Japanese Semiconductor Parts Producers Acquiring U.S. Firms

U.S.-based GlobalFoundries Inc., the world's third largest semiconductor foundry, is selling off its photomask business to Japan’s Toppan Photomasks Inc. A photomask is one of the essential raw materials for semiconductor manufacturing. It is one of the items subject to export control by the Japanese government.

GlobalFoundries has decided to sell off its Fab 9’s photomask production facility in Burlington, Vermont, and IP to Toppan Photomasks, a subsidiary of Tokyo-listed Toppan Printing Co., according to semiconductor industry sources on Aug. 19. A photomask is used to transfer the circuit patterns formed on a blank mask to a wafer.

GlobalFoundries said it has decided to sell off its photomask unit to strengthen the competitiveness of its foundry operations. The company, which gave up the development of 7-nm process technology last year, has sold its Fab 3E and Fab 7 in Singapore to improve its structure. The company plans to use the plant space created by transferring the photomask production equipment for production of 200-mm RF chips.
 

Japanese semiconductor material producers are enhancing their competitiveness through cooperation with U.S. firms. GlobalFoundries and Toppan Photomasks have been expanding cooperation since last year after setting up a joint venture Advanced Mask Technology Center (AMTC) in Dresden, Germany. The tools and technologies from the Fab 9 will be transferred to Toppan Photomask’s production facility in Texas, U.S., and AMTC. This is part of the company’s strategy to raise its production capacity in the United States and Europe and increase its market share.

Toppan Photomasks’ acquisition of GlobalFoundries’ photomask operations has implications for the Korean semiconductor industry. Experts point out that Korean companies also need to pursue bold M&As in order to break away from Japan in the components and materials sector. In short, they need to enhance their competitive edge and broaden their markets through M&As. Chinese companies are also making the best use of M&As to secure their industrial competitiveness.

Yet an official from a South Korean semiconductor firm said, “The acquisition of companies in the United States does not have much merit for domestic companies which do not have much business in the United States and Europe.”

Sogang University professor Lee Duk-hwan also pointed out the limits of localization of semiconductor materials and equipment. He said, “It is not worth the effort to develop materials that are used only by South Korean firms. Localization efforts should focus on materials that outperform the Japanese products and can secure demand from advanced countries. Developing materials aiming only for the domestic market is a waste of money.”