According to an official release of Japanese semiconductor supplier Resonac, the “US-JOINT” alliance, comprising major semiconductor manufacturing companies from Japan and the United States, has been established to focus on next-generation semiconductor packaging. From Japan, six companies are participating, led by Resonac, MEC, Urvac, Namix, TOK, and Towa. The US participants include Azimuth, KLA, Kulicke & Soffa, and Moses Lake Industries.

In this alliance, Japanese companies primarily represent the materials sector, while the US companies include not only a materials company (Moses Lake) but also a packaging equipment company (Kulicke & Soffa), a measurement and inspection company (KLA), and a packaging services company (Azimuth).

Reportedly, US-JOINT will jointly establish a research center in the United States and plans to set up a base in California in the second half of this year. The construction of cleanrooms and the installation of equipment will begin, with the goal of starting operations next year.

As per industry sources cited by the China Flash Market, it is believed that the formation of this alliance primarily targets the US semiconductor market. The US is home to many world-class technology companies, such as NVIDIA, Qualcomm, and AMD, which are key customers in the high-tech packaging market.

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(Photo credit: Resonac)

This year, global semiconductor manufacturing equipment sales are expected to grow and set a new historical record. It is estimated that next year will see even more robust growth, with an anticipated increase of 17%.

According to the forecast report from the International Semiconductor Industry Association (SEMI) released on July 10th, it’s indicated that global chip equipment sales in 2024 are estimated to increase by 3.4% year-over-year to USD 109 billion, surpassing the USD 107.4 billion record set in 2022. Furthermore, 2025 is projected to show even stronger growth, with sales expected to surge to USD 128 billion, breaking the record set in 2024.

“The growth in total semiconductor manufacturing equipment sales already underway this year is forecast to be followed by a robust expansion of roughly 17% in 2025,” said Ajit Manocha, SEMI president and CEO. “The global semiconductor industry is demonstrating its strong fundamentals and growth potential supporting the diverse range of disruptive applications emerging from the Artificial Intelligence wave.”

SEMI noted that due to continued strong equipment investment in China and increased investment in DRAM and HBM driven by AI computing, global sales of wafer fab equipment (WFE) in 2024 are estimated to grow by 2.8% year-over-year to USD 98 billion.

This is a significant upward revision from the previous estimate of USD 93 billion made in December and surpasses the USD 96 billion recorded in 2023, setting a new historical high. With the increased demand for advanced logic and memory applications, global WFE sales in 2025 are projected to increase by 14.7% year-over-year to USD 113 billion.

SEMI further stated that until 2025, China, Taiwan, and South Korea are expected to remain the top three countries in chip equipment investment. Due to continued growth in China’s equipment procurement, China is expected to maintain its leading position throughout the forecast period (up to 2025). Equipment shipments to the Chinese market in 2024 are estimated to exceed USD 35 billion, setting a new historical high, solidifying China’s unshakable lead. However, due to large-scale investments in China over the three-year period ending in 2024, it is anticipated that investments will decrease in 2025.

Chip equipment giant Tokyo Electron (TEL) announced in a press release on May 10 that starting in the second half of this year, the demand for DDR5 and HBM will increase, driving a projected recovery in investments in the most advanced DRAM.

As a result, the global market size for front-end chip manufacturing equipment in 2024 is projected to grow by 5% year-on-year to approximately 100 billion USD, matching the current historical high recorded in 2022 (around USD 100 billion). Additionally, with continued growth in AI servers and a recovery in demand for PCs and smartphones, the WFE market is anticipated to see a double-digit increase (over 10%) in 2025 compared to 2024.

In a financial report press release on May 9, semiconductor equipment company Screen Holdings stated that due to investments in mature processes in China and investments in the most advanced processes in Taiwan, the WFE market is expected to grow in 2024, with an estimated annual increase of about 5%.

Per a report by Nikkei on July 5th, SEAJ’s forecast report indicates that for the 2024 fiscal year (April 2024 to March 2025), the sales of Japanese-made chip equipment (including sales by Japanese companies both domestically and overseas) have been increased to JPY 4.2522 trillion, marking a significant increase of 15.0% compared to the 2023 fiscal year.

This will be the first time annual sales break the 4 trillion yen mark, setting a new historical record. The main drivers are the widespread adoption of AI, leading to extremely strong demand for GPUs used in AI servers, and the continued surge in demand for HBM used in conjunction with these GPUs.

Samsung Electronics has received the first client for its 2nm process. According to the official press release from Samsung on July 9th, Samsung Electronics will provide turnkey semiconductor solutions using the 2nm process and the advanced 2.5D packaging technology Interposer-Cube S (I-Cube S) to Japanese AI company Preferred Networks.

Per a previous report by SamMobile, Samsung is set to commence mass production of 2nm chips for mobile devices by 2025. The initial SF2 2nm process will be ready next year, followed by an enhanced version, SF2P, in 2026. In addition, according to Samsung’s press release, its latest 2nm process, SF2Z, has incorporated optimized backside power delivery network (BSPDN) technology, and will enter mass production in 2027.

Preferred Networks was founded in 2014 and is in the field of AI deep learning development. The company has attracted significant investments from major Japanese industrial enterprises such as Toyota, NTT, and Fanuc. The order placed with Samsung’s foundry division for 2-nanometer AI chips also includes HBM and advanced packaging.

As per the official release, Junichiro Makino, VP and Chief Technology Officer (CTO) of Computing Architecture at Preferred Networks stated that as Samsung Electronics’ 2nm GAA process will significantly support Preferred Networks’ ongoing efforts to build highly energy-efficient, high-performance computing hardware that meets the ever-growing computing demands from generative AI technologies, especially large language models.

Driven by the strong demand from AI chips, Samsung expects the revenue of global chip industry to grow to USD 778 billion by 2028, according to Siyoung Choi, President and General Manager of the Foundry Business in Samsung, the report noted.

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(Photo credit: Samsung)

To capitalize on the expanding opportunities in artificial intelligence (AI), electric vehicles (EV), and the carbon reduction market, eight Japanese companies, including Sony and Mitsubishi Electric, plan to invest JPY 5 trillion (around USD 30 billion) in semiconductors. According to a report by Nikkei on July 8, this investment is expected to increase the production of image sensors, power semiconductors, logic semiconductors, and other products.

Reportedly, eight Japanese companies, including Sony, are planning to invest JPY 5 trillion in semiconductors by 2029, driven by the optimistic outlook for the AI and carbon reduction markets. The report compiled by Nikkei surveys the equipment investment plans of eight major Japanese semiconductor manufacturers for the period from 2021 to 2029: Sony, Mitsubishi Electric, Rohm, Toshiba, Kioxia, Renesas, Rapidus, and Fuji Electric.

The report indicates that Sony will invest roughly JPY 1.6 trillion from 2021 to 2026 to increase the production of CMOS image sensors and other products, with plans to build a new factory in Kumamoto Prefecture. Additionally, Japanese manufacturers are expanding the production of power semiconductors in response to the growing AI data center and EV markets.

Toshiba and Rohm plan to invest a combined total of around 380 billion yen to increase production of silicon (Si) and silicon carbide (SiC) power semiconductors. Mitsubishi Electric aims to increase its SiC power semiconductor capacity to five times the 2022 level by 2026 and will invest about 100 billion yen to build a new factory in Kumamoto Prefecture. Mitsubishi Electric President Kei Urushima stated that they aim to establish a system capable of competing with its rival Infineon, which is the global leader in the SiC power products.

Reportedly, Japanese semiconductor companies held a 50% global market share in 1988. However, after the 1990s, they lost the competition to Taiwanese and South Korean manufacturers, leading to their withdrawal from advanced process research and development in the early 2000s. By 2017, Japan’s market share had fallen below 10%.

In recent years, the Japanese government has been actively revitalizing the semiconductor industry. In the field of advanced logic semiconductors necessary for AI, the Japanese government has decided to provide up to 920 billion yen in support to Rapidus. Rapidus plans to begin trial production of 2-nanometer chips in April 2025 and commence mass production in 2027.

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(Photo credit: Mitsubishi Electric)

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.

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(Photo credit: TEL)