"Samsung Can't Win"... Japan Goes All-In on Power Semiconductors, Key Technology for Electric Vehicles

High Barrier Between Korea and Taiwan in Memory Semiconductor Sector
Leading Market by Leveraging Strengths in Device Field
Power Semiconductors Key to Improving Electric Vehicle Performance
Three-Strong Structure with Germany and US... Large-Scale Investment Expected
Market Expected to Grow 2.6 Times by 2030

Kishida Cabinet to Invest 12 Trillion in Semiconductors
Fostering Next-Generation Silicon Carbide Semiconductors
Calls for Increased Government Support to Revive Prestigious Companies

[Image source=Reuters Yonhap News]

Japanese semiconductor companies are rapidly entering the power semiconductor market, which is booming with the advent of the electric vehicle era. Power semiconductors, which have not received much attention until now due to the lack of need for advanced processes and lower profitability compared to memory semiconductors, are seeing a surge in demand as the electric vehicle market grows rapidly.

Japanese companies believe they have little chance of winning in the memory semiconductor sector, which is already dominated by South Korea and Taiwan, and plan to leverage their strengths in materials and device fields to take the lead in the power semiconductor market.

"Power Semiconductors to Grow 2.6 Times by 2030"

Power semiconductors refer to semiconductors used to convert electricity into power. Even within the same product, the way voltage and current flow differs by component, so power semiconductors play the role of adjusting voltage and controlling the flow of current.

Until now, power semiconductors were mainly used in white goods, but they have now become essential core components for improving electric vehicle performance. Among these, the next-generation silicon carbide (SiC) semiconductor, which uses artificial compounds as materials, is characterized by significantly higher power efficiency compared to conventional semiconductors that use only silicon, a single element.

According to a survey by Japan's Fuji Keizai, the global power semiconductor market is expected to grow 2.6 times from 2.3386 trillion yen this year to 5.3587 trillion yen by 2030. Among this, the next-generation silicon carbide power semiconductor market is predicted to grow 12.8 times from 120.6 billion yen this year to 969.4 billion yen by 2030.

Japanese companies see the current surge in electric vehicle demand as the right time to expand the power semiconductor market and are intensifying production. On the 1st, Nihon Keizai Shimbun reported that Japanese semiconductor company ROHM has started mass production of next-generation silicon carbide power semiconductors.

Toshiba plans to invest about 80 billion yen from 2020 to 2023 to increase production at its Ishikawa Prefecture plant by 30% compared to current levels. They aim to expand silicon wafer production, used as semiconductor substrates, from 150,000 to 200,000 sheets per month and increase sales from 150 billion yen annually to 200 billion yen.

Fuji Electric will invest 120 billion yen domestically and internationally during the same period to increase silicon wafer process production capacity by 30% compared to 2019.

Mitsubishi Electric, which holds the world's second-largest market share in the IGBT (Insulated Gate Bipolar Transistor) module sector, a type of power semiconductor, plans to increase production by acquiring Sharp's factory. Additionally, it established a new factory last year with an investment of 20 billion yen, which began operations in November.

Although Japan lags behind South Korea and Taiwan in memory semiconductors, it holds a strong position alongside Germany and the United States in power semiconductors. Japan plans to further solidify its leadership in this market by expanding investment in power semiconductors.

Samsung Electronics and TSMC, which have been fiercely competing in the 7-nanometer (nm) memory semiconductor market by increasing technological difficulty every two years, are now competing over 3 nm technology. Japanese companies, which dominated the semiconductor market until the 1980s, currently only produce leading semiconductors at 40 nm.

However, Japan still holds a significant market share in the power semiconductor field. According to the UK market research firm Omdia, the global power semiconductor market is about 15.36 trillion won in size, with three Japanese companies?Mitsubishi, Toshiba, and Fuji Electric?holding 20% of the market. Although Japan lags behind Samsung Electronics and TSMC in fine process technology, its strengths in producing core semiconductor materials and equipment have allowed it to secure competitiveness in the power semiconductor market.

Japanese Government to Invest 12 Trillion Won in Semiconductors

Meanwhile, the Japanese government has launched full-scale support for companies to foster semiconductor competitiveness. This is based on the judgment that they cannot remain passive if they want to secure a stable supply of semiconductors, which are key to economic security and major resources for future industries.

Japanese Prime Minister Fumio Kishida. [Image source=Asia Economy]

The Kishida Fumio Cabinet approved a second supplementary budget for the next fiscal year on the 8th, allocating 1.3 trillion yen (12.2764 trillion won) to the semiconductor industry. Initially, with a budget of 370 billion yen, they plan to build a supply chain to secure silicon wafers, essential components of power semiconductors, and silicon carbide used in next-generation power semiconductors.

Japan is collaborating with the United States and investing 350 billion yen to establish semiconductor research hubs to enable production of 2 nm semiconductors from the late 2020s. In addition, they plan to provide substantial subsidies worth 450 billion yen to help semiconductor companies secure production bases domestically.

This includes financial support for TSMC, which plans to build a factory in Japan, Japan's Kioxia, ranked third globally in NAND flash, and the U.S. company Micron Technology. They will also provide 70 billion yen for research and development base maintenance costs to an advanced semiconductor company established by eight major Japanese companies, including Toyota Motor and Sony.

Nihon Keizai analyzed that for Japan to regain semiconductor competitiveness after losing to South Korea and Taiwan in fine process technology, continuous full support from the Japanese government is essential. According to a survey by the U.S. Semiconductor Industry Association (SIA), Japan spends 20-40% more operating memory semiconductor factories compared to China or South Korea. Nihon Keizai pointed out that this is due to Japan's government support policies lagging behind those two countries.

Nihon Keizai emphasized, "South Korea and China find it easier to operate semiconductor factories than Japan in terms of land prices, construction materials, labor costs, and taxes. In the semiconductor industry, national investment power and subsidies greatly influence competitiveness, so the government must invest hundreds of billions to trillions of yen in new factory construction."

This content was produced with the assistance of AI translation services.