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NGK strengthens U.S. semiconductor manufacturing with Arizona expansion

Rey Alcaraz

NGK strengthens U.S. semiconductor manufacturing with Arizona expansion

Founded in 1919, Japan’s NGK Insulators is renowned for its expertise in industrial ceramics. While historically known for power insulators, NGK has diversified into semiconductor components, EV materials, and environmental solutions, serving industries worldwide.

As part of its strategic growth plan, NGK is ramping up semiconductor manufacturing operations in the U.S. Its subsidiary, FM Industries, recently completed a new production facility in Chandler, Arizona. Designed for wafer fabrication equipment, the facility is expected to begin operations by mid-2025, with investments estimated between $20 million and $30 million. This expansion comes as global semiconductor demand continues to surge, with the market valued at $580 billion in 2022 and expected to grow at a compound annual rate of 7.1% through 2030, according to Fortune Business Insights.

NGK Insulators President Shigeru Kobayashi anticipates carbon-reduction technologies will significantly boost earnings by the 2030s (Photo source: Nikkei Asia)

NGK President Shigeru Kobayashi explained that this expansion aligns with the company’s strategy to bring production closer to key markets while reducing reliance on China. The Arizona facility is positioned to support increasing demand from U.S.-based chipmaking equipment manufacturers, particularly as data center investments are projected to grow by 10% annually over the next five years, according to Dell’Oro Group.

This move comes as NGK navigates declining demand for its traditional products, such as ceramic materials for automotive exhaust systems. These materials currently account for 90% of the company’s operating profit but are expected to face reduced demand as EVs capture an estimated 60% market share by 2030, according to BloombergNEF.

In addition to its U.S. operations, NGK is scaling up production in Malaysia to meet the growing demand for heat-dissipating substrates, vital for power semiconductors in EVs. Leveraging AI, NGK has cut research and development timelines for inorganic compounds by 90%, reducing development cycles from years to months.

In 2023, NGK invested 21 billion yen ($135 million) into its semiconductor-focused segment, with similar annual investments planned through 2026. The global push for clean energy and advanced technologies presents a significant opportunity, with the semiconductor industry expected to exceed $1 trillion by 2030, driven by the rise of electric vehicles, renewable energy, and data-centric applications.

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Rey Alcaraz

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