At a time when the semiconductor global supply chain is full of uncertainty, Japan has launched a "semiconductor renaissance" strategy, which will revive its semiconductor industry.

In recent years, the trend of high vertical differentiation has led to the reshaping of the global semiconductor industry. The supply chain fluctuations and lack of core caused by the 2020 epidemic have made all countries aware of the seriousness of the problem and further accelerated the strengthening of the semiconductor industry. The European Commission wants Europe's share of global semiconductor production to double to 20% by 2030; the United States has also held several chip summits, which plan to provide a series of financial and policy support for the development of the chip manufacturing industry.

On the other hand, Japan is also eager to promote its own chip manufacturing.

Taiwan Semiconductor Manufacturing Co Ltd, as the largest wafer manufacturer in the world, has naturally become the focus of all parties. In February, Taiwan Semiconductor Manufacturing Co Ltd announced that he would invest no more than $186 million to open a subsidiary in Japan to expand 3D IC research.

The arrival of Taiwan Semiconductor Manufacturing Co Ltd will undoubtedly revive the morale of Japan's semiconductor industry. Therefore, the Japanese side is not stingy in the subsidies to Taiwan Semiconductor Manufacturing Co Ltd. In order to attract Taiwan Semiconductor Manufacturing Co Ltd to set up a factory in Japan, the Japanese Ministry of economy, Trade and Industry announced that it would invest 37 billion yen (about 2.14 billion yuan) to support Taiwan Semiconductor Manufacturing Co Ltd to set up an R & D center in Japan, half of which will be paid by the Japanese government. With the determination of Japan's subsidy policy, the construction of Taiwan Semiconductor Manufacturing Co Ltd's 3D IC material research and development center in Japan will be accelerated. It is expected that the test production line will be ready in the second half of this year, and formal research and development work will be carried out by 2022.

Recently, the Nikkei News reported that with the implementation of the plan, 20 Japanese semiconductor industry suppliers, including Asahi Kasei, IBIDEN and JSP, will cooperate with Taiwan Semiconductor Manufacturing Co Ltd in the hope of rebuilding the competitiveness of Japanese semiconductors.

Japan regained its former glory

Let's first take a look at these 20 companies to learn about these "invisible champions" in the Japanese semiconductor industry.

According to the above picture, we can see that the above enterprises have advantages in the fields of substrate, photoresist, materials, equipment and so on. Nikkei Chinese data show that in the field of silicon wafers as semiconductor substrates, two Japanese companies, Shinyue Chemical and SUMCO, account for more than 50% of the global share; in the indispensable part of photoresist for integrated circuit production, Japanese enterprises, including JSR and Shinyue Chemical, account for 90%. Japanese companies alone account for more than 40% of the CMP grinding fluid used by Showa Electric and other enterprises for semiconductor surface grinding.

In terms of the number of effective patents for the representative material technologies of the post-process, such as "multilayer circuits" and "packaging materials", the patent research company Patent Result shows that the Japanese enterprises that are in the forefront together with Taiwan Semiconductor Manufacturing Co Ltd and Intel Corp who promote the research and development of post-process technology are Shin Yue Chemical, IBIDEN and Xinguang Electric Industry, and so on.

In terms of equipment, GlobalNet pointed out that Tokyo Electronics alone accounts for nearly 90% of the coating and development equipment, and is the only mass production enterprise in the world. Japanese enterprises account for more than 60% of the cleaning equipment to remove wafer waste and dirt. In terms of dicing machines for post-process equipment, DISCO has a 70% share.

In addition, there are many Japanese companies that have advantages in manufacturing equipment. In 2018, almost half of TOP15 companies in semiconductor manufacturing equipment were Japanese.

The market and data are constantly confirming the absolute advantages of Japanese semiconductor enterprises in materials, equipment and other fields. However, anyone who knows the history of Japan's semiconductor industry knows that today's advantages may only be a microcosm of the glorious era of Japan's semiconductor industry.

Looking back at the history of Japanese semiconductors, we found that in the most glorious era of Japanese semiconductors, it once monopolized about 50% of the global semiconductor industry. In the late 1980s, the United States accounted for three of the world's top ten integrated circuit manufacturers, Japan accounted for six, and South Korea accounted for one. Japan's market share has surpassed that of the United States. Subsequently, the trade friction between the United States and Japan gradually heated up, and the United States waved the stick of "301 investigation" to Japan 24 times. In the face of a series of pressures, the Japanese government began to take a step backwards, signed various treaties one after another, pressed the button for the decline of Japan's semiconductor industry, and then remained depressed for a long time. By 2019, that proportion had fallen to 10 per cent, particularly in manufacturing, which used to be the most dominant.

On the other hand the decline in market share has also been accompanied by a decline in R & D capacity: Japan's research capacity has declined significantly over the past 25 years. According to the data disclosed by SNV, the relative share of Japan's contribution to papers in the IEDM, ISSCC and VLSI conferences is declining, from nearly 40 per cent in 1995 to less than 10 per cent in 2020. Secondly, in terms of paper cooperation, the cooperation papers between the European Union and Japan have been overtaken by China since 2016.

In view of the complex market situation and technical bottleneck of the global semiconductor industry, strengthening international research cooperation may be the inevitable way to overcome the future technological challenges. At a time when research cooperation is playing a more and more important role, Japan seems to be somewhat inadequate.

With the volatility of the external market and the policy measures of various countries, it seems that Japan has rekindled its determination to revive the semiconductor industry, putting the revitalization of the domestic semiconductor industry on the agenda and trying to regain its former glory. Japan, which maintains its advantages in materials and equipment, has focused its attention on the "battleground" of chip manufacturing.

It should be noted that the project that Taiwan Semiconductor Manufacturing Co Ltd cooperates with Japanese semiconductor manufacturers is not chip manufacturing, but the current advanced 3D IC packaging technology. Taiwan Semiconductor Manufacturing Co Ltd leads the group in advanced processes, but does not seem to have established enough advantages in 3D stacking technology. after the establishment of 3D IC R & D stronghold in Japan, Taiwan Semiconductor Manufacturing Co Ltd will also take advantage of Japan's advantages in materials and equipment to further devote himself to the research and development of 3D packaging technology. Japan also hopes to cooperate with Taiwan Semiconductor Manufacturing Co Ltd to help its semiconductor manufacturers maintain strong competitiveness.

Hideki Wakabayashi, a professor at Tokyo University of Science, said: "at present, the added value of the latter process in semiconductor manufacturing is increasing, and if Japan takes the lead in the back end, it will be able to regain its competitive advantage in the semiconductor industry. "

In this regard, 3D integration technology expert, Tadahiro Kuroda, a professor at the University of Tokyo, also believes that if Japanese chip companies can achieve a high degree of complexity in back-end technology, it will also be able to expand to the front process of wafer processing. As a result, the semiconductor manufacturing capacity will be improved as a whole.

Taiwan Semiconductor Manufacturing Co Ltd's abacus

Of course, the deepening cooperation between the two sides will benefit not only the Japanese semiconductor industry, but also Taiwan Semiconductor Manufacturing Co Ltd. In the future, Taiwan Semiconductor Manufacturing Co Ltd will promote technology forward through the further development of cooperation with Japanese enterprises through Japan's advantages in materials and equipment.

When analyzing Taiwan Semiconductor Manufacturing Co Ltd's current situation, Zhihu Inc. 's author "overseas Channel" said that under the normal operation of the horizontal division of labor system and market logic, Taiwan Semiconductor Manufacturing Co Ltd has a deep moat and is not too worried about the catch-up of competitors. However, with the intervention of political forces of all parties, the existing system has changed, and the major countries have begun to put the autonomy and control of semiconductor manufacturing in the first place, which is more important than cost reduction. There is unprecedented uncertainty as to whether Taiwan Semiconductor Manufacturing Co Ltd's moat can still play its due role.

Indeed, Taiwan Semiconductor Manufacturing Co Ltd is in the whirlpool of great power game, so he needs to further optimize the supply chain in the increasingly competitive environment. Taiwan Semiconductor Manufacturing Co Ltd went to Japan to build a factory, probably so. If confirmed, the plant will be Taiwan Semiconductor Manufacturing Co Ltd's first chip manufacturing plant in Japan, where Taiwan Semiconductor Manufacturing Co Ltd generates 4.7 per cent of its revenue in 2020. This also means that Taiwan Semiconductor Manufacturing Co Ltd's market strategy is undergoing a major change.

So, what factors attracted Taiwan Semiconductor Manufacturing Co Ltd to set up a factory in Japan? let's sum up:

(1) Japan has developed semiconductor materials.

Although Japan's semiconductor industry is not as good as before, it still occupies a leading position in the field of semiconductor materials. As mentioned above, especially in the field of photoresist, most of the global market is occupied by Japanese companies such as JSR and Tokyo Yinghua.

Japan can clamp the neck of the global semiconductor industry from the upper reaches of the industrial chain. The previous dispute between Japan and South Korea over semiconductor materials is a warning. After Taiwan Semiconductor Manufacturing Co Ltd set up a factory in Japan, the supply of semiconductor materials can be greatly guaranteed. At the same time, under the current situation of tight supply of chips, semiconductor materials are in short supply. The cooperation between Taiwan Semiconductor Manufacturing Co Ltd and Japan can not only expand the scale of business, but also provide better production capacity for Japanese enterprises, fill the gap in chip production capacity in Japan, and establish more stable relations of cooperation with key materials suppliers in Japan.

(2) provide more production capacity for Japanese enterprises and reduce market risk

Today, Taiwan Semiconductor Manufacturing Co Ltd's most advanced technology has only a few customers in the United States, which increases Taiwan Semiconductor Manufacturing Co Ltd's market risk. Taiwan Semiconductor Manufacturing Co Ltd accounted for 62 per cent of its revenue in 2020 from North American customers. After setting up a factory in Japan, Taiwan Semiconductor Manufacturing Co Ltd will be able to obtain more Japanese orders, promote customer diversification and reduce dependence on American customers.

(3) Taiwan Semiconductor Manufacturing Co Ltd's position is under threat.

Under the influence of geopolitical factors, Europe and the United States, Japan and South Korea and many other countries are exploring the independent control of semiconductors and the development of chip manufacturing, which is bound to have an impact on the status of Taiwan Semiconductor Manufacturing Co Ltd. Under such circumstances, Taiwan Semiconductor Manufacturing Co Ltd chose to build factories in the United States, Japan and other overseas places, which is conducive to maintaining his role and positioning as a "wafer foundry" and trying to stabilize the market pattern will not be broken.

Write at the end

As we all know, the previous semiconductor development mainly focused on the upgrading of the process to compete in the "fine" aspect of improving the processing capacity. However, with the effectiveness of Moore's Law, the development of advanced processes has been delayed again and again. Therefore, the "3D packaging" technology, which condenses functions and improves performance through laminated semiconductors, provides an opportunity to go beyond Moore's Law, and is gradually becoming one of the main battlefields.

Taiwan Semiconductor Manufacturing Co Ltd and the "invisible champions" of Japanese semiconductors come together to plan their own new chapters under the complex technology and market trends.