Investment of $276 million Japanese chip equipment maker Disco will build a new factory in Hiroshima Prefecture
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Update time : 2024-01-22 10:43:40
Japanese chip manufacturing equipment maker Disco will build a factory in Japan's Hiroshima Prefecture to produce a component used to process wafers, hoping to capitalize on customer demand and speed up production.
Disco expects to invest more than 40 billion yen ($276 million) and plans to begin construction as early as 2025. The new plant will produce cut-off wheels for dicing, grinding and polishing processes, increasing the company's capacity by 14 times by 2035.
Disco CEO Kazuma Sekiya said, "We will take preemptive measures to respond to the expected increase in demand." Disco is said to have the world's largest share of cutting, grinding and polishing machines. The company purchased a piece of land next to its existing plant in Hiroshima Prefecture in 2023 and plans to build three plants around 2035.
The global semiconductor market is expected to double to $1 trillion in 2030, twice as much as it was in 2023, driven by demand related to artificial intelligence and 5G communication formats, according to industry group SEMI.
For equipment manufacturers, replacement parts offer high margins and bring in steady revenues.Disco reported record sales of 284.1 billion yen in the year ending March 2023, with replacement parts such as cut-off wheels accounting for 20% of the total. Sales of replacement parts have tripled over the past 10 years.
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