Japanese chemical maker Asahi Kasei will invest over 15 billion yen ($105 million) to build a new domestic plant to make semiconductor materials, Nikkei has learned. With global demand for chips expected to bottom out soon, the company is looking to expand, offering inputs to domestic chipmakers.
With the new plant, the company will double its production capacity for liquid photosensitive resin, which is used to protect chip surfaces. Demand for this material is rising rapidly as chips become more advanced and are stacked. Japanese companies, including Asahi Kasei, Resonac Holdings, Sumitomo Bakelite and others, are estimated to account for around 90% of the global market for this resin.
The new factory, to be built on an existing plant site in Shizuoka prefecture in central Japan, is slated to come online next December, and related inspection facilities in April 2024. This is Asahi Kasei’s first investment in new production capacity in about 16 years.
Asahi Kasei’s existing plant is nearing full capacity, and plastics maker Sumitomo Bakelite has also increased its capacity last year.
Asahi Kasei’s products can be more finely shaped and have high heat resistance. The company’s operating income in its digital business, including chip materials, is expected to rise 20% from the previous year to 17.1 billion yen in the fiscal year ending March 2024. The chemical company aims to cultivate demand abroad in Asia and the U.S., and hopes the increase in production will lead to a higher market share.
According to U.S. research specialist Gartner, the global semiconductor market is forecast to grow 16.8% to $624 billion in 2024, the first increase in two years, and to expand to $721 billion in 2025, up an additional 15.5% increase versus 2024.
Although the chip market has recently been sluggish after a round of investment to raise production during the pandemic, it is recovering, thanks to solid medium- to long-term demand driven by the growth of artificial intelligence, electric vehicles and other applications.