The Semiconductor Industry News

"When a Japanese logic chipmaker outsourced production to TSMC, the Taiwanese slashed the number of processes by a third, driving production costs down to an incredibly low level. It's always the same story with Japanese chipmakers. Their obsessive pursuit of excessive quality means unnecessary processes proliferate. Their production systems need far more equipment and people than those of competitors elsewhere. If that's how you run your business, you can't expect to make a profit," said Akira Minamikawa, vice president of iSuppli Japan.

Samsung Electronics, the South Korean juggernaut, has developed a bendable large-size display based on research by a team led by Sumio Iijima, a professor of Meijo University in Nagoya. Professor Iijima, the discoverer of the carbon nanotube, which is the quintessential nanomaterial, is a favorite to receive a Nobel Prize in the near future. Note that his latest achievements are not being applied by a Japanese company but will flourish as technology championed by Samsung.

"It may have been how an industrializing Japan did things back in the Meiji era when it set up Yahata steel plant or Tomioka silk works, but it's certainly a big surprise today. The Japanese government is not usually in the habit of directly subsidizing plant construction by private companies. The Ministry of Economy, Trade and Industry (METI), however, has broken with tradition by granting subsidies to green energy-related businesses," said Emiko Sakata, Associate at the Kansai Branch of the Development Bank of Japan Inc. (DBJ), who is a keen observer of METI's efforts to give green technology a helping hand.

Nichia Corp. has reported big drops in sales and operating profit for fiscal 2009 ended March, but this fiscal year it plans to spend 40 billion yen (US$400 million) in an unprecedented investment spree to expand LED production to cope with anticipated runaway demand.

"70% of global production of 34 important digital consumer items is now concentrated in China. The country supplies 90% of the world's PCs, having replaced Taiwan, previously the major PC producer. No company can flourish without businesses focused on China," said Noriyoshi Kuromasa, a veteran China watcher who is Shanghai bureau chief of Semiconductor Industry News.

Nichia Corp. plans to expand LED production fourfold to 50 billion units per year when a new fab under construction at its headquarters in Anan, Tokushima Prefecture, comes on stream in spring 2012.

"With the semiconductor industry definitely headed for a V-shaped recovery and equipment investment running at roughly double last year's level, the looming problem is an acute shortage of equipment. And that problem may snowball into a panic sometime around September," said Akira Minamikawa, vice president of iSuppli Japan K.K., one of the most seasoned analysts of the Japanese semiconductor industry.

"I believe Japanese companies have a big lead in powder process technology over their competitors worldwide. Rechargeable battery technologies for automotive applications, notably lithium-ion and nickel-metal hydride batteries, are grabbing attention worldwide. And in terms of materials, Japan is way out in front."

"Unless Japanese companies pursue bold strategies, you can expect Korean and Taiwanese rivals to make major inroads in the light-emitting diode (LED) market that Japan has cultivated and currently dominates. Why aren't Japanese firms unveiling big investment plans?" frets a salesman of a producer of compound materials for LEDs.

"Living in a country blessed with plenty of fresh water, few Japanese know that the struggle to secure water resources is triggering conflict around the globe. Only 2.5% of our planet's water is the fresh drinkable stuff. The rest is salty sea water," said Yukiko Kada, governor of Shiga Prefecture.