Japan's Semiconductor Industry Sees Revival with Kokusai Electric's New Factory

In recent years, the world has witnessed a significant surge in the demand for semiconductors, primarily driven by the rapid advancements in artificial intelligence (AI) and other high-tech applications. Japan, a country known for its technological prowess, is making a notable comeback in the semiconductor industry. Kokusai Electric, a prominent player in this field, is set to build its first new factory in Japan in 35 years, marking a pivotal moment in the nation’s chip-making landscape.

Kokusai Electric, which competes with giants like Applied Materials and Tokyo Electron, specializes in manufacturing equipment essential for creating nanoscale thin films used in integrated circuits (ICs). These films are crucial for the production of semiconductors, which are the backbone of modern electronics. The company has recently emerged as a leading manufacturer of semiconductor production equipment after successfully spinning off from the Hitachi Group, with the support of the US private equity firm KKR.

Despite being smaller than its competitors in terms of total sales, Kokusai Electric holds impressive market shares in its key products. According to Gartner, a respected market research organization, Kokusai commands about 70% of the market for batch Atomic Layer Deposition (ALD) and 34% for batch Chemical Vapor Deposition (CVD) as of 2023. This strong market position highlights the company’s expertise and the critical role it plays in the semiconductor supply chain.

The applications targeted by Kokusai include advanced AI processors, high-bandwidth memory (HBM) used alongside these processors, 3D NAND flash memory, and silicon carbide power devices. As Kokusai notes, “As semiconductor devices have become three-dimensional and more complex in recent years, the surface of wafers has become more complex. This, in turn, has increased demand for highly difficult deposition.” This statement underscores the evolving nature of semiconductor technology and the increasing challenges manufacturers face.

One of the most significant trends in semiconductor manufacturing is the rise of 3D NAND technology, which involves stacking multiple layers of memory cells to enhance storage capacity. Additionally, innovations such as Gate All Around (GAA) transistors, introduced with 3nm process technology, and the development of Complementary Field-Effect Transistor (CFET) architecture by imec for nodes below 1nm, are pushing the boundaries of what is possible in chip design.

Kokusai Electric’s new factory represents not just a revival of Japan’s semiconductor industry but also a response to the growing global demand for advanced technology. As the industry continues to evolve, the importance of companies like Kokusai cannot be overstated. Their innovations will play a crucial role in shaping the future of electronics, making it an exciting time for both the company and the technology sector as a whole. The resurgence of Japan in this field is a testament to the country’s resilience and commitment to remaining at the forefront of technological advancement.