Recently TEL(Tokyo Electron), a Japanese semiconductor-equipment maker, said it would spend around Y22 billion ($167m) to build a new plant in Tohoku in anticipation of new demand.

Tokyo Electron Technology Solutions, a subsidiary of TEL, has reached an agreement with the city of Ozhou in the northeastern Iwate prefecture on the location of the new plant. After the new plant is completed, it will be the seventh factory in Ozhou City, TEL. The other six factories are in full capacity.

According to Nikkei Asia, the new TEL plant is scheduled to be completed in autumn 2025 and will specialize in making wafer deposition equipment. Once operational, it is expected to increase the group's capacity to make chip equipment by 50 per cent. If complemented by improvements in production efficiency, capacity could be up to twice as high as originally planned.

While the global semiconductor market is currently facing an inventory correction, the emergence of a new generation of semiconductors is increasing the process of wafer deposition technology. In the long term, TEL believes that semiconductor industry growth will continue and expects higher demand in FY2024. The new plant will create 900 direct jobs and about 450 indirect jobs for its partners.