Canon to build 50b yen plant for key chip equipment

CANON will spend more than 50 billion yen (S$490 million) to build a plant in the central Japanese prefecture of Tochigi to expand production of its existing lithography machines for chipmaking.

Construction will begin in Utsunomiya in 2023 and the plant will start operation in 2025, Canon spokesperson Hiroki Kobayashi told Bloomberg News by phone on Wednesday (Oct 5). The company may also use the facility to produce next-generation chipmaking equipment - around a technique it calls Nanoimprint - however it hasn’t made a final decision yet as that technology is still under development, Kobayashi said.

Lithography machines are critical equipment in the chipmaking process. Washington has ensured that China cannot procure the most advanced lithography technology from industry leader ASML Holding and is ratcheting up efforts to further restrict China’s access to more mature lithography equipment as well.

Tokyo-based Canon trails compatriot Nikon and the Netherlands’ ASML in the supply of chipmaking gear, and its products are used to fabricate less advanced semiconductors on mature production nodes. According to China’s Founder Securities, Canon’s lithography machines can make chips only as advanced as 130 nanometres, a technology that first became available more than 20 years ago.

Canon’s move to build an entire new plant signals an expectation of enduring demand for older chip technology. BLOOMBERG