According to Nikkei Asia, Japanese chip manufacturing equipment manufacturers are building new factories in China to cope with the decline in chip demand and the arrival of the era of TSMC and electric vehicles.

V Technology started full operation of a factory and research center in the port city of Yokosuka on Tuesday, with a total investment of about 2 billion yen (14.2 million dollars).

V Technology designs machines for the chip industry, including equipment for inspecting photomask as part of the circuit formation process. But until now, it has no factory of its own and outsources production. Yokosuka Factory is its first factory.

"By having our own factory, we will be able to reduce waste in the manufacturing process and achieve significant cost-effectiveness," said Shigeto Sugimoto, president.

TSMC, the world's top chip foundry, has built factories for Japanese wafers to stimulate such investment.

Sugimoto said that the demand for chips for personal computers and other consumer devices may decline, "but there is no doubt that in the long run, the popularity of more servers and electric vehicles will create more demand."

In the long run, 5G communication and electric vehicles are expected to increase the demand for semiconductors. According to the data of the Ministry of Economy, Trade and Industry of Japan, by 2030, the value of the global semiconductor market is expected to reach about 100 trillion yen, or more than 700 billion dollars, twice the level in 2020.

During this period, Japan's semiconductor manufacturing equipment market is expected to double to more than 4 trillion yen.

In the United States, the CHIPS and Science Act signed by President Biden in August will provide US $39 billion in incentives for domestic production within five years. With the construction of a new chip factory in the United States, the legislation will encourage global investment in chip manufacturing equipment.

Japan International Electric Corporation, which produces semiconductor wafer processing equipment, invested 24 billion yen to build a factory in Libo, Japan. This is the largest investment of the company since it was acquired from Hitachi by American hedge fund KKR in 2017.

Kokusai Electric's customers include Intel, whose factories in Korea and Japan are operating at full capacity, but the company is unable to keep up with shipments. The construction of Libo plant is planned to be completed in 2024, and International Electric will expand the capacity of existing facilities. The capacity will eventually be about twice the size of the fiscal year ending March 2021.

Canon, which makes lithography machines for making chip circuits, will build a new factory in Utsunomiya. It is planned to be launched in the spring of 2025, which will double the capacity of the whole company.

Hiroaki Takeishi, Senior Executive Officer, said: "This decisive investment will improve productivity, shorten delivery time and bring stable supply."

TSMC will start construction of a new plant in Kumamoto, Japan, in 2024. According to Kyushu data, since TSMC announced its Japanese expansion plan in 2021, at least 14 new projects have built new semiconductor facilities or expanded existing factories in Kumamoto County. Bureau of Economy and Industry.

Semiconductor manufacturing equipment accounts for half of these new projects that are about to take place.

According to Omdia's data, Japan holds about 30% of the semiconductor equipment market, which makes the industry in a relatively better competitive position than Japan's overall semiconductor industry.