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Japan-Update

Japan's Toppan to make advanced chip-printing tech in China

Local production will speed delivery and boost exposure to growing market

TOKYO -- Toppan Printing will make high-grade photomasks, used in printing semiconductor circuits, in China beginning in fiscal 2018, aiming to speed up deliveries there as the country gains prominence in the global chipmaking industry.

Photomasks are opaque plates with cutout patterns that let light shine through to etch circuit patterns onto silicon wafers. The Tokyo-based printing company aims to lift its share in China's photomask market to 70% by 2020, up from 50% now.

Thinner circuit lines make semiconductors more powerful. At present, the finest photomasks Toppan makes in China -- at facilities in Shanghai -- can produce lines as thin as 90 nanometers. But as early as the spring, it seeks to crank out plates capable of 65nm lines in the country, with 14nm ones to follow in the fiscal year starting in April.

The company will tote some Japanese equipment to China and will build new facilities there as well. Its investment may total several billion yen (1 billion yen equals $9 million).

Toppan has thus far made its most advanced photomasks at production hubs in Japan or Taiwan, then exported them to China. Making them locally will eliminate customs procedures, allowing for delivery as much as three days faster.

Over the next several years, more than 10 new semiconductor plants are expected to begin operating in China, including under major contract chipmaker Semiconductor Manufacturing International Corp. In 2017, China accounted for just 3% of global demand for photomasks, according to industry group SEMI, but some expect that proportion to rise to 20% by 2020.

Toppan is beefing up operations in the profitable photomask sphere as its ancestral business in commercial printing contracts. By making advanced plates in China, it strives to lift output there to slightly more than 20% of total sales, up from 10% currently, as well as expand its share of the global market to 40% from just over 30%.

Dai Nippon Printing, a Japanese rival in photomasks, also plans to pour 18 billion yen into the Chinese market over the next half decade. It will build a factory in Fujian Province, aiming to start mass production in spring 2019. Dai Nippon trails Toppan in the global market with a share of about 30%.

(Nikkei)

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