May 15, 2023

Samsung Electronics Korea will establish a new semiconductor development hub in Japan

The company will invest over 30 billion yen to build a prototype line for advanced semiconductor devices in Yokohama. It is also coordinating to utilize Japanese government subsidies and will promote joint research with Japanese material and manufacturing equipment manufacturers. The entry of Korea's top company into the hub will give further impetus to strengthening cooperation between Japanese and Korean semiconductor industries.

According to Gartner, US research firm, Samsung's semiconductor sales in 2022 amounted to $65.5 billion (about 9 trillion yen), ranking second in the world after Taiwan Semiconductor Manufacturing (TSMC). TSMC has established a development hub in Ibaraki Prefecture and is building a production hub in Kumamoto Prefecture. The world's top two semiconductor companies will open R&D hubs in Japan.

For many countries, semiconductors have become a strategic commodity for economic security. In response to the intensifying conflict between the US and China, the Chinese government is promoting the concentration of the semiconductor industry, which can also be used for military purposes, and the presence of related companies will also increase. Therefore, the US government is rushing to improve its country's semiconductor supply chain (supply network) by injecting subsidies and other measures.

The Japanese government will also take strategies to revive the semiconductor industry. The company secured a subsidy budget and attracted foreign semiconductor manufacturers such as TSMC. The government also led the establishment of "Rapidus," which aims to mass produce advanced semiconductors. The key to growth will be strengthening ties with the US, South Korea, Taiwan, and other countries to establish a semiconductor supply network.

Japan's semiconductor industry once accounted for 50% of the world market share. Significant electronics firms such as NEC, Toshiba and Hitachi, Ltd. dominated in memory for storage, and equipment and materials manufacturers clustered in the region.

However, the market share gradually receded after the mid-1990s due to the recovery of US companies and the breakthrough of South Korean and Taiwanese manufacturing companies. Major Japanese electronics suppliers have downsized their semiconductor divisions, and domestic restructuring has reduced the number of players and their global presence. On the other hand, it has maintained a high market share in areas where long-term R&D is essential, such as manufacturing equipment and materials.