Japanese small suppliers become big winners in the global core shortage crisis


Tencent technology news on March 13, with the global chip shortage crisis spreading from the automotive industry to home electronics and other fields, a number of small Japanese suppliers are benefiting from it to meet the surging demand.
During the novel coronavirus pneumonia mobile phone, people stayed at home to push demand for computer, smart phones and games, which in turn led to a shortage of semiconductors in other industries. Several big car makers have been forced to cut production. Worldwide, the auto industry could lose $60 billion in sales in 2021, according to market research firm IHS Markit.
“Chip suppliers are doing well because orders for chips for cars and large household appliances are increasing,” said Shoichi Arisawa, an analyst at Iwai Cosmo securities in Japan In addition, the automotive industry is embarking on a long-term transformation to add more high-performance chips to the 5G wireless and autopilot system.
In Japan, orders from chip back-end manufacturers such as towa will pick up in the second half of the coming fiscal year (October or later), Shouichi Arisawa said. The following suppliers are considered to be the most likely beneficiaries:
Towa mainly manufactures semiconductor molding machines, including packaging, IC inspection units and plastic molds. The Kyoto based company, one of the world’s top suppliers of molding technology, uses resin transfer to seal chips, which are used in automotive electronics, including electronic control units for engines.
In fy2020, towa generated 87% of its revenue from semiconductor manufacturing. The company had an operating profit of 1.2 billion yen (US $11 million) in the fourth quarter to the end of December last year, and raised its profit forecast for the fiscal year. The share price rose 78% last year.
Lasertec develops tools for checking and measuring semiconductor photomasks, which are used to transfer circuit patterns to wafers. The company is also the only testing machine manufacturer in the world to verify the design of extreme ultraviolet (EUV) lithography chips.
Headquartered in Yokohama, lasertec began developing X-ray television systems in 1960. The company has overseas offices in the United States, Germany, South Korea, China and Singapore, with sales in Asia excluding Japan accounting for 65% of revenue.
In a report last month, Masahiro wakasugi, an analyst at blog intelligence, said lasertec will play a key role in EUV lithography. Both TSMC and Samsung use EUV lithography to make chips for apple.
In the first half of fy2021, lasertec’s sales, profits and orders all hit record highs, with EUV related products driving delivery. The company also raised its full year operating profit forecast to 20 billion yen (183 million US dollars) in February. The share price rose 118% last year.
ADVANTEST manufactures semiconductor test equipment and electronic measuring instruments. In 2019, its automatic test equipment used to verify the quality of chips will account for more than half of the global share.
The company’s net sales in fy2020 have increased from y162 billion (US $1.49 billion) in fy2016 to y276 billion (US $2.5 billion). The company aims to achieve sales of 300 billion to 400 billion yen (about 2.75 billion to 3.67 billion US dollars) and an operating profit margin of 22% by 2027 by expanding its business beyond chip production and testing equipment. Outside Japan, sales in Asia accounted for about 86% of its revenue.
The company raised its operating profit forecast to y67 billion (US $610 million) in January, exceeding analysts’ forecasts. In fy2020, the semiconductor business accounted for more than 70% of the company’s revenue. The share price rose 25% last year.
Rorze develops and markets automation systems for the production of semiconductors and flat panel displays, such as circuit board conveyors and chip processors. Its main products are robots that transport wafers and masks, including systems that produce low particles to minimize pollution to support the production line.
Chip automation products account for more than half of rorze’s sales, with operating profit of 2.7 billion yen (about $24.77 million) in the quarter to November last year. The company completed construction of new offices and factories in South Korea in February, and its share price jumped 53% last year. (Tencent technology reviser / Jinlu)