Japanese chemicals company sees potential niche in EUV chip making materials
26/07/2023 24:00
By Sam Nussey and Miho Uranaka
TOKYO, July 26 (Reuters) - Osaka Organic Chemical
Industry 4187.T , a Japanese manufacturer of high-end
chemicals used in chip production, is betting on the materials
market for extreme ultraviolet (EUV) lithography, a method for
making advanced chips.
Little known even in its home country, Osaka Organic has
carved out a critical niche in the semiconductor industry by
supplying companies that make photoresists, the light-sensitive
chemicals used to etch patterns on wafers.
It already has a 70% share of the market for the argon
fluoride (ArF) monomers used in photoresists and now aims to
grow in chemicals for EUV resists - an area becoming
increasingly important as the global semiconductor industry is
seen doubling in value in the decade to 2030.
"I am confident that we can compete," Masayuki Ando, Osaka
Organic's president, told Reuters in an interview, referring to
the EUV resist market.
In many ways, Osaka Organic is emblematic of Japan's
chip-making industry today. The world's third-largest economy
was once a global giant in making chips before ceding dominance
to U.S., Taiwanese and South Korean rivals.
But Japan still retains a lockhold on crucial parts of the
supply chain, such as chip-making tools and materials including
specialised chemicals prized for their purity.
The government, however, wants to see a bigger footprint for
the industry with backing for chip foundry venture Rapidus and
foreign chipmakers such as TSMC 2330.TW locating production in
Japan.
Last month JSR Corp 4185.T , a leading photoresist maker,
announced a plan to go private with investment from a
government-backed fund driving speculation about potential
consolidation in the sector.
Ando said that the competitiveness of Japan's material
makers did not depend on size. "For materials it's not about
chasing scale to reduce costs but about technical ability," he
said.
Companies without technical ability "will be weeded out
naturally," he said.
The company's shares have gained 40% year-to-date.
"(Osaka Organic's) EUV business is ramping up right now so
it can outperform the growth ratio of the EUV photoresist market
itself," said Yuta Nishiyama, an analyst at Citigroup, who
forecasts a market compound annual growth rate of 30-40%.
($1 = 141.5000 yen)
(Reporting by Sam Nussey and Miho Uranaka; Editing by David
Dolan and Miral Fahmy)
((sam.nussey@tr.com;))