The Tokyo-based company aims to secure 10,000 new hires worldwide over the next five years. Image: Bloomberg
Tokyo Electron Ltd. is looking to build a team of chip engineers in India to better leverage the Modi government’s push to ramp up semiconductor manufacturing in the world’s most populous country.
Japan’s largest chip equipment maker plans to hire and train local engineers in or around 2026, and their first task will be to provide technical services to Tata Electronics Pvt, Chief Executive Toshiki Kawai said. Robotics will play an increasing role and local staff will receive in-person and remote support from Japan, he added, without specifying how many people the company would need to hire.
India is stepping up efforts to attract international electronics companies and chip makers to set up facilities within its borders, under a plan by the Narendra Modi administration to close the technology gap with advanced economies. Apple Inc. is accelerating its production and sales of iPhones in the country, while Tata Group and others are investing billions of dollars in semiconductor manufacturing plants. The government is offering incentives to support those companies, which will need machinery and know-how from companies like Tokyo Electron.
Shares of the company, which traded Friday morning without the right to receive its next dividend, rose about 6% after excluding the impact of the payment.
The Tokyo-based company aims to hire 10,000 new hires worldwide over the next five years, as more countries compete to make chips at home. Tokyo Electron supplies equipment to Taiwan Semiconductor Manufacturing Co., Samsung Electronics Co., SK Hynix Inc. and Intel Corp., and its forecast for the business year through March points to record revenue and operating profit. It also expects overall chip demand to double by 2030, driven by artificial intelligence, self-driving cars and a push toward energy efficiency and decarbonization.
This comes even as the United States pressures Japan to further tighten restrictions on exports of advanced chip-making equipment to China, part of an expanded effort to slow its technological progress. U.S. officials have sought to limit Tokyo Electron’s ability to service some of its machines in China and have talked about invoking the Foreign Direct Product Rule, or FDPR, which allows Washington to control sales of products made anywhere. in the world if they use even a small amount. amount of American technology.
Such measures will not affect the global appetite for chip-making machines, Kawai, 61, said. “The importance of semiconductors remains the same,” he said in an interview. “There will always be investments somewhere.”
Tokyo Electron said earlier this month that it will help train Tata Electronics’ workforce on chip-making equipment and support its research and development. Modi’s administration has so far approved more than $15 billion in semiconductor investments, including U.S. memory maker Micron Technology Inc.’s plan for a $2.75 billion assembly facility. Israel’s Tower Semiconductor Ltd. is also looking to partner with billionaire Gautam Adani on a $10 billion manufacturing plant in western India.
Sales to China, which rose to around 50% of Tokyo Electron’s revenue in the June quarter, will likely fall to less than 40% in October-March, and will account for around 25% to 30% going forward. as overall equipment sales increase. Kawai said.
“India will not replace the Chinese market. “It would be growth in addition to China,” he stated.
Tokyo Electron, which makes machines that develop, pattern and clean silicon, is focusing on expanding its market share against rival Applied Materials Inc. The company is seeking certification for mass production of cryogenic etching, which can process NAND memory. stacked at high speeds and is an area led by US competitor Lam Research Corp. The Japanese firm has also gained certification to develop conductor etching for DRAM and cleaning equipment for advanced logic chips.
Tokyo Electron’s share price has fallen since hitting an all-time high in April, and the stock is now up about 7% this year, partly due to fluctuations in investor sentiment toward AI. Demand for servers and other AI-related hardware is very strong, Kawai said. But he said AI is only part of the semiconductor growth story.
“The market is too focused on AI,” Kawai said. “There is a lot of potential for growth.”
First published: September 27, 2024 | 8:10 a.m. IS
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