From Nikkei Asia news: https://asia.nikkei.com/Business/Tech/Semiconductors/Japan-s-Toppan-shifts-image-sensor-component-production-to-China
Japan's Toppan shifts image sensor component production to China
TOKYO -- Japan's Toppan Holdings has moved production of components for CMOS image sensors from Japan to China, aiming to boost local production 40% as Beijing looks to bolster its supply chains for related technologies.
CMOS -- complementary metal-oxide semiconductor -- sensors convert light captured by camera lenses into electrical signals. Among CMOS components, Toppan produces on-chip color filters (OCF) that colorize captured images and microlenses that increase light-gathering power. Without OCF, CMOS can only detect differences in light level.
Toppan brought related equipment from its plant in Japan's Kumamoto prefecture to a facility in Shanghai and increased production lines from five to seven. They do not fall under U.S. export restrictions targeting China for advanced chipmaking equipment.
The Kumamoto plant will be used for research and development and its approximately 370 employees will be maintained.
The global CMOS market in 2022 was around $21.2 billion, according to French research firm Yole Intelligence. Sony Group leads with a 42% market share, followed by Samsung Electronics with 19% and U.S.-based Omnivision with 11%.
China's presence among top companies is limited to seventh-place GalaxyCore with 4% and eighth-place SmartSens with 2%. While Sony and Samsung manufacture OCF in-house, Chinese manufacturers mainly procure from outside sources.
In China, demand is increasing for CMOS related to automobiles, smartphones, surveillance cameras and other fields. Toppan will strengthen sales to local CMOS sensor manufacturers by producing near areas of demand.
Toppan's move comes as Beijing is spending more than $1.75 billion a year on subsidies to boost domestic semiconductor production, according to the South China Morning Post.
The U.S. has placed restrictions on the export of chipmaking equipment to China out of concerns the technology could be diverted for military purposes, making it difficult for the country to produce advanced chips.
Among chips in practical use, the most advanced level is currently said to be 3 nanometers. In general, the smaller the nanometer level for a logic chip, the more powerful it is.
Amid U.S. restrictions, China is focusing on CMOS, which differ from logic chips in manufacturing method and the definition of advanced products. Most CMOS can be manufactured using mature technology of 28 nm or greater, with the production equipment falling outside of the U.S. restrictions.
China's share based on production capacity of all 28-nm or greater so-called legacy chips is expected to reach 33% of the world's total in 2027, up 4 percentage points from 2023, according to Taiwan research firm TrendForce.
Beijing announced its "Made in China 2025" high-tech industry development plan in 2015, choosing semiconductors as a priority area. Two large government funds have been set up so far to help boost the domestic chip industry.
Plans for a third phase have recently emerged. Bloomberg reported this month that China was raising more than $27 billion from local governments and state-owned enterprises for a chip fund, the biggest of its kind.
Investment in mature technology other than CMOS is also increasing in China, and Japanese and U.S. manufacturing equipment makers are increasing sales in this field as well.
The value of chipmaking equipment shipments to China reached a record high of over $30 billion in 2023, up 6% from 2022 and putting the country first ahead of Taiwan and South Korea in imports, according to industry group SEMI.
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