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Japanese Chip Gear-Maker Kokusai Looks to Capitalise on 66% Rally as China Demand Surges

Kokusai Electric, a prominent Japanese chip gear-maker, is gearing up to seize the opportunity presented by the booming demand for semiconductors in China.

With expectations of increased demand from the world's largest semiconductor market in 2024, CEO Fumiyuki Kanai is expanding the company's presence in China and bolstering local support teams to better serve clients.

This move comes as Kokusai aims to extend the impressive 66% rally in its stock price since its initial public offering (IPO) just two months ago.

China's push to localise chip production, coupled with the United States' imposition of higher barriers on the export of advanced semiconductors and chip-making equipment, has fueled the country's build-up in the semiconductor industry. Chinese companies have invested billions in factories for legacy chips, which are not prohibited by US sanctions and remain crucial components in various devices, including smartphones and electric vehicles.

Kokusai Electric plays a vital role in the semiconductor production process, specifically in film deposition. This step involves depositing a layer of chemicals on silicon wafers, a critical process in chip manufacturing. With the surge in demand for semiconductors in China, Kokusai aims to capitalise on this opportunity and further strengthen its position in the market.

CEO Fumiyuki Kanai highlighted the rapid growth of small-scale fabrication plants in China, stating that the Chinese government is providing aggressive support to the industry, particularly in areas such as the Internet of Things (IoT), smartphones and personal computers. This support, combined with the increasing demand for semiconductors, presents a favorable environment for Kokusai Electric to expand its operations and cater to the needs of Chinese clients.

In addition to Kokusai Electric's efforts, there is also a growing trend of Chinese semiconductor design companies turning to Malaysian firms for the assembly of high-end chips. These companies are seeking to diversify their supply chains and mitigate risks in case of expanded US sanctions on China's chip industry. Malaysian chip packaging firms are being approached to assemble graphics processing units (GPUs), a type of chip used in various applications.

The collaboration between Chinese semiconductor design companies and Malaysian firms, such as Unisem, majority-owned by China's Huatian Technology, has seen increased business and inquiries. This strategic move allows Chinese companies to tap into the expertise and capabilities of Malaysian firms, ensuring a stable supply of high-end chips.

As the demand for semiconductors continues to surge, driven by various industries' reliance on advanced chips, companies like Kokusai Electric and the collaboration between Chinese and Malaysian firms play a crucial role in meeting this demand.

These developments highlight the dynamic nature of the semiconductor industry and the efforts made to adapt to changing geopolitical landscapes and market demands.


  • Japanese chip gear-maker Kokusai Electric is expanding its presence in China to meet the increasing demand for semiconductors.

  • China's efforts to localise chip production and US export barriers have fueled the country's semiconductor build-up.

  • Kokusai aims to extend its stock price rally and capitalise on the booming demand in China.

Source: SCMP


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