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Asahi Kasei Invests Heavily in New Plant for Semiconductor Materials Amid Rising Global Demand

Japanese Chemical Giant to Double Production of Key Chip Component, Aiming for Market Expansion in Asia and the U.S.
Japan
a 3407.TSE Mid and Small Cap 2000
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Asahi Kasei, a leading Japanese chemical manufacturer, is taking a bold step forward in the semiconductor industry with a substantial investment of over 15 billion yen ($105 million). This move is to establish a new plant dedicated to producing semiconductor materials, indicating a strategic response to the anticipated resurgence in global chip demand.

The new facility, set to be constructed in Shizuoka prefecture, marks the company’s first significant expansion in production capacity in nearly 16 years. Scheduled to commence operations in December next year, with related inspection facilities following in April 2024, the plant aims to double Asahi Kasei’s output of liquid photosensitive resin. This material, crucial in protecting chip surfaces, is witnessing surging demand as semiconductor technology advances and chips become more sophisticated and stacked.

Japanese firms, including Asahi Kasei, Resonac Holdings, and Sumitomo Bakelite, currently dominate approximately 90% of the global market for this specific resin. The investment by Asahi Kasei is timely, as their existing facilities are nearing full capacity. Additionally, Sumitomo Bakelite, another major player in the industry, expanded its capacity last year, indicating a broader industry trend towards growth.

Asahi Kasei’s products, known for their fine shaping capability and high heat resistance, are becoming increasingly critical in the digital sector. With the semiconductor market forecasted by U.S. research specialist Gartner to grow significantly by 2024 and 2025, driven by advancements in artificial intelligence, electric vehicles, and other technologies, Asahi Kasei is positioning itself strategically. The company aims not only to increase its market share domestically but also to extend its reach to markets in Asia and the U.S.

This investment underscores a broader recovery in the chip market, which had experienced a slowdown post-pandemic investment surge. With medium to long-term demand solidifying, Asahi Kasei’s expansion represents a significant move in an industry poised for substantial growth.

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