Tokyo Electron Ltd., Japan’s leading chip equipment manufacturer, is planning to build a team of engineers in India to align with the Indian government’s push to expand semiconductor manufacturing in the country.
This move is expected to take shape around 2026, initially focusing on providing technical services to Tata Electronics Pvt. The company’s CEO, Toshiki Kawai, has indicated that robotics will increasingly play a role in this initiative, with local engineers receiving in-person and remote support from Japan. However, details regarding the number of engineers to be hired were not disclosed.
India, under the leadership of Prime Minister Narendra Modi, is making significant efforts to attract international electronics companies and chipmakers to establish manufacturing facilities within its borders. This initiative is part of a broader plan to narrow the technological gap with advanced economies. Companies like Apple Inc. are already ramping up production in India, while domestic giants like Tata Group are investing heavily in semiconductor fabrication plants.
The Indian government offers substantial incentives to support these ventures, creating fertile ground for companies like Tokyo Electron, specializing in the machinery and expertise needed for semiconductor production.
Based in Tokyo, Tokyo Electron aims to hire 10,000 new employees globally over the next five years, reflecting the growing demand for domestic chip manufacturing in various countries.
The company is a crucial supplier to industry giants such as Taiwan Semiconductor Manufacturing Co. (TSMC), Samsung Electronics Co., SK Hynix Inc., and Intel Corp. For the current business year ending in March, Tokyo Electron is projecting record revenue and operating profit, driven by a surge in chip demand, particularly in areas like artificial intelligence (AI), autonomous vehicles, and energy efficiency.
Despite pressures from the United States to tighten restrictions on exporting advanced chipmaking equipment to China, Tokyo Electron remains optimistic about the global demand for its machines. The US government has urged Japan to limit Tokyo Electron’s ability to service specific equipment in China. Still, Kawai believes that the global importance of semiconductors will ensure continued investment in chipmaking technologies worldwide.
Tokyo Electron has already committed to supporting Tata Electronics by training its workforce on chipmaking equipment and assisting in research and development.
This collaboration is part of a broader wave of semiconductor investments in India. The Modi administration has approved over $15 billion in assets, including a $2.75 billion assembly facility by US memory maker Micron Technology Inc. Israel’s Tower Semiconductor Ltd. is also exploring a partnership with billionaire Gautam Adani to build a $10 billion fabrication plant in western India.
While China remains a significant market for Tokyo Electron, accounting for nearly 50 percent of its revenue in the June quarter, sales to China are expected to decrease to between 25 percent and 30 percent as the company’s overall sales continue to grow. However, Kawai emphasized that India is not seen as a replacement for the Chinese market but as an additional growth opportunity.
As Tokyo Electron continues to expand its market share against competitors like Applied Materials Inc., the company is focusing on advancing its technologies, including cryogenic etching for high-speed processing of stacked NAND memory and conductor etching for DRAM. Despite some fluctuations in investor sentiment, particularly towards AI, Kawai remains confident about the broader potential for growth in the semiconductor industry, noting that AI is just one aspect of the sector’s future expansion.
Tokyo Electron’s stock has declined since reaching a record high in April. Still, the company remains focused on the semiconductor market’s long-term potential, which Kawai believes is much larger than the current focus on AI suggests.
