Japan’s semiconductor manufacturing sector is set to benefit from a new large-scale air separation unit (ASU) to be built by Air Liquide on Naoshima Island, Japan.
The ASU was originally designed to meet the country’s rising demand for copper, an element used in key energy transition technologies such as solar panels, wind turbines, electric vehicle motors and batteries.
The new plant will produce up to 1,400 tonnes of oxygen and nitrogen per day from 2027 to support the production of copper, as well as argon and neon – essential to semiconductor manufacturing.
To be built at Mitsubishi Materials’ Naoshima smelter and refinery, the facility will rank among Air Liquide’s largest oxygen production plants in Japan.
“This ASU demonstrates Air Liquide’s technological expertise and capacity to support the growth of Mitsubishi Materials while strengthening the domestic supply of neon for the semiconductor industry,” said Ronnie Chalmers, Air Liquide Group Vice President, supervising Asia Pacific.
Chalmers also thanked the Japanese government for financial support, “which enables us to leverage the large-scale oxygen production to co-produce argon and neon.”
A new era?
Having once produced over half the world’s semiconductors, Japan’s chip production has declined to just 10% since the 1986 US-Japan semiconductor agreement and the 100% tariffs imposed by the Reagan administration on Japanese memory chips.
However, the country aims to compete with industry leaders such as Taiwan and South Korea after experiencing a renaissance in recent years.
To quote Japan’s Ministry of Economy, Trade and Industry (METI), Japan’s support for its semiconductor sector is a “national project” designed to “ensure Japan remains strategically essential and strategically independent between the US and China.”
This involves investing ¥3.9 trillion ($25.7bn) between 2022 and 2025 to complement a raft of other efforts to revive the industry, including a government-led call for leading chipmakers to onshore their facilities in Japan and a boost in subsidy provisions.
METI has also addressed the decline in its 2021 Strategy for Semiconductors and the Digital Industry, which targets increasing Japan’s domestic chip production capacity.
Japan’s efforts paid dividends early last year, when Taiwanese chipmaker TSMC announced plans to build a second chip factory in the country by the end of 2027, bringing total investment in its Japan venture to more than $20bn.
Analysts from The Alan Turing Institute believe that the success of Japan’s semiconductor policy hinges on the ability for companies to adapt to the growing demand for cutting-edge technologies such as data centre chips.
“Today, data centres – the infrastructure that underpins artificial intelligence (AI) and performs large computational tasks – are beginning to cause profound changes in the semiconductor industry,” writes Hugh Grant-Chapman and Tom McGee.
Advances in AI technology are driving major investments into data centres, with the value of the global data centre market projected to surge from $220bn in 2022 to $428bn in 2030. This is expected to boost revenue from data centre semiconductors by 12% per year during the same timespan.
