Sector giant Taiwan Semiconductor Manufacturing Company (TSMC)’s plan for a new research and development (R&D) project in Japan has won the support of the Japanese government. TSMC will collaborate with domestic Japanese material and manufacturing equipment makers in the pursuit of new advances in the semiconductor field.
Japan’s share of semiconductors is 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 share of related materials and equipment.
Japan's strengths were the deciding factor in TSMC’s decision to expand. The company has hurried its response to changes in semiconductor technology.
The ultimate aim of the Japanese government’s support is to attract advanced factories. For Japan, the opportunity to increase domestic supply has arrived.
What’s In the Deal
On May 31, the Ministry of Economy, Trade, and Industry (METI) announced that it will contribute approximately ￥19 billion JPY ($172 million USD) 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 about ￥37 billion JPY (~$335 million USD), of which about half is subsidized.
Prior to this, TSMC announced in March that it would establish 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 the summer 2021, and will begin full-scale research in 2022.
Japan, although a good environment for R&D, is relatively expensive, considering factors such as fixed costs. TSMC, a frontrunner in the industry, decided to enter Japan anyway, and it is not only risk diversification that they have in mind. It seems that the company is also focused on Japan’s high level of semiconductor-related technology.
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, are cooperating as equipment manufacturers.
According to METI, Japan has about a 60% share of the total of silicon wafers, which act as circuit boards for semiconductors and are a strength of Shin-Etsu Chemical Co. For the resists (photosensitive agents) essential for circuits, which JSR and others are working on, Japan’s share accounts for about 70% of the world’s total. In addition to the prominence of resists as a main material, about 90% of manufacturing equipment also applies this material to the surface of circuit boards.
The grant was dedicated to R&D related to the second part of the semiconductor manufacturing process. Changes in trends have placed this field in the spotlight, and TSMC has considered its development insufficient thus far.
Semiconductor production is split into two processes. In the first part, electronic circuits are written onto disk-shaped wafers with light.
In the second part, square-shaped chips are cut from wafers with engraved circuits. Then they are connected to the circuit board with wiring and other materials, and built into the product.
Until now, the race was in making the circuits ー drawn during the first part of the process ー as fine as possible. If the circuits are made thinner, a larger number of transistors (elements) can be integrated and operating performance is improved. Further, with a higher density of circuits, the area of the chip can be reduced and more chips can be made from a single wafer, leading to a reduction in production costs.
The most advanced on this front are semiconductors with circuits that have a width of 2 nanometers, started by TSMC and others. (1 nanometer is 1 billionth of a meter). It is one-twentieth the width of the leading semiconductors in Japan.
The innovations in the first part of the process drove the improvements in semiconductor performance, and the added value of the second part was considered to be small. However, while the number of transistors on an integrated board has doubled every two years for the past 50 years as Moore’s Law proposes, and innovation has continued in increasing the density of transistors, it is becoming clear that this is approaching its limit. Other means are necessary to continue improving the performance of semiconductors.
The world has thus turned its attention to the second part of the fabrication process, in particular “3D packaging.” This consists of stacking multiple chips with different capabilities and combining them into one package.
As a substitute for increasing the density of transistors, which is expected to stagnate, the aim is to drive technological innovation by making the semiconductors increasingly three-dimensional. TSMC’s R&D will focus on establishing this field.
At the same time, it is difficult to precisely stack small chips to make a high-performance product. It is essential to review various aspects such as materials, processing, and joining, in order to achieve this. It is for this purpose that TSMC joined with Japanese manufacturers that excel in technology related to materials and devices.
Seeking 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 will have the potential to lead the world in 3D packaging.
METI’s Device and Semiconductor Strategy Office expects that Japan’s strengths will be useful. Beyond the joint research, a bid from TSMC for a factory focusing on the second part of the semiconductor fabrication process can also be forecast. Further, a bid for a factory concentration of the first part can also be considered.
Japan, which once led the world 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,” say semiconductor industry officials. Similarly, it is no longer possible for Japanese companies to independently produce cutting-edge semiconductors.
Meanwhile, Japan has survived in the global material and equipment market sectors. With this as a tool, Japan must attract factories from semiconductor companies in countries and regions with the same values, and increase the domestic supply capacity of advanced semiconductors.
A Forward-moving Industry
The semiconductor industry moves quickly. Samsung Electronics of South Korea and Intel of the United States are also embarking on strengthening the second part of the fabrication process, which is gaining importance.
Moreover, the United States has announced that it will invest ￥5.7 trillion JPY (~$51.5 billion USD) and the European Union (EU) about ￥19 trillion JPY (~$172 billion USD) in semiconductor-related fields. If these enormous 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, there is the possibility that this will spur Japanese material and equipment manufacturers to move abroad, leaving the domestic market hollowed out. The plan of attracting factories into Japan may also fail to succeed.
Japan also has a fund to support the development of semiconductors, but it is only on the scale of ￥200 billion JPY. In order to start mass production in Japan, which currently imports more than 60% of its semiconductors, a large amount of investment ー like Europe or the United States ー is required.
To keep from losing the opportunity and to raise its self-sufficiency in semiconductors, Japan’s public and private sectors must hold discussions and work together to stimulate investments.
(Find access to this Sankei Shimbun report in Japanese at this link.)
Author: Katsufumi Sato, Economic News department, The Sankei Shimbun