Asahi Kasei Ramps Up Production as Semiconductor Market Rebounds

Japanese chemical manufacturer Asahi Kasei is set to invest over $105 million in a new domestic plant to expand its production capacity for semiconductor materials, particularly liquid photosensitive resin, according to Nikkei Asia. 

The company aims to meet the growing demand for this material, under the trade name PIMEL, which is used to protect chip surfaces. As chips become more advanced and stacked, the demand for high-quality resin is rising.  

The new plant will be constructed on an existing site in Shizuoka prefecture, located in central Japan. The facility is expected to commence operations in December of next year, with related inspection facilities scheduled to be operational by April 2024. This investment marks Asahi Kasei's first expansion in the production capacity of PIMEL in approximately 16 years.  

The decision to build a new plant comes as Asahi Kasei's existing facility nears full capacity. In addition, Sumitomo Bakelite, a plastics manufacturer, increased its capacity for liquid photosensitive resin last year. It is estimated that Japanese companies, including Asahi Kasei, Resonac Holdings, and Sumitomo Bakelite, hold a significant share of around 90% of the global market for this resin.  

Asahi Kasei is optimistic about the prospects of its digital business, including chip materials, and expects its operating income to increase by 20% to $153 million in the fiscal year ending March 2024. The company plans to cultivate demand in Asia and the United States, leveraging the increased production capacity to expand its market presence.  

Market research firm Gartner predicts that the global semiconductor market will experience a rebound with its forecasts of 16.8% growth to reach $624 billion in 2024, marking the first increase in two years. The market is projected to further expand to $721 billion in 2025, representing an additional 15.5% increase compared to 2024.  

The recovery is driven by strong medium- to long-term demand stemming from the growth of artificial intelligence, electric vehicles, and other applications.  

Despite a recent slowdown in the chip market following increased production during the pandemic, the industry is recovering due to solid long-term demand. The growth of artificial intelligence, electric vehicles, and other emerging technologies continues to drive the need for advanced semiconductor solutions and Asahi Kasei's investment reflects its confidence in the future of the semiconductor market and its commitment to meet evolving industry demands.