE YOMIURI SHIMBUN) – Manufacturers from various domestic industries in Japan, including the food sector, are progressively producing crucial parts and materials required for semiconductor manufacturing.
Despite their relatively modest operations, these firms command significant market shares and are expanding their investments in anticipation of the semiconductor market’s growth.
Ajinomoto Build-up Film (ABF), created by the leading umami seasoning company Ajinomoto Co, serves as insulation for high-performance central processing units, which form the core of personal computers and gaming consoles.
Ajinomoto dominates the market for this material in major PC models, holding nearly 100 per cent market share.
Ajinomoto started sales in 1999 of ABF, which is film developed with the use of resin processing technology acquired through research into umami seasoning.
This insulating material has resulted in higher-quality CPUs and simplifies the production process compared to the conventional technology of painting liquid insulator over substrates. Shipments of ABF in fiscal 2021 were nearly double those in fiscal 2017.
Likewise, leading optical product maker Hoya Corp holds an about 80 per cent global market share in mask blanks – a material used in a technology called “extreme ultraviolet lithography” to print minute semiconductor circuit patterns on wafers.
Mask blanks are essential to produce photomasks, a plate used for printing circuit patterns. Only Hoya and AGC Inc are said to possess mask blanks production technology for extreme ultraviolet lithography.
A common trend among these companies is high profitability backed by an oligopoly. In the case of Ajinomoto, sales of electronic and other functional materials, including ABF, accounted for only five per cent of its consolidated sales of JPY1.3591 trillion in fiscal 2022.
However, the functional material segment accounted for 27 per cent of the overall business profits, which indicate profits from core businesses.
According to market research company Fuji Keizai Co, the global market for 30 key materials for semiconductors will grow to USD44.4 billion (about JPY6.5 trillion) in 2026, up 30 per cent from 2021. Companies are making investments to enhance their production of such materials.
Ajinomoto announced in February it would invest JPY25 billion to increase the output of ABF. “We’ll continue research, so as not to fall behind in technological innovation,” said Sumio Maeda, an executive officer of Ajinomoto. “We’re determined to offer the best product even if competitors emerge.”
AGC plans to increase the production capacity of its plant in Fukushima Prefecture by 30 per cent. It is installing new production machines at the plant, aiming to have the machinery operational in January 2024.
Toppan Inc, which has strong photomask technology, plans to invest more than JPY10 billion in fiscal 2023 to strengthen its plants in Saitama Prefecture and Taiwan.
Toto Ltd produces “electrostatic chucks,” a component used in semiconductor production machines. It plans JPY4 billion in capital investment in fiscal 2023, viewing semiconductor-related areas as its new key business.
“New entrant companies with advanced technologies have opportunities in a high-profitability area,” said Masahiko Ishino, a senior analyst at Tokai Tokyo Research Institute Co. “Companies need to continue making investments to stay competitive.”
