Can Kyocera’s New Semiconductor Factory Overcome Supply Chain Issues?

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Kyocera Corporation recently announced that it has acquired about 37 acres of land for a new smart factory at the Minami Isahaya Industrial Park in Isahaya City, Japan. The company decided it needed to build the new plant in December 2022 after discovering that it would require additional production facilities to meet a rising market demand for fine ceramic components used in semiconductor-related applications and semiconductor packages. The land purchase agreement includes a developed site of about 14 acres, where construction will begin in October of this year, and another 23-acre pre-developed site that Kyocera plans to acquire in 2024.

The factory itself is expected to be a six-story, 150,000 ft² facility that should be completed in 2025 so that Kyocera can begin manufacturing these ceramic components in 2026. While the official release from the company states that this will be a smart factory, there hasn’t been any information provided on what will make it so. We can speculate on the types of augmented reality (AR), artificial intelligence (AI), or other features that will make production smoother and faster but, until something concrete has been mentioned, these will be only guesses.

What we can speculate on is how this will affect the semiconductor market. The COVID-19 pandemic can be blamed for illuminating and exasperating the chip shortage that much of our technology runs on. Much of what we use daily, from smartphones to laptops to automobiles, requires the chips that this Kyocera factory will help produce. While Kyocera is only one company now growing its business, we have seen other initiatives on a global scale that correspond with this decision to create a new factory.

• The US has recently passed the CHIPs bill, which will provide almost $53 billion in subsidies to US semiconductor production and research. The bill also included a 25% investment tax credit and authorizes $200 billion across 10 years for research.
• The European Chips Act seeks to grow Europe’s market share from 10% to 20%, mobilizing €43 billion in public and private investments.
• China is believed to be working on a ¥1 trillion RMB ($143 billion USD) package to support Chinese semiconductor firms. This plan could be implemented as early as this quarter and most of the money would probably be used to subsidize the costs of building factories.

All these initiatives can only help to overcome a lot of the product shortages and supply chain issues that still plague the world market. Kyocera also joins other companies that have recently invested in their own chip production factories in the past few years, including Intel and Texas Instruments in the US, TSMC in Taiwan, SK Hynix and Samsung in South Korea, Kioxia in Japan, as well as Bosch in Germany and PragmatIC Semiconductor in the UK (who is expected to begin production of semiconductors this year). Having all these factories spread out also helps to localize production, further reducing issues brought on by shipping chips across borders and adding to supply chain concerns (like shipping containers bunching at certain locations).

While we might not be ending this shortage of semiconductors and chips, Kyocera’s new factory can only help to shorten how long we need to wait until technology is up and running to its pre-pandemic levels. We are also excited to see how Kyocera’s Isahaya location will engage in smart technology to make the production of these ceramic semiconductors more efficient.

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