Any suggestions for Samsung to get out of the rut? The remedy for its slow transformation may be hidden in the experience of Japanese peers. According to reports by Nikkei and Korea media outlet edaily, Samsung has begun researching Japanese companies, led by its Future Business Planning Division.

Citing Nikkei’s report on October 16^th, edaily notes that Samsung’s Future Business Planning Division, which is directly under the charge of Chairman Jay Y. Lee himself, plans to analyze the operations of 110 Japanese companies to study the decline and revival of the Japanese electronics industry. The main objective of the initiative is to identify and nurture business opportunities for Samsung, the reports suggest.

Notably, the research is said to include major tech firms such as Sony Group, which has gradually shifted its focus from hardware to content-oriented businesses like gaming, music, and film, edaily notes. Hitachi, a paradigm of downsizing its original business empire to focus on key growth areas instead, is rumored to be another research subject.

The reports indicate that Samsung’s Future Business Planning Division is gathering not only top employees from various divisions of the group but also individuals with business experience from outside, as it tries to “seek answers from the past for the future.”

Interestingly though, Samsung seems to be in the same shoes as its Japanese rivals a few years ago. Nikkei states that the South Korean tech giant surpassed Japanese companies in the semiconductor and television sectors, but now has found itself in a defensive position when being gradually caught up by Chinese companies, much like the situation Japanese firms used to get stuck in.

Samsung reported its third-quarter earnings last week. The company’s operating profit was initially expected to exceed 10 trillion won, but the actual performance fell short of that target. In terms of chip making business, it is lagging behind foundry giant TSMC due to unstable 3nm yield rates. Regarding memory business, SK hynix is claiming the throne of HBM amid AI boom.

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• [News] Samsung Foundry Faces Yield Struggles and Client Losses, External Push for Spinoff and U.S. Listing

(Photo credit: Samsung)

While driving advances in HBM, foundry, and advanced packaging, AI generative applications also boosted the demand and sales of semiconductor equipment.

Recently, Japanese semiconductor equipment giant DISCO announced that its non-consolidated (individual) shipments for April to June 2024 amounted to JPY 85.7 billion, marking a 50.8% year-on-year increase. The quarterly (individual) shipment surpassed the JPY 78.5 billion from January to March 2024, setting a new record high.

DISCO pointed out that the demand for precision processing equipment related to generative AI remains solid; for consumable-type precision processing tools, the demand remains high, align with the operation rates of customers’ equipment.

Semiconductor equipment refers to specialized equipment used in the production of various types of integrated circuits and discrete semiconductor devices, encompassing various products mainly categorized into front-end process equipment and back-end process equipment.

Front-end process equipment is used in the wafer manufacturing process involving products such as lithography machines, etching equipment, thin film deposition equipment, and CMP equipment.

Back-end process equipment is mainly used in the packaging and testing processes of semiconductor products to ensure product quality and reliability. Representative products include dicing equipment, packaging equipment, testing equipment, and wafer dicing saws, which are used to cut wafers into individual chips for subsequent packaging and testing. DISCO is a leading manufacturer in this segment.

Japanese semiconductor equipment holds a significant position globally, gathering numerous renowned companies such as Tokyo Electron, Advantest, Hitachi High-Tech, Nikon, and DISCO.

With the AI boom, the industry believes that sales of Japanese semiconductor equipment will continue to climb up. The Semiconductor Equipment Association of Japan (SEAJ) forecasts that Japan’s semiconductor equipment sales is expected to exceed JPY 4 trillion for the first time in 2024, representing a 15% annual increase, which is projected to surpass JPY 5 trillion by 2026.

This growth is primarily benefited from the increasing demand for AI-driven GPU and HBM. In May 2024, Japanese semiconductor equipment sales surged by 27% YoY, continuing to grow and setting new monthly records.

China’s semiconductor equipment market is also enjoying robust growth driven by favorable factors like AI. Recently, data jointly released by the Semiconductor Equipment and Materials International (SEMI) and SEAJ indicated that in the first quarter of 2024, global semiconductor equipment sales totaled USD 26.4 billion, down 2% YoY and 6% QoQ, which was dragged down by the sluggish demand in some markets.

Despite the headwind globally, China’s sales reached USD 12.52 billion in the first quarter, up by 113% YoY, maintaining its position as the world’s largest semiconductor equipment market for the fourth consecutive quarter.

Read more

• [News] Booming GPU and HBM Demand Pushes Japanese Chip Equipment Annual Sales to Record High
• [News] New Regulations Reportedly Introduced by Japan Regarding Semiconductor Exports

(Photo credit: TEL)