Samsung to Build Chip Development Facility in Japan

$222m investment expected to spur collaboration between Japan, South Korea

Samsung Electronics will build a 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 cost over 30 billion yen ($222 million) and be built in Yokohama, southwest of Tokyo, home to the South Korean company's existing site, Samsung R&D Institute Japan. The development hub will be a separate unit.

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

Specific details are not available other than the 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. The subsidies are expected to total more than 10 billion yen.

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 follows a fresh rapprochement between Seoul and Tokyo 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 this week.

Samsung's top competitor, 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 to achieve a breakthrough in the production process.