Intel Partners with Japanese Companies to Advance Chip Manufacturing Automation

Against the backdrop of geopolitical risks to the global semiconductor supply chain, Intel Corporation announced a partnership with 14 Japanese companies to develop technologies that automate the back-end processes of chip manufacturing. This strategic collaboration aims to improve productivity, reduce costs, and enhance U.S. and Japanese competitiveness in the global semiconductor industry.

The cooperation program is led by Intel Japan President Kunimasa Suzuki, cooperation including electronics manufacturer Omron, Yamaha Motor, and material suppliers Resonac and Shin-Etsu Polymer. and plans to set up a pilot back-end production line in Japan in the next few years, the goal of full automation production. Japanese companies involved in the partnership include electronics makers Omron and Yamaha Motor, as well as materials suppliers Resonac and Shin-Etsu Polymer. The group is expected to invest tens of billions of yen with a view to realizing viable automation technology by 2028.

As the front-end processes of semiconductor manufacturing approach their physical limits, the back-end processes are becoming more competitive. Currently, back-end production such as chip packaging relies heavily on manual assembly, a segment mostly concentrated in labor-rich China and Southeast Asian countries. Intel believes that automation technology is the key to establish factories in the United States and Japan and other countries with high labor costs.

The Japanese government's focus on the semiconductor industry is evident in the fact that about 4 trillion yen has been allocated to support the industry, which is critical to economic security, for the fiscal year 2021 to 2023. Japanese companies have a 30% and 50% share of the global semiconductor production equipment and materials market, respectively. In addition, Japan's Ministry of Economy, Trade and Industry (METI) is expected to provide up to tens of billions of yen in support to promote innovation and development of back-end technologies.

Market research firm TechInsights expects the back-end market to grow 13% this year to $12.5 billion. This growth expectation reflects the market's high expectations for automated back-end technologies. Intel's move will not only help alleviate the shortage of chip engineers in Japan, but also provide an advantage for AI development, as packages with integrated processors, memory, and other features can make them work more efficiently.

Intel's collaboration with Japanese companies epitomizes the automation process in the global semiconductor industry. As technology continues to advance and market demand increases, automating back-end production processes will become key in semiconductor manufacturing. This move will not only help Intel and Japanese companies to occupy a favorable position in the global semiconductor market, but will also promote the transformation of the industry as a whole to more efficient and smarter production methods.