"Catch ASML" Japan's Canon to Build New Semiconductor Equipment Factory... Investing 500 Billion Won

[Asia Economy Reporter Jeong Hyunjin] Japanese semiconductor manufacturing equipment company Canon is investing over 500 billion won to double its production capacity by 2025. Canon is a company that manufactures lithography equipment (used for semiconductor circuit formation), similar to the Dutch ASML, which is known as the 'super subordinate' in the semiconductor industry. Canon plans to develop next-generation equipment capable of producing advanced microcircuits at low cost, alongside the construction of a new factory.

According to the Nihon Keizai Shimbun on the 5th, Canon will build a new factory in Tochigi Prefecture, southeastern Honshu, Japan. Canon currently produces lithography equipment at two locations in Japan: the Utsunomiya and Ami offices. The new factory will be built on vacant land within the Utsunomiya office site for the first time in 21 years. Construction is scheduled to start in 2023, with operations aimed to begin in spring 2025, and the investment cost is expected to be in the mid-50 billion yen range (approximately 500 billion won).

According to reports, Canon's semiconductor lithography equipment sales volume this year is expected to increase by 29% from the previous year to 180 units. The Nihon Keizai Shimbun reported that this scale has quadrupled over the past 10 years due to the surge in semiconductor demand. Canon plans to significantly increase the number of equipment produced at its two domestic offices through the new factory construction to meet demand.

Semiconductor lithography equipment is used in the core semiconductor process of circuit formation. When manufacturing semiconductors, circuits are etched onto wafers using light, and this equipment is necessary for that process. In the lithography equipment market, Canon ranks second in market share after the Dutch semiconductor equipment company ASML. ASML holds about 60%, and Canon about 30%, maintaining a high market share. With global semiconductor companies such as Samsung Electronics, US-based Intel, and Taiwan's TSMC announcing new factory plans, Canon's decision to expand production capacity is interpreted as a response to the growing equipment demand.

Along with the new factory construction, Canon is developing next-generation equipment aimed for production in 2025. The technology Canon is focusing on is 'nanoimprint,' a technique that stamps a nano-patterned mold (a type of stamp) onto wafers or flexible films to imprint nano-scale circuits for next-generation semiconductors and displays. The Nihon Keizai Shimbun explained that compared to existing lithography processes, this method offers lower manufacturing costs and simpler manufacturing processes to form advanced microcircuits. Canon is leading the development with participation from Kioxia and Dai Nippon Printing.

The Nihon Keizai Shimbun stated, "Although ASML's extreme ultraviolet (EUV) lithography equipment is essential for advanced semiconductor manufacturing, it is expensive and consumes a lot of power. If nanoimprint technology is commercialized, it is expected to reduce lithography process manufacturing costs by up to 40% and power consumption by up to 90% compared to EUV." It added, "Canon aims to expand nanoimprint sales to topple ASML's dominance."