The industry giant Taiwan Semiconductor Manufacturing Company’s (TSMC) plan for a new research and development (R&D) project in Japan has won backing from the Japanese government. TSMC will work with Japanese manufacturers of materials and manufacturing equipment in pursuit of new semiconductor advances.
Japan’s share of semiconductors accounts for about 10% of this strategically important sector for both the economy and the self-defense forces. And, although land subsidence continues, it is a significant part of related materials and equipment.
Japan’s strengths were the deciding factor in TSMC’s decision to expand. The company has accelerated its response to changes in semiconductor technology.
The ultimate goal of Japanese government support is to attract advanced factories. For Japan, the opportunity to increase domestic supply has arrived.
What’s in the case
On May 31, the Ministry of Economy, Trade and Industry (METI) announced that it would contribute approximately 19 billion yen (172 million US dollars) in the form of a grant in response to TSMC’s R&D in semiconductor manufacturing technology in Japan. The total cost of the project is around 37 billion JPY (around 335 million US dollars), of which about half is subsidized.
Earlier, TSMC announced in March the establishment of the wholly owned subsidiary TSMC Japan 3DIC Research and Development Center. This 3DIC center will set up an inspection line in a clean room at the base of the National Institute of Advanced Industrial Science and Technology in Tsukuba City, Ibaraki Prefecture, from summer 2021, and will begin large-scale research in 2022.
Japan, although it is a good environment for R&D, is relatively expensive, taking into account factors such as fixed costs. TSMC, an industry leader, has decided to enter Japan anyway, and it’s not just risk diversification that they have in mind. It seems that the company is also focusing on the high level of Japanese technology related to semiconductors.
More than 20 Japanese companies are participating in the joint research. Materials manufacturers include Asahi Kasei, Ibiden, JSR, Shin-Etsu Chemical Co., Shinko Electric Industries, and Fujifilm. Keyence, Shibaura Mechatronics, Shimadzu Corporation and Disco Corporation, among others, cooperate as equipment manufacturers.
According to METI, Japan owns about 60% of the total silicon wafers, which serve as printed circuit boards for semiconductors and are a strength of Shin-Etsu Chemical Co. For resists (photosensitive agents) essential for circuits. , that JSR and others are working on, Japan’s share is about 70% of the world total. In addition to the importance of resins as the main material, about 90% of manufacturing equipment also applies this material to the surface of printed circuit boards.
The grant was dedicated to R&D related to the second part of the semiconductor manufacturing process. Changing trends have placed this field in the spotlight, and TSMC has deemed its development insufficient so far.
Semiconductor production is divided into two processes. In the first part, electronic circuits are written on disc-shaped wafers with light.
In the second part, square-shaped chips are cut from wafers with etched circuits. Then they are connected to the printed circuit board with wiring and other materials, and integrated into the product.
Until now, the race has been about making the circuits ー laid out in the first part of the process as thin as possible. If the circuits are thinner, more transistors (elements) can be integrated and the operating performance is improved. In addition, with higher circuit density, the chip area can be reduced and more chips can be made from a single wafer, resulting in lower production costs.
The most advanced on this front are semiconductors with 2 nanometer wide circuits, pioneered by TSMC and others. (1 nanometer is equal to 1 billionth of a meter). It is one-twentieth the width of major semiconductors in Japan.
The innovations of the first part of the process improved the performance of semiconductors and the added value of the second part was considered low. However, as the number of transistors on an integrated board has doubled every two years for the past 50 years as proposed by Moore’s Law, and as innovation has continued to increase the density of transistors, it becomes clear that this is approaching its limit. Other means are needed to continue to improve the performance of semiconductors.
The world has thus turned to the second part of the manufacturing process, in particular “3D packaging”. It consists of stacking several chips with different capacities and combining them into one bundle.
By replacing the increase in the density of transistors, which should stagnate, the objective is to stimulate technological innovation by making semiconductors more and more three-dimensional. TSMC’s R&D will focus on establishing this area.
At the same time, it is difficult to accurately stack small chips to make it a successful product. It is essential to consider various aspects such as materials, processing and assembly, in order to achieve this. It is for this purpose that TSMC has partnered with Japanese manufacturers who excel in materials and device technologies.
Looking for a strong role in the sector
By strengthening the relationship with TSMC, Japanese material and equipment manufacturers can not only expect large orders from them in the future, but also have the potential to become the world leader in 3D packaging.
METI’s device and semiconductor strategy office expects Japan’s strengths to come in handy. Beyond the joint research, an offer from TSMC for a factory focusing on the second part of the semiconductor manufacturing process can also be considered. In addition, an offer for a factory concentration of the first part may also be considered.
Japan, which was once the world leader in semiconductor production, lost its position because it missed the global trend of dividing development and production to improve efficiency. The gap in semiconductor development capabilities has widened and it is “impossible to catch up,” semiconductor industry officials say. Likewise, it is no longer possible for Japanese companies to independently produce advanced semiconductors.
Meanwhile, Japan has survived in sectors of the global materials and equipment market. With this as a tool, Japan must attract factories of semiconductor companies to countries and regions with similar values, and increase the domestic supply capacity of advanced semiconductors.
An evolving industry
The semiconductor industry is changing rapidly. Samsung Electronics of South Korea and Intel of the United States are also embarking on strengthening the second part of the manufacturing process, which is growing in importance.
In addition, the United States announced that it would invest 5.7 trillion JPY (approximately US $ 51.5 billion) and the European Union (EU) approximately 19 trillion JPY (approximately 172 billion US dollars). US) in semiconductor related fields. If these huge sums of money are invested in accelerating the expansion of factories, and the related fields are strengthened in parallel, there is a chance that Japan’s technological advantage will diminish.
In fact, it may be causing Japanese material and equipment manufacturers to move overseas, leaving the domestic market empty. The plan to attract factories to Japan could also fail.
Japan also has a fund to support semiconductor development, but it is only at the scale of JPY 200 billion yen. To launch mass production in Japan, which currently imports more than 60% of its semiconductors, large investments such as Europe or the United States are necessary.
In order not to lose the opportunity and increase its self-sufficiency in semiconductors, the public and private sectors in Japan must discuss and work together to stimulate investment.
(Find access to this report by Sankei Shimbun in Japanese on this link.)
Author: Katsufumi Sato, Department of Economic News, The Sankei Shimbun