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Nikon's Legacy Chipmaking Machines in High Demand in China
Nikon Corp. is witnessing a notable surge in demand from China for its older chipmaking machines as the country ramps up its efforts to build a robust semiconductor supply chain. President Muneaki Tokunari revealed that inquiries for Nikon's lithography tools have risen sharply. The company plans to refresh the NSR-2205iL1, a lithography machine designed for mature manufacturing processes, and anticipates selling over 10 units annually starting this summer.
China's Semiconductor Growth Driven by Domestic Efforts
China's push towards creating simpler semiconductors, such as those used in automotive power regulation and household appliances, is influenced by limitations imposed by the US and its allies on the sale of advanced chipmaking equipment. Tokunari highlighted the rapid progress in China’s chip industry, suggesting significant advancements could occur within the next five to ten years.
Diversification Amidst Geopolitical Challenges
Nikon, which once relied heavily on Intel Corp., has diversified its client base, now catering to companies in China, Taiwan, and Japan. Despite the evolving market, challenges remain. The Biden administration may tighten export controls, particularly focusing on restricting advanced chip technology.
Strategic Moves and Financial Goals
Nikon is aggressively marketing its new argon-fluoride lithography machines in China, developed in compliance with current export restrictions. The Netherlands' restrictions on ASML Holding NV’s extreme ultraviolet lithography machines further highlight the geopolitical constraints in the industry. Nikon aims to increase its operating profit by 66% to ¥25 billion ($160 million) by March 2026 within its precision equipment segment.
Expanding Market Presence
Nikon is exploring new markets, including the defense and aerospace sectors in the US, with its metal 3D printers. The company has expanded into military-use products, reflecting Japan's increased defense spending. Last year, Nikon acquired the German 3D-printing company, SLM Solutions Group, and has since established a presence in California. Recently, Nikon Advanced Manufacturing Inc. appointed Mike Mullen, ex-chairman of the US Joint Chiefs of Staff, as a strategic adviser.
Innovations and Investor Influence
Nikon has also embarked on a collaborative project with NASA to develop a handheld camera for lunar missions. Additionally, activist investor Silchester International Investors acquired a 5% stake in Nikon, potentially influencing the company's capital policies, which led to a significant rise in Nikon’s shares.
Tokunari emphasized the need for patience among investors while urging his team to expedite product development. He remains optimistic about the company's growth trajectory amidst a dynamic and challenging global semiconductor industry.
