Japan is re-emerging as a global hub for semiconductor production and research and development (R&D). Analysts suggest that the ecosystem of materials, components, and equipment is a strong enough incentive to overlook the risks posed by earthquakes.
According to industry sources, Samsung Electronics has opened a next-generation semiconductor packaging R&D center in Minato Mirai, Yokohama. The company plans to invest 40 billion yen (approximately $329 million) by 2028, with half of that amount supported by the Japanese government. A total of 95 researchers from South Korea and Japan will work at the facility, which aims to expand joint development with local materials and equipment companies and research institutions.
SK Hynix is also considering establishing a factory in Japan. Local media have reported on the potential for a memory production base in Japan, following discussions in February and again last month. While SK Hynix denied the rumors in February, it acknowledged last month that it is exploring various options, including securing additional production bases, although no decisions have been finalized. Chey Tae-won, chairman of SK Group, has indicated that he is reviewing multiple candidate sites in Japan, suggesting that the investment discussions are serious.
Some argue that Japan's frequent earthquake risks make it an unsuitable location for semiconductor factories. A 7.1 magnitude earthquake struck Kumamoto on July 28, causing TSMC's subsidiary JASM and production facilities of Sony and Renesas to halt or reduce operations.
However, many view the earthquake risk as manageable. TSMC's Kumamoto plant resumed normal production on August 3 after equipment inspections. Sony significantly shortened its recovery time from the 2016 earthquake, which had taken over three months, thanks to improved seismic reinforcement and repeated training based on past disaster experiences.
Japan's competitive edge in semiconductor materials, components, and equipment is a significant advantage. According to data from Japan's Ministry of Economy, Trade and Industry, Japanese companies hold 31% of the global semiconductor manufacturing equipment market and 48% of the major materials market. Shin-Etsu Chemical and SUMCO are among the top two global suppliers of silicon wafers, while Tokyo Ohka Kogyo is a leader in photoresists. Ajinomoto's subsidiary supplies about 95% of the global market for advanced packaging substrate insulation materials.
In the era of AI semiconductors, the importance of proximity in collaboration has increased. As it becomes more challenging to enhance performance solely through advanced processes, the utility of high-bandwidth memory (HBM) and advanced packaging that combines multiple chips has grown. The need for chip manufacturers and materials and equipment companies to align material properties and processes from the early stages of development has heightened the value of research hubs close to suppliers. This industrial shift is cited as a reason for Samsung's decision to expand its packaging R&D base in Japan before establishing production lines.
The Japanese government's support is also a crucial factor. The Yokohama research center's investment is half funded by the government. Japan has allocated up to 732 billion yen in support for TSMC's second Kumamoto plant and plans to invest over 10 trillion yen in public support for the AI semiconductor sector by 2030. This strategy aims to attract foreign companies, connect them with domestic suppliers, and stimulate further related investments.
The supply chain conflict between South Korea and Japan, which arose from Japan's export restrictions on semiconductor materials in 2019, has also shifted. The two countries normalized related regulations in 2023. While the risk of concentrating supply chains in one country remains, industry experts emphasize that as AI competition accelerates, the speed of joint development with necessary materials and equipment companies has become increasingly important.
Kim Yang-pyung, a senior researcher at the Korea Institute for Industrial Economics and Trade, stated, "The semiconductor industry has limitations in processing all operations within a single country, unlike in the past. We must explore growth strategies through collaboration with Japan."
* This article has been translated by AI.
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