The Japanese group is expanding its capacity to produce high-purity polysilicon in Southeast Asia, which is used to manufacture the wafers on which chips are produced. The growing demand linked to artificial intelligence and the need to diversify the supply chain are driving these new investments.
The expansion of the semiconductor industry is not limited to large chip factories. Long before a processor reaches the production line of TSMC, Samsung, or Intel, it is necessary to have materials that meet extraordinary purity requirements. It is precisely in one of these early links in the chain where the Japanese company Tokuyama is strengthening its capacity.
The company has inaugurated a plant in Ho Chi Minh City, Vietnam, to process high-purity polysilicon for the semiconductor industry. The investment amounts to about $60 million, and the facility will have a capacity to produce 4,000 tons annually when commercial production begins, expected in 2027.
This operation is part of a larger project. Tokuyama is also developing a plant in Malaysia dedicated to the synthesis and deposition of polysilicon through a joint venture with the South Korean company OCI. The planned investment is around $300 million.
When both facilities become operational, the company expects to increase its total capacity by approximately 50%, from the current 8,500 tons to about 12,500 tons annually.
A material that demands extreme purity
Polysilicon is one of the raw materials used to produce silicon wafers, which are then transformed into semiconductors. Its manufacture for advanced applications requires purity levels far superior to those used in other sectors, including the photovoltaic industry.
Tokuyama has specialized precisely in this segment. According to information released by the Vietnam News Agency, the company ranks third in the world for polysilicon for semiconductors, with about 20% of the market, and has processes capable of reducing impurities to levels of one part per billion.
This position becomes increasingly important as the demand for high-performance chips rises. The expansion of artificial intelligence is driving the construction of data centers and the consumption of advanced processors and memory, including HBM used in high-performance computing systems. The growth ultimately cascades backward throughout the industrial chain, from chip factories to materials producers.
Tokuyama estimates that by around 2027, demand from its customers could exceed the available capacity at its Japanese plant. The company also predicts that additional production from Vietnam and Malaysia can be absorbed by the market within three to four years.
From producing only in Japan to diversifying in Asia
The expansion is also explained by the need for supply security. Until now, Tokuyama had concentrated the production of this material in Japan, a strategy that revealed its risks during the pandemic and subsequent disruptions in international logistics chains.
Customers have started to demand alternatives that reduce dependence on a single facility. Tokuyama’s response has been to maintain its Japanese production base while simultaneously developing additional capacity in other Asian countries.
Vietnam will carry out part of the process using material from Japan, while the plant in Malaysia will expand production capacity through the alliance with OCI. With this structure, Tokuyama aims to have multiple supply points without abandoning the technological expertise accumulated in its Japanese facilities.
The Japanese government is involved in this strategy. The Ministry of Economy, Trade, and Industry has granted Tokuyama aid of 4 billion yen, approximately $25 million, to support the Vietnamese project. This decision aligns with Japan’s policy of strengthening supply chains for products deemed strategic.
Vietnam gains ground in the chip supply chain
For Vietnam, the arrival of Tokuyama represents a step towards higher value-added activities within an industry where the country seeks to expand its presence. The plant has been established in Ho Chi Minh City and will incorporate a particularly specialized phase of semiconductor material production into the Vietnamese industrial fabric.
The project also reflects a trend that is occurring in various parts of Southeast Asia. International companies are reassessing supply chains that have been heavily geographically concentrated for years and are seeking to combine competitive costs, available labor, stable production, and proximity to key Asian electronics manufacturing hubs.
