Japan's Mitsubishi Chemical Group is embarking on an ambitious plan to construct a new semiconductor materials plant within Japan. The decision is prompted by the surging investments in the chip industry's supply chain, primarily led by Taiwan Semiconductor Manufacturing Co. (TSMC) and other prominent players. This new facility is scheduled to commence operations by the end of the fiscal year in March 2025 and will focus on the production of polymer for photoresist, a fundamental material used during the chip manufacturing process to create circuit patterns.

While the precise location for this new plant has not yet been finalized, potential sites currently under consideration include Fukuoka prefecture in Kyushu, Japan. The estimated investment required for the construction and development of this new facility is projected to reach several billion yen, with each billion yen equating to approximately $6.7 million.

The primary material produced at this cutting-edge facility will be used in argon fluoride laser chip manufacturing, a critical process in the semiconductor industry. Currently, Mitsubishi Chemical exclusively manufactures photoresist material at its Tsurumi plant in Yokohama. It's important to note that Japanese companies that rely on Mitsubishi Chemical's photoresist supplies collectively dominate the global market, boasting a significant 90% market share. One of the key advantages of the Japanese supply chain is its ability to facilitate close collaboration between suppliers and buyers, enabling them to finely tune their products to meet specific requirements and standards.

In tandem with Mitsubishi Chemical's strategic plans, Tokyo Ohka Kogyo, a major supplier of photoresist materials, has made the decision to invest in expanding its production capacity, primarily in Fukushima and Kumamoto prefectures in Japan. These coordinated moves by key industry players occur amid a temporary downturn in the chip industry, partly attributed to a slowdown in smartphone sales.

Despite the current dip in demand, various industry forecasts suggest the possibility of a substantial recovery by 2024, primarily driven by the growing industrial demand for semiconductor chips. In response to these evolving market dynamics, Mitsubishi Chemical has identified specialty materials for the chip industry as a pivotal driver of growth.

As part of its broader corporate strategy, the company is actively reorganizing its petrochemical operations and has set an ambitious target. Mitsubishi Chemical aims to double its EBITDA (earnings before interest, taxes, depreciation, and amortization) for specialty materials to a staggering 223 billion yen by the end of the fiscal year in March 2026, compared to its performance three years earlier. This strategic endeavor underscores the company's unwavering commitment to solidify its position as a key player in the global semiconductor materials industry and to support the ongoing growth and innovation within the chip manufacturing ecosystem.