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Japan - Semiconductor Material Spending to Outshine Spending in Equipment

by Dan Tracy, Senior Director; Christian Gregor Dieseldorff, senior analyst; Lara Chamness, senior market analyst
SEMI Industry Research and Statistics

The current state of the economy has cast a dark cloud all over the world. This dark cloud has also made its way to the semiconductor equipment sector. 2007 was a growth year for the Japan semiconductor equipment market with spending totaling $9.3 billion. For 2008, it is projected that Japan will only spend approximately $7.7B on equipment, a contraction of about 17%. However, in the midst of this tough time, there is a glimmer of positive news, assuming worldwide semiconductor sales do not contract substantially in 2009.

Growth in the semiconductor materials market has been positive for the past six years. Japan continues to dominate worldwide semiconductor materials consumption at 22% market share because of the large installed fab base and the focus on advanced packaging manufacturing. Growth in semiconductor materials in Japan is forecasted to grow 4% from about $10.5 billion this year to reach $11.0 billion in 2009. Wafer fabrication materials are anticipated to drive a large portion of this growth due to investments in 300 mm fabs over the past year.


Regional Market Share for Semiconductor Materials Market (2005- 2008)

Regional Market Share Chart
Source: Materials Market Data Subscription, November 2008


As of end of October 2008, there were 17 300 mm volume fabs in 2008 —with Flash Alliance sharing most of the construction spending—in Japan. According to the World Fab Forecast data (end of October 2008), the 300 mm capacity in this region is expected to increase by 25% to 30% from 400,000 wafers per month (wpm) in 300 mm wafers last year to over 500,000 wpm in 300 mm by the end of 2008. It is expected that year-over-year growth of 300 mm capacity additions for 2009 to slow to about 12% to 16% in Japan.


Production 300 mm Frontend Fabs in Japan
 

View Larger Map

Data Source: SEMI
World Fab Forecast, October 2008

In addition to 300 mm wafer fabrication, Japan remains a key region for investment in final manufacturing. Device manufacturers in Japan will have spent an estimated $8.2 billion on new test & assembly and packaging equipment from 2003 through 2008. While many semiconductor manufacturers in Japan have relocated plants to China that assemble and test traditional leadframe-type packages, much of the advanced packaging and test manufacturing remains on-shore.

Equipment spending by other regions in the Asia-Pacific justifiably attracts much of the industry’s attention regarding manufacturing investments, especially for memory device production and foundry capacity. Despite this, Japan continues to be one of the leaders in terms of equipment and advanced technology spending. Japan will remain a significant player in this market in the years to come.

Portions of this article were derived from the World Fab Forecast, Equipment Market Data Subscription (EMDS), and the Material Market Data Subscription (MMDS). These reports are essential business tools for any company keeping track of the semiconductor equipment and material market in Japan. Additional information regarding this report and other market research reports can be found at www.semi.org/marketinfo. For questions, please feel free to contact either Dan Tracy (dtracy@semi.org) or Lara Chamness (lchamness@semi.org). If you would like a brochure or a sample of any of these reports, please contact Ed Hall (ehall@semi.org).