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Samsung Electronics considers chip test line in Japan to boost advanced packaging business

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BNN Correspondents
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Samsung Electronics is contemplating setting up a chip test line in Japan to strengthen its advanced packaging business and establish closer ties with Japanese semiconductor equipment and materials manufacturers.

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It would be the first such test line for Samsung in Japan, and the investment would likely be in the tens of billions of yen. Although details have not been finalised, Samsung is considering establishing the facility in Kanagawa prefecture, near Tokyo, where it already has a research and development centre.

(Read Also: US Chip Funding Rules Will Not Force Shutdown of South Korean Firms’ China Factories)

Samsung seeks to deepen ties with Japanese chip equipment and materials makers

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Japan has aligned its technology trade controls with the US by restricting exports of 23 types of chip-making tools, aiming to counter China's growing power in chips and advanced technology. By expanding into Japan, Samsung seeks to cooperate with Japanese companies to access a local "ecosystem," attract relatively low labour costs, and the presence of leading chip equipment and materials makers.

Samsung's plan to develop advanced packaging techniques, including placing chips with different functions into a single package, could improve chip performance as manufacturers push the physical limits of how small chip features can get. The test line would involve the back-end process of chipmaking, in which semiconductors are cut and assembled into products.

The US has urged allies to collaborate on chips and advanced technology, focusing on chips to counter China.

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Samsung seeks to tap into Japan's chip equipment and materials market through closer cooperation with local companies.

Taiwan Semiconductor Manufacturing Co (TSMC), the world's largest contract chipmaker, opened a research centre in Japan's Tsukuba city in 2022 at a cost of about 37 billion yen, with 19 billion yen of that coming from the Japanese government.

Samsung last year established an advanced packaging team in South Korea and expects to invest $230 billion over the next 20 years to develop a large chip-making base in the country. However, according to a source, Samsung's deliberations on the Japanese facility were still in an early stage, and nothing had been finalised.

South Korean President Yoon Suk Yeol's recent visit to Japan, where he met business leaders from both countries, indicates the two US allies are pledging to work more closely on chips and technology, aligning their efforts to counter China's growing power in chips and advanced technology.

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