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Japan's Toppan to Construct Chip Package Substrate Plant in Singapore
Toppan Holdings plans to build a semiconductor package substrate plant in Singapore, joining other Japanese substrate makers. The investment in the plant is estimated to be around 50 billion yen (US$338 million). The new facility is expected to create 200 jobs and its capacity will be expanded in line with demand.
Toppan Holdings, a Japanese printing and materials group, has announced plans to build a semiconductor package substrate plant in Singapore. The plant is expected to commence operations by the end of 2026, joining other Japanese substrate makers in capitalising on the growing demand for artificial intelligence-related products. While the exact investment figure has not been disclosed, it is estimated to be around 50 billion yen (US$338 million).
The new facility is projected to create 200 jobs and its capacity will be expanded in line with demand. Toppan aims to invest over 100 billion yen in the future, indicating its commitment to meeting the increasing market needs. Notably, U.S. semiconductor giant Broadcom, a key customer of Toppan, may provide financial support for capacity expansion in the future.
Currently, Toppan produces package substrates solely at its plant in Niigata prefecture, Japan. The decision to establish a plant in Singapore is strategic, as it will be located near back-end processing contractors in Malaysia and Taiwan, who handle semiconductor assembly and testing. This proximity will enhance operational efficiency and streamline the supply chain.
Toppan's objective is to boost its overall substrate production capacity by 150% by fiscal year 2027 compared to fiscal year 2022. This will be achieved through the expansion of the Niigata facility and the establishment of new facilities. The company aims to meet the growing demand for package substrates that can handle increased circuitry density, as the industry moves towards larger and more complex chips.
The chip substrate market is projected to reach US$29 billion by 2028, representing a 90% increase from 2022, according to French research firm Yole Intelligence. This growth is driven by advancements in communication technology, artificial intelligence, and other fields that rely on semiconductors.
Toppan is not the only Japanese company investing in package substrate manufacturing. Ibiden plans to commence operations at a new factory in Gifu prefecture in fiscal year 2025, with an estimated investment of over 100 billion yen. Shinko Electric Industries is also investing 140 billion yen to expand production at existing factories and build a new plant in Nagano prefecture, scheduled to start operating in October 2024.
Japanese companies have a strong presence in the FC-BGA (flip chip ball grid array) substrate market, holding a 40% share of global production capacity, according to Techno Systems Research. Ibiden leads with a 17% share, followed by Shinko Electric with 12%, Kyocera with 4%, and Toppan with 3%. Taiwanese companies also hold a significant share of 40%, with Unimicron at 19% and Nan Ya Printed Circuit Board at 12%.
Toppan received support from the Singaporean government and Broadcom, who were previously headquartered in Singapore until 2018, in selecting the site for the new plant and hiring personnel. This strategic move not only strengthens Toppan's business continuity plan but also expands its production capabilities to meet the growing demand for chip package substrates.
Toppan Holdings plans to build a semiconductor package substrate plant in Singapore, joining other Japanese substrate makers.
The investment in the plant is estimated to be around 50 billion yen (US$338 million).
The new facility is expected to create 200 jobs and its capacity will be expanded in line with demand.
Source: NIKKEI ASIA