Today, semiconductor chip manufacturers in Japan seem to weaken their manufacturing capability. Core competence in Japan is Monozukuri (Manufacturing in Japanese), rather than design capability. However, most of Japanese management in this industry is discarding its core competence. What capability will they strengthen? Unfortunately, we merely look at it. This leads to weakness of Japanese semiconductor industry.

Fig Yaskawa Electric's pick & place machine in SEMICON Japan, thanks to higher chip integration on the two boards

Semiconductor equipment industry is still stronger globally rather than chip industry. The equipment industry enjoys their global revenue; non-Japan revenue is higher than domestic one. Overseas companies make use of a lot of equipment made in Japan. Out of the industrial market, the semiconductor equipment industry is one of promising areas in fact. While the consumer market is so unstable as big wave; better or worse, the industrial sector is stable; not so better, but not so worse. Value-added companies such as Linear Technology push shifting from a consumer to industrial sector.

The promising equipment sector consists of many electronics technologies including robotics, controlling, instrumentation, communication & networking and computing. Robotics includes mechanical engineering such as linear motion, bearing and other components, relay and other electro-mechanical components, and semiconductor chips, as well as controlling boards.

Robotics and machinery components are sold to equipment makers which sell equipment to chip manufacturers through assembling many components. Until now, there is a flow from a top level to bottom level; from electronic devices, to semiconductor chips, to process equipment and materials, to mechanical and electrical components. Now process equipment and component manufacturers make use of semiconductor chips, equipment manufacturers are one of customers of semiconductor chips.

SEMICON Japan seams to review the Show concept. Until now, chip makers are customers of manufacturing equipment makers, but they are suppliers of equipment makers now. So, the equipment makers should be a big customer as a chip manufacturer in the Show. Overseas chip companies start to review the relationship with equipment manufacturers; chip makers are customers and also suppliers simultaneously. It was hard for me to find chip engineers in the SEMICON Japan 2012.

The exhibition is shrinking in every year, different from previous era. Japanese chipmakers are shifting to less manufacturing capability as a fab-lite strategy, and discarding finer line technologies.

On the other hand, semiconductor chips are proliferating to many areas. Even in an industrial equipment sector, semiconductor chips are applied for new machines. This means the industry have to review a relationship of chip makers and equipment makers. This leads to a new idea that exhibitors in SEMICON Shows may include chip vendors who want to enter an industrial sector. This is a big change of the SEMICON Japan 2012, I believe.

Kenji Tsuda, January 11, 2013.