Japan- A Spending Leader in Semiconductor Equipment
By Dan Tracy, senior director, and Lara Chamness, senior market analyst,
Industry Research and Statistics group
As widely covered by the business and financial media, the economy in Japan underwent some challenges over the past fifteen years or so. As such, semiconductor manufacturers in Japan had to adjust to changing end markets and the emergence of competition from companies in other parts of Asia. While some may perceive that the semiconductor industry in Japan has been flat or even has declined some, Japan remains the global region with the largest overall installed fab capacity.
Following the severe industry downturn of 2001 and 2002, Japan emerged as the largest spender on capital equipment. According to the SEMI World Semiconductor Equipment Market Statistics (WWSEMS) report, semiconductor manufacturers in Japan will have spent $31 billion on new equipment from 2003 through 2006. This represents almost a quarter of the world total of $133 billion spent on equipment over that time period.
Investment in 300 mm technologies is one of the drivers behind this spending. The World Fab Watch database from Strategic Marketing Associates lists a dozen 300 mm fab lines currently in production and another six under construction or ramping production in Japan. This installed 300 mm capacity, assuming the new fabs are fully ramped, represents an estimated 200,000 wafer starts per month capacity.
Besides 300 mm wafer fabrication, Japan remains a key region for investment in final manufacturing too. Device manufacturers in Japan will have spent an estimated $6.23 billion on test and assembly & packaging equipment from 2003 through 2006. While many semiconductor manufacturers in Japan have located plants that assemble and test traditional leadframe-type packages to China, much of the advanced packaging and test manufacturing remains on-shore.
Yes, equipment spending by other regions in Asia-Pacific has justifiably attracted much of the industry’s attention regarding manufacturing investments, especially for memory device production and foundry capacity. Despite this, Japan has been the leader in terms of equipment spending and is expected to remain the region with the largest installed fab capacity for some time to come.
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