The world’s most advanced and delicately fine-tuned semiconductors would not be possible without the aid of giant steel storage tanks built by a little-known Tokyo company founded in 1927.
Valqua Ltd makes specialized, super clean containers for storing essential chipmaking chemicals and it expects to hit its highest sales ever this fiscal year.
It is by far the world’s largest supplier of such tanks, dwarfing a clutch of smaller competitors in places such as Taiwan, and providing almost every tank used by the world’s biggest contract chipmaker, Taiwan Semiconductor Manufacturing Co (台積電), Ichiyoshi Research Institute analyst Mitsuhiro Osawa said.
Photo: Yimou Lee, Reuters
Valqua is part of a loose network of Japanese manufacturers that dominate a niche, but indispensable segment of the global chip supply chain. Disco Corp, for instance, is the industry’s go-to supplier of silicon wafer cutters, while JSR Corp provides the high-purity chemicals that Valqua stores at chip plants.
“A molecular-level impurity would make the whole chemical solution in a tank useless, as it would drastically degrade the production yields of cutting-edge chipmaking,” Valqua president Yoshihiro Hombo said in an interview. “We and chemical makers support the complete supply chain by making, transporting and storing these solutions under ultra-clean conditions, and that is not something that can be easily replicated.”
Valqua gets more than half its sales from semiconductor makers and its close-knit relationship with the chip sector helps it stand out among industry peers.
Chipmaking customers are not showing signs of slowing spending even as demand has fallen dramatically from its COVID-19 pandemic highs, Hombo said.
“Sentiment actually remains intact, as top players of the industry tend to accelerate their investment to distance themselves from rivals,” the 66-year-old said.
The various chemicals and acids used in semiconductor fabrication processes have to be free of contaminants. The required purity for the ones used in cleaning wafers is equivalent to taking a trip around the Earth without finding a dust speck wider than a 10th of a human hair.
Those extreme specifications make it a tough business for a small company to enter and an unattractive one for bigger players, Hombo said.
There’s no standardized tank shape or size, so each chip plant’s containers — which usually number in the hundreds per facility — have to be made to order.
These tanks can be as large as 4 meters in diameter and 9 meters in height, and Valqua lines their interiors with fluororesin sheets.
Applying the inflexible, non-adhesive sheets to curved surfaces perfectly requires the hands of skilled workers. Pipes connecting tanks to machinery must also be lined, and the whole tank production process is carried out in a clean environment.
Customers return to Valqua because of that bespoke manufacturing and the difficulty of replacing a tank, which might last for a decade or more.
Valqua might spend to accelerate its growth push as it moves toward its 100th birthday.
“Our balance sheet is healthy right now, and we may eye some acquisitions and expansions,” Hombo said.
One step on that path is a new factory for storage tanks in Japan’s Aichi, which Valqua announced last month. It is the company’s first new plant in Japan since 2008, underscoring the growing value placed on shoring up potential weak points in the chip supply chain.
The move was driven in part by requests from customers wary of geopolitical risks surrounding Taiwan.
“The cost of making tanks is higher in Japan, but some top chipmakers still favor Japan as the best place to source supplies from,” Hombo said.
The nation is rich on good providers of materials and machinery, and is seen as a safe haven for a sector that “has become a big cluster of various geopolitical risks.”
Valqua’s new factory, expected to start operations in January 2025, is to be funded in part by the Japanese government.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts