Stocks involved in Japan’s semiconductor supply chain in Tokyo jumped on Tuesday after a reported that Taiwan Semiconductor Manufacturing Co. chip giant. building an advanced packaging facility in the city together with the Japanese Ministry of Commerce.
Both sides will soon sign a memorandum of understanding and form a 50-50 joint venture for the project, United Daily News in Taiwan statement, not to mention how large an investment could be.
“This would come as a big surprise to Japan’s semifinal sector, including machinery companies and parts suppliers, given the huge investment,” said Kazuyoshi Saito, senior analyst for Iwai Cosmo Securities. “While the scale is not yet clear, we can expect a number of orders, which could accelerate the recovery of Japan’s chip industry.”
Packaging materials company Shinko Electric Industries Co. rose. 6.5%, the biggest gain since April, though Lasertec Corp., which receives 42% of its revenue from TSMC, climbed 4% to another record. Tokyo Electron Ltd arrived. new high as well Nikon Corp., which now owns the precision equipment industry, contributed a larger share of revenue than more experienced camera work, added 4.6%.
TSMC spokeswoman Nina Kao declined to comment, citing the company’s quiet time before it was announced about earnings.
Japan has been encouraging spending in semifinal manufacturing and modern technology as it monitors the effects of national security amid U.S.-China conflict over the technologies – an area unknown to the world. a country despite being a world leader in chip-making equipment and materials.
The Ministry of Economy, Trade and Industry set 110 billion yen ($ 1.1 billion) in fiscal budget 2019 and a further 90 billion yen to an upcoming additional budget to manufacture advanced chips at home.
While traders jumped on TSMC’s report on profitability the agreement will help boost Japan’s competitiveness in the sector, its impact may be limited. A chip assembly plant, while an important stage in the semi-chip production process typically requires far fewer investments than a chip manufacturing facility: the world’s largest chip testing and packaging service provider ASE Technology Holding it spent just under $ 1.6 billion in capital expenditure in 2019, of which TSMC spent approximately 9 times that amount.
Seiichi Miyashita, deputy manager at the IT business department of Japan’s Ministry of Economy, Trade and Industry, said no decision had been made, but that the ministry was aware that Japan needed the ability to manufacture advanced chips at home.
Yomiuri newspaper reported in July last year that Japan had offered several billion dollars in support of TSMC to counter its efforts to build plants in the country. At least one Japanese production group traveled to Taiwan in hopes of convincing the chipmaker to invest, someone familiar with the trip told Bloomberg News last year.
That followed TSMC ‘s decision to build in a $ 12 billion chip plant Arizona uses their 5-nanometer technology, though even that could be several generations old before production begins.
– Supported by Ayaka Maki