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Japan's Screen Holdings Eyes India Expansion Amid Global Chip Sector Rebalancing
Japan's Screen Holdings is establishing an Indian subsidiary, positioning itself for the nation's burgeoning semiconductor industry. This move comes as global chipmakers diversify supply chains and seek new growth markets, spurred by geopolitical…
Screen Holdings Establishes India Footprint
Screen Holdings, a major Japanese manufacturer of semiconductor production equipment, announced plans to establish a subsidiary in India during the current fiscal year, which concludes in March 2027. The new entity will facilitate direct sales and maintenance services for its chip-making machinery. This strategic expansion targets India's emerging semiconductor sector, where Screen aims to capture demand for equipment essential in wafer cleaning and inspection.
The company projects an initial capital investment of approximately USD 3.1 million for the Indian operation. This commitment follows a shift in its business model; previously, Screen relied on local agents to serve the Indian market. Direct engagement is expected to enhance operational efficiency and market penetration as India seeks to expand its domestic chip manufacturing capabilities.
India's Semiconductor Push Attracts Foreign Investment
Screen Holdings' move into India aligns with broader global trends in the semiconductor industry, characterized by a push for supply chain diversification and reduced reliance on a limited number of manufacturing hubs. Geopolitical factors and national policies supporting chip production have spurred significant investment in new regions. India has actively courted foreign direct investment in this high-tech sector, offering various incentives to attract key players.
Micron Technology, an American semiconductor giant, notably broke ground on a USD 2.75 billion chip assembly and test facility in Gujarat in September 2023. Additionally, a consortium led by India's CG Power and Industrial Solutions, alongside Renesas Electronics and Star Microelectronics, recently secured government approval for a USD 791.7 million outsourced semiconductor assembly and test (OSAT) facility. This increased activity signals India's growing prominence as a potential manufacturing base, attracting equipment suppliers like Screen Holdings.
Market Dynamics and Future Outlook
The global semiconductor equipment market experienced an 11% contraction in 2023, with sales totaling USD 106 billion, according to industry data. However, forecasts from SEMI, a global industry association, suggest a rebound with a 4% increase in sales expected in 2024, followed by an additional 18% growth in 2025. This projected recovery is driven by anticipated demand from new fabrication plants coming online and technological advancements requiring more sophisticated equipment.
Screen Holdings reported sales of USD 3.65 billion in the fiscal year ending March 2023. Its expansion into India positions the company to capitalize on the nascent, yet rapidly expanding, semiconductor ecosystem in the region. The direct sales and service model in India reflects a strategic adaptation to a competitive global market, seeking growth beyond established markets as geopolitical and economic forces reshape the semiconductor supply chain.
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