Japan's biggest chip equipment maker plans expansion in India

Japan's biggest chip equipment maker plans expansion in India
27 Sep 2024

Tokyo Electron, Japan's leading chip equipment manufacturer, is planning to expand its operations in India.

The move comes as part of the company's strategy to capitalize on Prime Minister Narendra Modi's initiative to boost semiconductor production in the country.

CEO Toshiki Kawai has revealed plans to recruit and train local engineers by 2026, who will initially offer technical services to Tata Electronics.

Tokyo Electron's role in India's tech advancement
Strategic collaboration

Kawai has emphasized the increasing role of robotics in their operations, and assured that the local team will receive both on-site and remote assistance from Japan.

This expansion aligns with India's broader strategy to attract global electronics firms and chipmakers, as part of its effort to bridge the technological gap with advanced economies.

Companies like Apple are already enhancing their production capabilities in India, while others like Tata Group are investing heavily in semiconductor fabrication plants.

Tokyo Electron's global hiring spree and market forecast
Growth projection

Tokyo Electron, a key supplier to giants like Taiwan Semiconductor Manufacturing Co., Samsung Electronics, SK Hynix, and Intel Corp., aims to hire 10,000 new employees worldwide over the next five years.

The company's business forecast for the fiscal year ending in March indicates record revenue and operating profit.

Kawai predicts that overall chip demand will double by 2030 due to advancements in artificial intelligence (AI), autonomous vehicles, and a shift toward energy efficiency and carbon neutrality.

Tokyo Electron's commitment amid US-China tech tensions
Market resilience

Despite US pressure on Japan to tighten restrictions on exports of advanced chipmaking equipment to China, Kawai remains confident about the global demand for chipmaking machines.

"The importance of semiconductors remains unchanged," he stated in an interview. "There will always be investment somewhere."

This statement underscores Tokyo Electron's commitment to its expansion plans, even amidst geopolitical tensions.

Tokyo Electron's training partnership and market prospects
Future outlook

Earlier this month, Tokyo Electron announced its commitment to train Tata Electronics' workforce on chipmaking equipment and support its research and development.

Kawai also clarified that while sales to China constituted around 50% of the company's revenue in the June quarter, they are expected to drop below 40% in October-March.

He emphasized that India's growth would be an addition to China, not a replacement.