Samsung to build new chip development facility in Japan

Samsung Electronics will build a new development facility in Yokohama, in a highly symbolic initiative that is expected to spur collaboration between the chip industries of Japan and South Korea, Nikkei has learned.

The new facility will be built at a cost of at least 300 million yen ($222 million) in Yokohama, southwest of Tokyo, home to the South Korean company’s existing facility, Samsung R&D Institute Japan, reports Nikkei Asia.

The new facility will be built separately in the city.

The planned investment will leverage Japan and South Korea’s mutual expertise. Samsung is the world’s largest memory chip maker while Japan is a top producer of basic materials for chip production, such as wafers, and chip-making equipment.

Specific details are not available, other than that the Korean company will build a production line for a prototype chip device.

The new facility will employ several hundred people and aim to start operating in 2025. Samsung is looking to make use of subsidies offered by the Japanese government for semiconductor investment.

Samsung declined to comment.

The move by South Korea’s most valuable company could spur more collaboration between the chip industries of the two countries.

The investment is expected to be a highly symbolic move and follows a fresh rapprochement between the two countries under the leadership of South Korean President Yoon Suk Yeol and Japanese Prime Minister Fumio Kishida. The two leaders are scheduled to meet on the sidelines of the Group of Seven summit in Hiroshima next week. Yoon made a visit to Tokyo in March, and Kishida reciprocated with a visit to Seoul earlier this week.

Samsung’s archrival, Taiwan Semiconductor Manufacturing Co., also made a major investment in Japan in 2021, in a move aimed at diversifying the company’s production base amid concerns about excessive concentration of chip production in Taiwan. TSMC also maintains a research and development facility in Tsukuba, northeast of Tokyo.

Japan, once a global leader in memory chip production, has been trying to rebuild its production base by attracting foreign investment. TSMC and Micron Technology are major foreign investors in Japan and have received subsidies from the Japanese government.

The new facility will focus on the so-called "back end" of semiconductor production. In chip production, electric circuits are first created on a wafer during the front-end process, then the wafer is packaged into a final product during the back-end process.

Traditionally, R&D has focused on the front end of the production process, enabling extreme miniaturization of electric circuits. But many believe there is a limit to further miniaturization and that the focus will shift to improving the back-end process, such as the stacking of wafers into multiple layers, to make 3D chips.

Samsung apparently believes it needs to work more closely with materials and equipment makers in Japan in order to achieve a breakthrough in the production process.