Intel's New Venture in Japan: Pioneering Automation in Chip Manufacturing by 2028

Intel Corp INTC Intel has partnered with 14 Japanese companies, including Omron and Yamaha Motor, to develop automation technologies for back-end semiconductor processes like packaging. 

Under the leadership of Kunimasa Suzuki, who heads Intel’s operations in Japan, this consortium plans to allocate tens of billions of yen—potentially over 10 billion yen ($65 million)—to achieve operational technology by 2028. 

The focus is to enhance the traditionally labor-intensive back-end steps, such as chip stacking, which are crucial as front-end techniques like circuit formation approach their physical limitations, Nikkei Asia reports.

This strategic move aims to mitigate geopolitical risks in the U.S. and Japan’s semiconductor supply chains by transitioning back-end production tasks, usually performed in labor-rich countries like China and Southeast Asia, to automated systems suitable for higher-cost locations like the U.S. and Japan. 

The collaboration anticipates setting up a prototype automated back-end production line in Japan within the next few years, with plans to standardize the technology for seamless integration across manufacturing, inspection, and handling processes.

The project is financially supported by Japan’s Ministry of Economy, Trade and Industry and may receive governmental funding of several tens of billions of yen. 

Microsoft Corp MSFT plans to invest $2.9 billion in Japanese data centers by 2025, marking its most significant investment in the country. This announcement coincided with Japanese Prime Minister Fumio Kishida’s visit to Washington, highlighting the global focus on AI and domestic computing capabilities.

During Kishida’s visit to the Kumamoto plant, Taiwan Semiconductor Manufacturing Co TSM CEO C.C. Wei declared TSMC’s target to source 60% of its materials locally by 2030 for its first chip manufacturing facility in Japan.

The Japanese government has heavily backed this venture, contributing ¥476 billion ($3.1 billion) to establish TSMC’s first factory and an additional ¥732 billion in subsidies for a second fabrication plant in the area. 

Amazon.Com Inc AMZN AWS has also disclosed plans to invest about 2.3 trillion yen ($15.5 billion) in Japan from 2023 to 2027. This investment will focus on expanding data centers and enhancing AWS’s business operations within the country.

Price Action: INTC shares traded lower by 0.24% at $30.90 at the last check Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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