China's chip industry has the opportunity to undertake Japan's capacity transfer

The mega-earthquake in Japan has sounded a warning bell for the safety production of many Japanese companies. It is widely believed that Japan will consider relocating its factories in the next step, and relocate technologies that were originally unwilling to be eliminated or temporarily not eliminated.

“In recent years, Japan’s low-end electronic components industry has gradually transferred outward, but core electronic components with high-yield, high-barrier, and high-monopoly are still mainly concentrated in Japan. Due to the sustained impact of earthquakes and future developments. With regard to the uncertainty, Japanese companies will accelerate the overseas transfer of production capacity and are expected to shift to areas where the United States, China and Southeast Asia gather, and avoid direct competitors such as Taiwan and South Korea.” April 12, GF Securities analyst Hui Lunlun wrote in the latest report on the occasion of the "full moon" of the major earthquake.

According to Gu Wenjun, senior analyst at iSuppli China, at the level of foundry manufacturing, China may have the opportunity to undertake the transfer of production capacity in Japan. China has talent and low cost advantages, and the industrial environment is relatively mature.

Wang Xiwen, the China Council for the Promotion of International Trade (CCPIT) Electronic Information Branch, has long paid attention to Japan’s electronic information industry, but he expressed disappointment: “We originally expected that Japan’s overseas transfer of production capacity would move more factories to China, but recently the information we monitored shows that Japan’s overseas The transfer has given priority to Southeast Asian countries such as Singapore and Thailand."

Philippine officials had previously stated that after the earthquake, 2-3 Japanese electronics companies had announced that they planned to temporarily relocate to the Philippines in order to resume the production and supply of chips as soon as possible. Of the 2272 companies that have settled in the Philippine Economic Zone, 618 are Japanese companies that are mainly engaged in semiconductor and auto parts production and shipbuilding.

Wang Xiwen said that Japanese companies are very good at operating. Selecting a factory will take into consideration many factors. It does not rule out that the above-mentioned Southeast Asian countries have done a lot to undertake the transfer of Japan's industries. It is more cost-effective for Japanese companies to evaluate and set up factories than in China. “We also report relevant monitored information to the Ministry of Industry and Information in a timely manner and hope that China will also have the opportunity to undertake the transfer of part of Japan’s overseas production capacity.”

Hui Lun said that taking Japan's Kurera as an example, it controls the global market share of polyvinylidene fluoride polyvinylidene fluoride (PVDF) nearly 70%. This chemical is extremely important for the manufacture of lithium-ion batteries, and Kureha's only A factory that manufactures PVDF was located in Fukushima City, the hardest-hit area in the earthquake. The Onahama port was seriously damaged during the earthquake. As a result, key materials such as vinyl chloride and salt could not be delivered to the factory. At the same time, electricity supply was limited and capacity recovery was affected. The earthquake also accelerated the company’s capacity transfer plan and moved production capacity to China and the United States as much as possible to avoid a sharp drop in production capacity due to natural disasters.